Growth Strategic Options of Kraft Heinz

Growth Strategic Options of Kraft Heinz

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  • Teaching Notes
Abstract

This case discusses how a leading U.S.-based food retailer, Kraft Heinz Co (hereafter Kraft Heinz), was, by February 2019, performing poorly in the stock market. Critics believed that heavy debt, its implementation of zero-based budgeting, and lack of innovation in organic food categories, where there was a significant shift in consumer preference, were key reasons for Kraft Heinz’s downfall. The company not only tried to introduce new products and brands but also expanded into the organic food category by acquiring startups. Kraft Heinz intended to sell some of its existing brands as well, yet several challenges remained for CEO Miguel Patricio, who was appointed in July 2019. Students are asked to consider what strategic options Patricio should pursue for the growth of Kraft Heinz. Should he discontinue the implementation of zero-based budgeting and invest more in innovation? Is a high debt–earnings ratio likely to impact Patricio’s decision? How should Patricio manage the brand portfolio of Kraft Heinz?

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