retail news in context, analysis with attitude

CNBC reports that “Kraft Heinz’s U.S. chief marketing and global brand officer,  Eduardo Luz, is leaving the company,” one of several senior executives departing the CPG giant.

Here’s how CNBC puts the departure in a broader concept:

“Luz … started with the company at H.J Heinz, which private equity firm 3G Capital and Berkshire Hathaway acquired in 2013 … In his time managing the grocery portfolio, Luz helped the unit restore top-line growth, according the internal memo. Luz is credited with the Heinz brand’s growth, which has seen sales rise 26% over the past six years, according to Nielsen. He also oversaw the launch of frozen meal brand Devour, which helped revitalize its branded frozen-food business. But other brands at Kraft Heinz, particularly those that came from the Kraft Foods portfolio, have not fared as well. Many lack the same global appeal as brands like Heinz ketchup. Products like Maxwell House packaged coffee are particularly susceptible to premium or cheaper store-brand competitors.

“Kraft Heinz has been criticized for focusing too much on 3G’s hallmark cost-cutting and large-scale dealmaking, instead of needed investment to combat against intensifying competition. Struggles with the company’s Oscar Mayer and Kraft cheese brands contributed to the $15 billion write-down Kraft Heinz disclosed February.”
KC's View:
Yet more evidence of what we’ve talked about previously on MNB … that it shouldn’t come as such a surprise that a company cannot cut its way to prosperity … that it is extraordinary how little real innovation seems to take place at major CPG companies … and that there is an object lesson here for both manufacturers and retailers. If all they do is cut, and don’t invest in the kind of real innovations that can disrupt their own businesses as well as the competition’s, then they’re not going to succeed long-term.