Blog: CAGE blog: Heinz eyes growth through global mission
Katy Askew | 21 March 2012
Speaking during the Consumer Analyst Group Europe investor conference this week, the management of US giant Heinz once again took the opportunity to highlight the significance the group attaches to international expansion.
For some years now, Heinz - along with many other food majors - has been beating the same drum. In the developed markets of the US and Europe, the group has focused its portfolio, increased efficiency and invested in building its brands with the aim of creating a high-margin, low-growth business.
In these markets, Heinz has invested in expanding its added-value meals and snacks brands, with 90% of meals and snacks revenues coming from developed markets. While this business has taken a bit of a hit in the downturn, with the importance of lower prices outweighing convenience, the firm has taken measures - such as introducing smaller pack sizes at lower price points - to protect market share and firm-up sales.
Meanwhile, CFO Art Winkleblack enthusiastically reiterated, the group is looking to emerging economies to drive dynamic sales growth.
Currently, two-thirds of Heinz' business is derived from outside the US, with 21% of total sales being generated in emerging markets, Winkleblack told analysts at CAGE.
In ketchups and sauces, Winkleblack revealed that the company expects the category size in emerging markets to eclipse that of developed markets in five years. Likewise, in infant nutrition, high birth rates and an expanding middle class are driving expansion of the category in emerging markets.
Heinz has done much to tailor its offering to meet local needs, Winkleblack insisted. "We don't go into a country and say one-size fits all," he explained. "What we are looking to do is expand in our categories."
Through various bolt-on acquisitions, Heinz has indeed expanded its branded offering to include local and regional brands that fit into its "trio of growth engines" - sauces, infant nutrition and meal solutions.
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