Kraft Heinz Struggles with Volume Decline, Focuses on Brand Revitalization

Facing Strained Sales

Sales volumes are dipping for Kraft Heinz. The company saw a 3.5% decrease in volume/mix in 2024, primarily driven by a 4.2% decline in North America. Overall organic net sales dropped 2.1% to $25.9 billion for the year.

Branding the Way Forward

CEO Carlos Abrams-Rivera pinpointed four key brands lagging behind: Lunchables, Kraft Mayonnaise, Kraft Mac & Cheese, and Capri Sun. These brands are receiving special attention through a “brand growth system.” This involves in-depth analyses to identify opportunities for improvement and growth.

Revamping Beloved Brands

Kraft Heinz is aiming to revitalize these brands in specific ways. Lunchables will see wider availability in different situations and a focus on flavor innovation to match evolving customer preferences. Kraft Mayonnaise aims to re-engage previous customers and attract new ones with new flavors, starting with a successful pickle mayo rollout in the US and expanding globally.

Kraft Mac & Cheese is focusing on new flavors, packaging options, and partnerships to regain its momentum. Capri Sun is undergoing a makeover with a new 64-oz multi-serve bottle, as well as single-serve sizes.

Addressing Performance Challenges

When questioned about underperformance in categories with steady growth rates, Abrams-Rivera emphasized the four struggling brands concentrated in the US retail market. His view is that these specific brands are solely responsible for the company’s challenges.

Financial Performance

Kraft Heinz’s net income for 2024 reached $2.7 billion, or $2.26 per share, representing a 3.9% decrease compared to the previous year. Annual sales totaled $25.8 billion, a 3% drop from the year before. Operating income fell significantly to $1.7 billion from $4.6 billion, primarily due to $3 billion in impairment charges taken during the year.

Sales across all business units, including North America, International Developed Markets, and Emerging Markets, declined.

Forecast for 2025

Kraft Heinz anticipates flat to a 2.5% decrease in organic sales for fiscal 2025. This outlook reflects anticipated growth in Emerging Markets and global away-from-home segments, while US retail categories face a slower recovery.