Kraft Heinz CEO Steve Cahillane said the company believes its greatest growth opportunity lies in modernizing its legacy brands and making them better suited to changing consumer tastes.
“What I found when I went into Kraft Heinz was…an outstanding brand that was under-invested in,” Kailane said Wednesday on CNBC’s “Mad Money.” “With investment, focus, attention, good customer plans, good consumer plans, companies can grow again.”
The packaged food giant, known for brands such as Heinz, Kraft, Philadelphia Cream Cheese, Lunchables and Oscar Mayer, reported better-than-expected first-quarter earnings and earnings on Wednesday. Shares rose more than 2% as investors found some reason to believe in Kailane’s turnaround efforts. Kraft Heinz’s stock price has been in decline for years, and in September the company announced plans to unwind its 2015 mega-merger in an effort to reverse its fortunes. However, in February, Kaylane said she believed the issue could be resolved without a separation and that she had paused efforts to separate.
Cahillane, who joined Kraft Heinz in January after previously leading Kellogg Co., said this is just the beginning and that the company is now focused on investing in categories where it believes it has a “right to win.”
“One of the clearest examples of this is the Heinz brand,” he says. “Heinz is one of the most well-known consumer brands in the world.”
Despite the brand’s wide recognition, household penetration remains far below its potential, and there is room for further growth, Kailane said.
Health and wellness is another key focus area, according to Cahillane. He pointed to Kraft’s improved macaroni and cheese lineup, including the recently launched Power Mac, which has 17 grams of protein and 6 grams of fiber.
“Health and wellness is a real trend. It’s an important trend. Clean label is a real trend,” he said. “We are looking at where we can refresh our portfolio, where we can replace it, and where we can innovate.”
Cahillane also highlighted Capri Sun as an example of how the company is adapting old brands to new consumers. Kraft Heinz recently introduced a version with electrolytes, aimed at retaining customers as children grow older and leave the brand.
“By coming up with something that’s somewhere between a kids’ drink and a sports drink, we can innovate to really engage consumers,” he said.
Ultimately, Kraft Heinz’s strategy is focused on reinvesting in its biggest brands and making them “more relevant to what consumers want,” Cahillane said.
