Word Is…

...There were more than a few surprised faces at J. Walter Thompson and Padulo Integrated last week after the National Post reported that the two Toronto agencies were on the shortlist for the Bay's $15-million creative account. A source at JWT...

…There were more than a few surprised faces at J. Walter Thompson and Padulo Integrated last week after the National Post reported that the two Toronto agencies were on the shortlist for the Bay’s $15-million creative account. A source at JWT says people have been calling ever since to congratulate the agency for making it to the shortlist, even though, as far they know, that isn’t the case. According to the Bay’s marketing department, the shortlist has only four names on it: Wolf Group, BBDO, MacLaren McCann, and Communiqué.

…A recent profile of photogenic copywriter-turned-commercial-director Jana Peck in the National Post caused some grief for Ian Saville, executive VP of Peck’s former employer, Cossette Communication-Marketing. In the article, Peck described a meeting with Cossette client Irving Tissue, during which she claims an exec on the client side informed her that "Your target market is actually one 70-year-old eccentric billionaire in New Brunswick" – namely, CEO James K. Irving. Not surprisingly, Irving was less than amused, and proceeded to tear a strip off the red-faced Saville via long-distance telephone call.

…Corporate unrest at Dylex isn’t making it easy for the garment empire to find a new marketing veep to replace Tip Top’s Steve Ince, whose voice-mail greeting was recently changed to say: "Hi, this is Steve Ince. I’m no longer employed by Dylex…" According to a colleague, Ince moved on voluntarily last month to work for an unspecified "industrial manufacturer".

Kraft Heinz beats the street, but reports slight sales slide

The company's Q2 net sales, while down slightly, reveal continued demand for snacks and pre-packaged meals.
Kraft Heinz

Kraft Heinz is reporting earnings of 78 cents a share, beating Wall Street’s estimate of 72 cents a share, thanks to continued demand for snacks and pre-packaged meals. However, the company also reported a net sales decline of 0.5% compared with the same period last year, to $6.6 billion, according to its latest Q2 earnings report, released Tuesday.

The company experienced a favourable 2.3 percentage point impact from currency and a negative 0.7 percentage point impact from its February divestiture of Hormel Foods – including the Planters peanut brand – which closed in the second quarter of 2021.

Its cheese divestiture – which included the sale of its natural cheese division to Lactalis – is expected to close in the second half of 2021, says Kraft Heinz Global CEO Miguel Patricio in this morning’s conference call.

Adjusted EBITDA slumped 5.2% versus the year-ago period to $1.7 billion and increased 6.6% versus the comparable 2019 period. Higher transportation and inflation-related goods costs continue to affect the company’s bottom line.

Kraft Heinz’ organic net sales declined 3.6% in Canada over the last three months compared with a comparable period last year, this as total net sales rose 8.8% year over year. 

However, its overall organic net sales slipped 2.1% compared with 2020 figures. This includes the negative impact stemming from exiting its McCafé licensing agreement. However, this decline was partly offset, Kraft Heinz reports, by “partial recovery in foodservice channels and retail consumption trends.”

“Food service is recovering, and recovering fast,” Patricio stressed in today’s earnings call. He said “the bet to support QSR” early in the pandemic, with individual packets of ketchups and sauces, is paying off.

Channel trends are still normalizing, he warns, and it’s too early to see how at home or away from home, will net out. “We have big ambitions for away from home business,” he said. Consumers continue to evolve how they eat, with Patricio saying that Kraft Heinz is collaborating with a popular DTC brand for its Philadelphia cream cheese.

Accrued marketing costs, the company reports, rose to $968 million from $946 million in December 2020.

“We are investing more in our brands, and better as well, building a much more creative company,” Patricio reported.

Kraft Heinz is also strengthening and diversifying its media presence, he said, driving repeat rates for those discovering and rediscovering the brand. Patricio added that the company is continuing to drive its transformation program forward, modernizing its brands and better connecting with its consumers.