Kraft Heinz names new CEO, as Bernardo Hees steps down

By Kristine Sherred contact

- Last updated on GMT

Incoming CEO Miguel Patricio said some of Kraft Heinz's brands 'are a bit dusty' and could use rejuvenation. Pic: Getty Images/Tomas Mina
Incoming CEO Miguel Patricio said some of Kraft Heinz's brands 'are a bit dusty' and could use rejuvenation. Pic: Getty Images/Tomas Mina

Related tags: Kraft heinz, Kraft foods, Heinz, M&A, Ceo, Leadership, Ab inbev, Planters, Innovation

Miguel Patricio’s appointment comes two months after the company took a $15bn write-down on two of its biggest brands, Kraft and Oscar Meyer.

Patricio, who is Portugese, most recently spearheaded growth of major beer brands including Corona, Budweiser and Stella Artois as AB InBev’s global CMO, a position he held since 2012. He previously led the Asia Pacific team, boosting revenue from $1bn in 2008 to just under $3bn in 2012 – making AB InBev the number-one beer company in China.

“Miguel is a proven business leader with a distinguished track record of building iconic consumer brands around the globe, driving top-line revenue growth through a focus on consumer-first marketing, innovation, and people development,” ​said Alex Behring, board chairman.

Richard Parker, principal analyst at GlobalData, said Patricio’s appointment is ‘interesting’ given his marketing background. The move to refocus on brands and messaging “hints at where the company would like to go,”​ he told BakeryandSnacks.

“Key will be whether it can overcome any institutional and leadership-derived inertia built up in recent years and refocus effectively on making more of the great brands it has and making them relevant to consumers again,”​ he said.

Patricio will officially join Kraft Heinz on July 1, following the departure of Bernardo Hees who will stay on through then to allow for a smooth transition, the company said.

Marketing in modern times

Kraft Heinz has recently tried several tactics to woo modern consumers back to its iconic brands, now sometimes considered highly processed in a world increasingly demanding natural.

In February, for example, Oscar Meyer’s Portable Protein Pack​– launched in 2014 – became the ‘official protein snack’ of UFC, the mixed martial arts organization.

Earlier this month, Kraft Heinz announced that its venture fund Evolv, which supports tech companies focused on the food industry, would back local food delivery service GrubMarket.

Then, despite the initial April Fool’s tease a few weeks ago, Lunchables will indeed launch a brunch version​ for make-your-own breakfast sandwiches.

According to IRI’s Sally Lyons Wyatt, though consumer tastes continue to shift, old-school favorites – especially snacks with traditional flavors such as cheese – are creeping back. In a presentation of her State of the Snacking Industry report, Lyons Wyatt noted that Kraft capitalized on this trend with the re-release of Planter’s Cheez Balls, along with a limited release of its Cheez Curls.

Tumultuous times

Hees joined the H.J. Heinz Company in 2013 after previously serving as CEO of Burger King and America Latina Logistica, Latin America’s largest railroad and logistics company.

He oversaw the acquisition of Heinz in 2013 by 3G Capital, where he will reportedly return as a consultant, and the subsequent Kraft Heinz merger two years later.

The company did not offer further reason for Hees’ departure, but under his watch, Kraft Heinz slashed $1.7bn in administrative expenses – along with thousands of employees – yielding high profit margins that came under scrutiny of the US Securities and Exchange Commission (SEC) last year. Kraft Heinz announced the SEC investigation in February, in conjunction with a $15bn write-down of the Kraft and Oscar Meyer brands.

Parker at GlobalData noted the criticism Kraft Heinz has faced for the culture built by 3G Capital and ‘to a lesser extent’ Berkshire Hathaway, Warren Buffet’s investment firm.

“An arguably misplaced strategy has focused on big ticket acquisitions rather than investment in and organic growth of its existing brand portfolio and in-house innovation​.”

Iconic brands have not received the love they deserved, he added.

Patricio said some of the company’s brands ‘are a little bit dusty.’

Today, the company employs 2,000 people in Chicago and 39,000 globally, garnering $6.9bn in net sales last year.

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