Kraft Heinz is hiking ad spend 4% year-to-date compared to last year, after the company reported a Q3 revenue slump.
The CPG’s net sales fell 2.8% to $6.38 billion, below analysts’ estimates of $6.42 billion, in part due to a weakening Lunchables business, and a damning Consumer Reports stateside claiming high levels of sodium in the snack kit and also competitive pressures.
In this week’s earnings call, chief executive officer Carlos Abrams-Rivera conceded that the back-to-school period was more difficult than anticipated, but that it will ensure there is a “right level of investing” being done in marketing (not just by increasing spend, but also by focusing more on effectiveness), as well as bringing more innovative to its products and formats.
Kraft Heinz is putting forward what it calls a “brand growth system” for Lunchables, a repeatable global model to “solve consumer pain points,” Abrams-Rivera explains.
For Mac & Cheese, which in Canada is branded as Kraft Dinner, Abrams-Rivera says its Cups format is seeing improvements. The company is reporting 1.8 percentage point share gain with Cups, building on 0.6 from Q2.
In Canada, the company recently positioned KD as accommodating usage occasions and dayparts beyond just dinner and spoofed TikTok trends to appeal to Zillennials, focusing again on its Cups format. To appeal to millennials, it launched Ranch and Jalapeño flavours.
Cool Whip, meanwhile, gained 1.6 percentage points in its share value in Q3, building on its 0.1 percentage points of share gain in Q2. Kraft Heinz attributes the positive results to “a combination of capacity improvements [and] effective media marketing.”
The CPG adds it is building distribution in club and dollar channels and is being “prudent and surgical” with promotions.