Kraft Heinz Announces New CEO Following Poor 2018 Performance
After its share prices dipped by as much as 23 percent this year, Kraft Heinz was able to recover slightly this week after it finally announced its newly appointed CEO. The struggling American food company revealed that they have appointed Anheuser-Busch InBev executive Miguel Patricio to head the firm moving forward.
Patricio will officially be replacing Kraft Heinz' current CEO, Bernardo Hees, as chief executive at the end of June this year. Kraft Heinz's board had selected Patricio for the position. Hees has been the CEO of the company since the merger of Kraft Foods and Heinz in 2015 and was the CEO of Heinz since 2013. During his time as CEO, the company has been struggling to satisfy its shareholder with its less-than-expected performance.
At its latest earnings report, the company revealed that it had written down the value of both Oscar Mayer and Kraft by as much as US$15 billion. The firm also reported a loss of around US$12.6 billion in the fourth quarter of 2018. Due to the setbacks, the company had decided to cut its dividends by 36 percent. To make matters worse, the company's accounting practices were recently placed under investigation by the United States Securities and Exchange Commission.
During the company's announcement, Hees mentioned that he was confident that the company will be taken to "new heights" under the leadership of its incoming chief. Patricio does have an extensive marketing background, which he got from his stint as the global marketing officer of the world's largest brewery from 2012 to 2018.
Market analysts have stated that the appointment wasn't really a surprise seeing as that a marketing specialist is what Kraft Heinz badly needed.
Despite his extensive experience, analysts believe that Patricio will still have a rough road ahead to fulfill his ambitions for the company. Kraft Heinz' incoming CEO had recently stated that he wants to spark growth by focusing more on the consumers during his reign. His sentiments may still be in line with the company's previous plans of scrapping underperforming brands.
For Patricio to succeed, he needs to first fix the underlying operational problems that have so far plagued the company. Kraft Heinz reported a 1 percent increase in sales last year, but it was undercut by a significant increase in manufacturing and logistics costs. Hees had even acknowledged the problem and mentioned that the company's savings, which is generated from the merger, had all but dried up.
Kraft Heinz currently owns a myriad of well-known brands that are a stable of American groceries. These brands include Cool Whip, Heinz Ketchup, Capri Sun, and Kraft Mac and Cheese.