Breaking silos and expanding internationally helps Kraft Heinz come together

PARIS — International expansion, a focus on foodservice and the removal of silos have all contributed to Kraft Heinz Co.’s business growth over the past three years, two executives said June 15 at Deutsche Bank dbAccess Global Consumer Conference.

Kraft Heinz stock price on Nasdaq closed at $91.65 per share on June 15, 2017, but had fallen to $30.31 per share on June 14, 2019.

“Our brands were underinvested (three years ago),” said Rafael de Oliveira, area president of international markets. “Our assets, in some ways, depleted, underinvested. There was a lack of investor confidence. So we were really at the bottom.

Kraft Heinz’s stock price stopped plunging and closed at $36.18 per share on June 15 of this year.

Two building blocks for growth came in emerging markets and the restaurant business, said Andre Maciel, global chief financial officer.

“These two handsets represent 20% of our business and have grown double digits over the past three years and gained market share worldwide,” he said.

International sales, excluding Canada, for the year ended December 25, 2021, were $5.69 billion, compared to $5.25 billion for the year ended December 28, 2019.

Hiring outside talent, including Miguel Patricio as CEO, and breaking down silos to improve communication between business segments also helped Kraft Heinz turn around, Mr. de Oliveira said. Three years ago, the supply chain and the commercial side operated independently in many ways, he said, giving an example.

“Many business units in the United States, but also in (other) countries, (were) not taking advantage of the scale that we have as a company,” Mr. de Oliveira said. “So that’s changed a lot. It’s changed with over 50% of the management team coming from outside with experience in their functional areas.

Mr. Maciel added: “Dismantling silos is huge for our business.”