Kraft Heinz touts the strength of its brands, despite a dip in Q4 marketing spend

Kraft is reporting strong profits as the company’s CEO called out its marketing successes in prepared remarks.

The maker of Classico, Philadelphia Cream Cheese, Kraft Dinner and Maxwell House is reporting Q4 net income of $890 million USD for the three month period ending Dec. 31, compared to a loss of $257 million USD a year ago over the same period. Net sales spiked to $7.38 billion USD in Q4 from $6.71 billion USD a year earlier.

“We continue to see strength driven by our key growth pillars, while at the same time prioritizing investments in our brands and delivering on efficiencies,” says Kraft Heinz CEO and chair of the board Miguel Patricio.

The company’s accrued marketing spend was down about 7% from 2021 levels, to about $750 million, while price increased 15.2 percentage points versus the prior year period offsetting volume declines.

In a prepared statement, Patricio says Kraft Heinz is “connecting with consumers through disruptive marketing and it’s being recognized more and more externally,” citing 11 Cannes Lions wins in 2022, the most in the company’s history. “And through data, technology, and our in-house agency, The Kitchen, we are driving amplified earned media and moving at the speed of culture,” he said.

Last year, Patricio notes that it drove more earned media coverage for our brands than ever before. Earned impressions more than doubled over the last two years, with seven brand activations garnering one billion or more earned media impressions in 2022 alone.

The brand, he says, is also succeeding with strategic partnerships. This includes launching IHOP-branded coffee in retail – leveraging the scale and capabilities of its existing coffee business, and “partnering with a fan favorite brand” to reach new consumers.

In North America, he notes, it is focused on best-in-class execution to support category leading brands. Total distribution points (TDPs) were up in 2022 relative to 2019, despite purposely reducing its number of SKUs by approximately 50% to drive focus and profitability.

“We continue to compete very well against private label,” Patricio notes. “Private label growth is not coming from us, rather from other branded competition, underscoring the strength of our brands.”