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Kraft Heinz SWOT & PESTLE Analysis

ID : 5284553| Mar 2019| 15 pages

COMPANY PROFILE -Kraft Heinz

Business Sector :FMCG, Food and Beverages

Operating Geography :United Kingdom, Global

About Kraft Heinz :

Kraft Heinz is an American multinational food and beverage company with sales in more than 190 countries. Headquartered in both Pittsburgh and Chicago, Kraft Heinz is a globally trusted producer of high quality delicious foods which come under a host of iconic brands like Kraft, Heinz, ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Smart Ones and Velveeta. This company was formed by the merger of Kraft foods and Heinz in 2015. It has become the globe's fifth largest food and beverage company and third largest in the United States. Kraft Heinz had 39000 employees as of 2017. Kraft Heinz merger contributed to a large number of brand extensions that proved out to be beneficial in generating extra revenue. One such brand extension of Kraft Heinz witnessed by consumers in 2018 was ‘Just crack an egg’, which is a first-of-its-kind savory product that prepares delicious breakfast in no time. The Company claims to provide “high quality, great taste and nutrition for all eating occasions whether at home, in restaurants or on the go.”
Kraft Heinz mission statement reads “We are Kraft Heinz. We are not for everyone, but we are exceptional for the few. Our values of Ownership and Meritocracy are two exciting elements of the Kraft Heinz culture. They create an environment of empowerment unique to our company and provide high-potential employees with unlimited growth opportunity.” Kraft Heinz vision is “To Be the Best Food Company, Growing a Better World.” Kraft Heinz Unique selling proposition or USP lies in it being one the leading food and beverage companies across the world, offering unparalleled range of products from iconic brands. It is the topmost food and beverage brand in North America and the fifth largest food and beverage Company in the world.

Kraft Heinz Revenue :


$26,232 million - FY ending 31st December 2017 (y-o-y growth of negative -0.9%)
$26,487 million - FY ending 31st December 2016

Competitive Analysis of Kraft Heinz

SWOT
PESTLE
One of the most notable mergers that the food industry witnessed in 2015 was the alliance of Kraft foods with H.J. Heinz. This merger positioned Kraft Heinz as the top food and beverage brand in North America and the fifth largest food and beverage company in the world. The company offers products from more than 200 supreme brands. The report manifests a discussion on all the internal and external factors and their impacts on the company's micro and macro environment through the SWOT analysis. Precisely the SWOT analysis is a structure, utilized to evaluate a Company's competitive stance by recognizing its internal strategic factors like strengths and weaknesses, external strategic factors like opportunities and threats.
The merger of the two brands with similar natures exhibited a substantial opportunity for synergy. A historic moment was witnessed when Kraft foods and Heinz merged to form a powerful business with numerous brands germinating under the same roof. Kraft Heinz became a strong global leader in the food industry. Its robust presence in various food categories makes Kraft Heinz a market leader providing a core competitive advantage over its peers from the industry. Strong presence in more than 70 countries, having more than 200 brands under its umbrella, robust fiscal muscle, innovative business and marketing strategies, distinguished product categories etc., are the key strengths of Kraft Heinz.
Commodity recall is one of the key weaknesses of the entire food and beverage industry, which damages the brand reputation and leads to immense monetary losses. Recently, in 2018 Kraft Heinz recalled 7,000 cases of Taco Bell Salsa Con Queso Mild Cheese Dip because the products showed signs that could lead to a form of food poisoning.
Kraft Heinz is rapidly increasing its presence in developed and emerging markets. With its strong financial muscle, this American food and beverage multinational can easily grab the opportunities in various food sectors, which have high demand for healthy food, transition towards ready to eat food options, increasing demand for baby foods etc.
The food and beverage industry is one amongst the highly competitive industries. To have a sustainable presence in such a competitive environment it is important for Kraft Heinz to develop the demanding products and present the same in the most innovative manner. Kraft Heinz being a leader in the confectionery food segment is prone to a threat of losing its consumers as people are becoming more health conscious nowadays.
The SWOT analysis for Kraft Heinz is presented in the SWOT Matrix below, followed by the detailed analysis:
Strengths
Weaknesses
1. Strong brand name with a wide portfolio of products
2. Healthy growth with strong financials
3. Strong distribution channels
4. Robust investment in R&D
1. Frequent Product recalls
2. Increasing debt attracting unwanted risks
3. Food products have a limited shelf life
4. High cost of raw materials
Opportunities
Threats
1. Demand for healthier food products
2. Expansion of business to emerging markets
3. Huge Millennial Market
1. Increase in regulations in food industry
2. Competition from established players
3. Health conscious people avoiding confectionery
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Detailed SWOT Analysis of Kraft Heinz

 

Strength

1. Strong brand name with anunparalleled portfolio of leading products: Kraft Heinz manufactures and markets various food and beverage products under the name of iconic brands such as Kraft, Heinz, Velveeta, Planters, Oscar Mayer, Maxwell House,Lunchables, Jell-O, Caprisun, Kool-Aid, Cracker Barrel and Philadelphia etc. The Company offers products for all occasions like home, restaurant and on the go. It is the world's fifth largest food and beverage company and stands third in the USA. In 2015, the successful merger of H.J. Heinz Holding Corporation with the Kraft Foods Group created The Kraft Heinz Company which was a transformational combination generating a global powerhouse in food and beverage. The Kraft brand has 80%+ awareness in 14 international countries whereas Heinz has presence in 13 of these. The merger gave birth to phenomenal benefits like improved scales in Key North America Retail and Foodservice Markets, international expansion of Kraft products through Heinz Distribution network, anchorage by long-term partners (Berkshire Hathaway and 3G Capital) with proven track records and realization of its goal of $1.5 billion net savings by 2017.The Company's margins are higher than the industry which is due to the Company's strong brands that enjoy a pricing powerand the Company's efficient operations. This permits growth with relatively less capital.

2. Healthy growth with strong financials: The Net Sales of Kraft Heinz was $18,338 million in the year ended January 3, 2016. There was an increase of net sales by 67.9% to $18.3 billion and an increase of operating income by 68.3% to $2.6 billion for the same year which was mainly due to the merger in 2015. Post the merger, revenue more than doubled and net income has shifted from a negative to more than $3.4 billion. Operating margins spiked to 28.8% of sales in the first half of the year as EBITDA margins bettered to 31.5%, outperforming competitors by a point or ten.

3. Strong distribution channels: Kraft Heinz has presence in more than 190 countries. As food industry low margins, it requires efficient distribution processes. The merger of Kraft and Heinz has helped in bringing together the distribution channels of both the companies’ in order to get the best results. Kraft's products can now leverage the extensive platform of Heinz for international growth.The company uses new technologies in order to make the processes efficient and innovative. Kraft Heinz sell their products through their our own sales organizations and through independent brokers, agents and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries, pharmacies, mass merchants, club stores, foodservice distributors and institutions, including hotels, restaurants, hospitals, health care facilities, and certain government agencies. Wal-Mart Stores Inc. are their largest customers, apart from additional key customers in different parts of the world.

The remaining section under "Strength" is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

This section is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
1. Kraft Heinz SWOT and PESTLE analysis report substantiates a comprehension of the intricate internal and external factors influencing the brand and its operations.
2. The SWOT analysis report incorporates internal and external analysis. Internal analysis manifests this American food and beverage Company’s strengths and weaknesses, whereas the external analysis helps to identify the opportunities for progress and threats that can hinder growth.
3. The Pestle analysis highlights the current trends in the FMCG industry with an explicit depiction of macro factors and its influences on the industry and extensively on the Kraft Heinz company.
4. The analysis report helps in identifying the impact on Kraft Heinz business model by the influencers like political, economic, social, technological, legal and environmental factors
5. Penetration into the Kraft Heinz business diversification, extracting its key business segments and highlighting its major competitors
6. Analysis of the Kraft- Heinz merger, acquisitions, capital raising, equity transactions, alliances or partnership ventures, deal valuations and the synergies that were achieved with them.
7. Comprehensive company analysis to infer information about company profile, number of employees, business model, business plans and marketing strategy, including an abstract data of Kraft Heinz founders, its headquarters, owners & stakeholders, share price, subsidiaries, value proposition, and revenue jumps.
8. Summarization of Kraft Heinz USP or unique selling proposition, mission statement and vision statement
9. Penetrations into Kraft Heinz business model, along with further categorization and analysis of key business segments and business case study.
10. Crisp synopsis of the Kraft Heinz core competencies that added competitive advantage of the company over its major competitors.
11. Identifying the core values, key performance indicators and success factors that contributed to sustainable growth and proliferation.
Copyrights and Disclaimer

Kraft Heinz SWOT and PESTLE analysis has been conducted by Anupa Jose and reviewed by senior analysts from Barakaat Consulting - an Ezzi IT and Business Consulting venture.

Copyright of Kraft Heinz SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

Kraft Heinz SWOT & PESTLE Analysis
Price : USD 12.53