While Kraft Heinz continues to invest in its marketing, it came in with below consensus revenue numbers.
The maker of KD, Philadelphia Cream Cheese and Maxwell House Coffee is reporting a Q2 revenue of $6.72 billion USD, up 2.6%, but shy of analyst expectations of $6.82 billion USD.
Prices rose 11%, but volumes declined 7%.
Kraft Heinz CEO and chair Miguel Patricio said the company delivered strong results, increasing net sales and profits, growing across emerging markets, foodservice and U.S. retail. In the company’s pre-recorded management discussions today, he also proclaimed that price increases are “done” and that the company hasn’t lost any incremental share to private label.
“We grew profits while also investing in marketing, research and development and technology, which we funded through gross efficiencies,” Patricio noted.
“In the second quarter, we increased our marketing spend by 23% year-over-year,” Patricio said.
He cited the CPG’s ability to generate “best-in class marketing activations” such as its first-ever global masterbrand campaign for Heinz, highlighting the irrational love that consumers have for the brand.
Through its investments in R&D and marketing, Patricio says the company is “not only enabling our current performance, but investing for the future.” He also cited being recognized with 21 Lions for Kraft Heinz marketing and advertising campaigns at the Cannes Lions International Festival of Creativity this year – “the most ever for Kraft Heinz, and more importantly, the most for any food company in the world.”
The company said it is expecting innovation to ramp up in the second half of 2023 and into 2024. After conducting regional tests stateside, it launched NotCheese, NotMayo and plant-based Philly nationally. “We are launching with robust media support, and plan to reach full distribution by the fourth quarter,” Patricio says, adding that it is expanding into new grocery aisles with Kraft Mac & Cheese going into frozen.
In addition, it’s Tingly Ted’s hot sauce, launched in partnership with pop singer Ed Sheeran, is “doing very well,” the company says. It is live in Europe and the UK, and currently launching in North America.
