Kraft Heinz merged its operations in Canada with its US division with the aim of “aiming to rationalize and synergize” its activities in both markets.
The creation of a âzoneâ in North America is part of a transformation strategy defined by CEO Miguel Patricio in the fall of last year, with a reinvestment in its core and a focus on the historic brands of the manufacturer of Heinz Ketchup, as well as more precise product execution. innovation and the development of so-called challenger brands.
In its most recent fiscal year ended Dec. 26, the Kraft Heinz Group generated revenues of US $ 26.2 billion, with the United States contributing $ 19.2 billion and Canada contributing $ 1.6 billion. . International operations did the rest. The merger of the divisions is expected to take effect in the second quarter of fiscal 2022.
“This evolved model is expected to help the North America region drive high value-added products, processes and service innovations, supported by resources from both countries, while accelerating time to market,” said the company. in a press release.
Jobs are also expected to disappear as a result of the merger. A Kraft Heinz spokesperson confirmed, âWe anticipate that the combination of our US and Canada operations will impact between 2% and 3% of our total business population in North America. There will be no impact on our hourly manufacturing population or on plant closures. “
North America will be led by Carlos Abrams-Rivera as president. He holds the same position for the American company. The new division will be organized around three units, each with individual managers: Taste, Meals and Away From Home; Fresh, Drinks and Desserts; and coffee from Canada and North America.
The first two of these divisions will house the six âconsumer-centricâ platforms created last September as part of the transformation plan. Elevation of taste; Improved easy meals; Snacking real food; Quick fresh meals; Easy indulgent desserts; and tasty hydration.
Patricio said: âAs the needs of consumers, customers and employees change, we must be able to anticipate, adjust and react quickly.
âThe combination of our operations in the United States and Canada – two dynamic areas – gives us a distinct advantage and will produce faster and more efficient results so that we can continue to invest in our strategic plan and drive sustainable growth. While this is an evolution of our structure, it is part of a larger revolution in how we will work at Kraft Heinz in the future. ”
When the CEO presented the strategy in September 2020, just over a year after joining the company, he set targets for long-term organic growth, adjusted EBITDA and EPS, namely, in the respective order, 1-2%, 2-3% and 4-6%.
The Group’s organic growth for the fiscal year ended in December was 6.5%, with 7.6% for the United States and 4.7% for the international market. Canada broke the trend with a 0.1% drop.
Coinciding with last year’s plan announcement, Kraft Heinz revealed a deal to sell a selection of cheese assets to French dairy giant Lactalis for $ 3.2 billion to raise capital to support growth. Earlier this year, it sold Planters’ nut business to its US counterpart Hormel Foods.
He recently announced two trade deals in Brazil – a controlling stake in BR Spices and the outright purchase of condiment maker Hemmer. Over the summer, Kraft Heinz also acquired Assan Foods, a Turkey-based condiment supplier.