Kraft Heinz still feeling impact of cost-conscious consumers

The Heinz ketchup brand owner narrowly missed Wall Street estimates for its first-quarter sales with net sales increasing by 1.2% year-on-year to $6.41bn, slightly below analysts’ average estimates of $6.43bn.

Volumes fell by 3.2 percentage points in the three months ended 30 March, though this was an improvement on the 4.4 percentage point decline seen in the fourth quarter of 2023.

In February, Kraft Heinz said it was anticipating a return to “historical activity” volume levels in the latter half of 2024.

Speaking to analysts yesterday (2 May), CEO Carlos Abrams-Rivera reiterated this stance but cautioned more generally “like many companies we continue to navigate through short-term volatility – pressured consumer, persistent inflation, headwinds from SNAP [Supplemental Nutrition Assistance Programme], industry softness in away from home and rising supply chain risks are some of the common themes the industry is currently facing”.

The US foodservice channel has proved a particular challenge to Kraft Heinz as cost-conscious consumers are eating out less with Abrams-Rivera admitting “these results were impacted by softening markets in the US, especially for restaurants”.

Prices rose 2.7 percentage points across Kraft Heinz’s portfolio in Q1.

Kraft Heinz reported first-quarter net income was down 3.9% year-on year at $804m, while adjusted operating income was up 1.7% at $1.26bn.

Just Food