Heinz Meanz Business In 2021
David Adams, Head of Ireland, Kraft Heinz, talks to Maev Martin about NPD plans for 2021, coping with COVID-19, launching a direct-to-consumer website
Like other big FMCG companies, Kraft Heinz believes that veganism and plant-based foods will be one of the major innovations in grocery retail over the coming years and they are responding to the rising consumer demand.
“Veganism is a trend that we are seeing across the board in so many grocery retail categories and it is being driven by vegans, but also by flexitarians who want to eat less meat and have a more balanced diet,” he says.
“These consumers are looking for a broader range of food and for more excitement in categories. Our range of vegan mayonnaise and salad cream will be launched in Ireland in January 2021. A lot of research went into the development of that range because we had to maintain the same product taste and we are proud that we have managed to do that.”
The launch will be supported by a strong media investment over the coming months.
“Globally, Kraft Heinz were aiming to have 73% of our products compliant with global nutrition guidelines by 2023, but we have already achieved that and we have reached
76%, so we have revised that target to 85% by 2025,” he says.
“We will achieve that new target by reducing salt and sugar from our products, which we have been doing over the years, and plant-based is the next step for us in achieving our nutrition targets. Beans are already a vegan product, so we are looking to take beans as a base for a new plant-based range. We are working through a few ideas at the moment and we are excited about the possibilities in the plant-based arena.”
Another, and related, passion at Kraft Heinz is their focus on sustainability. It is a massive part of the business and the company has made some bold commitments, both globally and in Ireland.
“We have committed to 100% of our packaging being recyclable, reusable or compostable by 2025 and we are close to achieving this, particularly in Europe,” says Adams.
“In Ireland we partnered with Tesco Ireland earlier this year on an initiative called Project Unwrapped to remove shrink wrap from multi- pack products of beans and soups, while still providing customers with the same value. We will be embarking on more initiatives like this next year with other retailers. We are keen to evolve our product offering next year to be more sustainable by taking out more plastic and that should happen by the second half of 2021. We also have plans in place to completely redesign our packaging in 2021 to enable us to achieve our 2025 goal.”
Has the Covid-19 crisis made it more difficult to achieve these sustainability goals? “The foodservice industry had been moving away from single serve sachets and towards more sustainable solutions, but during the pandemic there has been a switch back to sachets and single serve items,” he says.
“However, as a business, we are aiming to not let that detract from our ambitions because people really want sustainable solutions in the long term."
“With that in mind, we recently launched a great innovation in the foodservice area which is our sustainable contactless solution. We have a machine that pumps out ketchup in some key foodservice outlets. It is a contactless, Covid- friendly solution. We are also moving to more sustainable single use solutions and we have some exciting innovations in this area. We think that, for the long-term, removing plastic is the right thing to do for the planet, so we are committed to meeting our long term objectives, regardless of any Covid-related short term shifts in consumer behaviour,” Adams adds.
Getting Closer To Retailers
Adams has been hugely impressed by the resilience of the Kraft Heinz team in Ireland since the start of the global pandemic. “At the start of the pandemic, we saw a huge sales spike with a lot of panic buying in our canned business and it was challenging to keep up with demand,” he says.
“But I was very impressed by how quickly and efficiently our warehousing teams reacted and the requirement to adapt also brought us closer to our retail partners and helped to drive further collaboration. The Irish retailers were very much in it together and we worked with them, from our commercial to supply chain to marketing teams, and adjusted our campaigns in collaboration with retailers.
“The speed at which our business reacted to the crisis and the cooperation from retailers were major highpoints of the year for me. Our team have stayed intact and we have all worked from home since March and no-one has contracted Covid-19. We have been extremely fortunate in that regard as it hasn’t been the same experience for many other companies in our industry and in other industries," he says.
"One of the challenges over the past year has been getting the work life balance right across the team. To try and address this, we gave our employees the gift of time – we gave them a day off at the end of June to spend time with family and absorb what was happening. As the manager of the team in Ireland, I had to be aware of how people were feeling at different points in the Covid-19 journey and that is a continuing challenge.”
Impact On Sales
Not surprisingly, Adams reports that the massive increase in stay at home consumption this year provided a big boost to their retail business.
“The impact of COVID-19 on our retail business has been hugely positive. In the first two or three months, there was a huge surge in demand in our canned business – we saw an over 100% sales increase year-on-year for the initial two or three weeks of the pandemic," he says.
That has levelled off, but what we are now seeing is a consistent increase in our sauces business (ketchup, mayonnaise and condiments) of between 20% and 30% because of people staying at home, consuming at home and trying new recipes at home. There has also been a big increase in sales of our oriental range, the Amoy brand, and again that is down to people cooking at home. Consequently, we have been uploading recipes to our social media channels for consumers to use at home when they are cooking.”
While Kraft Heinz had to shelve its NPD and media campaign plans for the foodservice sector this year, Adams says it has given them time to plan for 2021 when, hopefully, hospitality will be up and running again.
“The benefit that we have experienced in the retail business has more than offset the decline in the hospitality business,” he says.
“We saw an increase of, on average, 20% to 25% in new shoppers coming back to our brands across the board. The challenge is to retain those customers as we head to what we hope will be a more normalised way of working in 2021 and beyond,” Adams adds.
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