Miguel Patricio, who takes over as chief executive of US food heavyweight Kraft Heinz on Monday (1 July), has said he is keen to reinvigorate some of the company’s best-known brands.
Speaking to the Wall Street Journal newspaper, Patricio said: “At the moment we need more focus.”
The former chief marketing officer of drinks giant Anheuser-Busch InBev told the Journal Kraft Heinz needs bolder marketing for its products and he suggested by keeping a close eye on costs – through its zero-based budgeting strategy – it could spend more on marketing and new product development.
Patricio, who replaces Bernardo Hees as CEO of the ketchup, mayonnaise and soup maker, has a number of problems to solve when he takes the hot seat.
Kraft Heinz reported a huge US$12.6bn fourth-quarter loss on the back of a $15.4bn write-down of assets in February, allied with an investigation by the US Securities and Exchange Commission into purchasing and accounting practises. The company has since restated its earnings for the past three years.
Its share price has plummeted to $31, less than half the value when private-equity firm 3G Capital and billionaire businessman Warren Buffett’s Berkshire Hathaway did a deal to buy and merge Kraft Foods with H.J. Heinz in 2015.
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This week, Buffett played down reports of a rift between him and 3G co-founder Jorge Lemann but reiterated his opinion that they paid too much for what is now Kraft Heinz.
The company is now saddled with $31bn in debt.
Since its merger, the company has exceeded its target of cutting more than $1.5bn in annual costs, but Patricio told the Journal he has no imminent plans to put the company’s finances on an even keel by selling brands.
“The zero-base budgeting that I love isn’t about cutting costs,” he told the newspaper. “It’s about questioning your costs everyday.”
With an eye on improving oversight, Patricio told the paper Kraft Heinz will be hiring a chief procurement officer who will report directly to him.