How Kraft Heinz is keeping its legacy brands affordable for cost-conscious shoppers
Years of high inflation have strained household budgets across America, putting a spotlight on the rising costs of necessities like gas and groceries.They have also contributed to a shift in how consumers perceive value at the supermarket.
New research from McKinsey finds that Americans are increasingly turning away from name brand foods to lower priced, private-label or store-brand products.For Kraft Heinz CEO Steve Cahillane, these changes in the marketplace demand a shift in strategy.
“We can’t just rely on having a strong brand and saying that’s going to be enough,” Cahillane said in an interview on a tomato farm in Woodland California, part of NBC’s Business in America initiative.Tomatoes destined for Heinz ketchup bottles are harvested in Woodland, California.NBC News“Consumers have only so many dollars available for their food budget in a month’s time, and so you have to earn the right to be in that basket each and every day.”In recent years, store brands have shed their traditional associations with lower quality ingredients and temporarily “trading down.” Today, 85% of consumers believe private-label grocery products are just as good or better than those from name brands, McKinsey reports.Kraft Heinz sells over 200 brands, many of them household names like Heinz ketchup, Kraft Mac & Cheese, Oscar Mayer meats, Capri Sun drinks, Miracle Whip spread, Velveeta, Philadelphia cream cheese and Kool-Aid.
But this is a challenging time to be in the name-brand food business.Last year, Kraft Heinz’s net sales in North America were down about 5% from 2024.
When Cahillane took the helm as CEO in January, he was tasked with turning the business around.One part of that strategy, he said, is deploying promotional discounts more strategically.“We’re working with our retail partners to make sure that at the beginning of the month, when consumers are really doing their big shops, that we’re out there with good offers across the board,” ...