Kraft Heinz signaled a shift in its turnaround strategy by naming a global brand marketing expert to replace Bernardo Hees as chief executive.
Miguel Patricio is a consumer packaged-foods veteran who worked for two decades at beer giant Anheuser-Busch InBev, including as chief marketing officer from 2012 through last year. He will succeed Hees effective July 1, Kraft Heinz announced on Monday.
Hees, a partner at 3G Capital, will move back to the investment firm after six years at the Kraft helm. 3G crafted the merger of Kraft Foods and H.J. Heinz with Warren Buffett’s Berkshire Hathaway in 2015.
Under Hees’s leadership, Kraft followed 3G’s blueprint of cutting costs to boost sales in the slow-growing food industry. But investor confidence took a hit in February when the company reduced its dividend by 36%, wrote down its brands by $15 billion, and disclosed an investigation by the Securities and Exchange Commission into its accounting and procurement practices.
Patricio, a native of Portugal, said his focus will be on improving Kraft’s speed, organic growth, brand building and making the company more consumer oriented.
“I bring a very different background with my experience in consumer food,” he told CNBC.
Kraft shares, which are down roughly 20% this year, rose 2% in pre-market trading. “We think this change at the helm … demonstrates that the company is very serious about pivoting its priorities toward growth rather than just cost cutting,” analysts at Credit Suisse wrote in a client note.
As CNBC reports, packaged foods companies have been “struggling to create growth in the face of upstart rivals, rapidly changing consumer trends and their own slower-paced cultures.” Kellogg, Mondelez International, and Campbell Soup have all recently replaced their CEOs.
Kraft Heinz extracted roughly $1.7 billion in savings from the merger, slashing its research and development department, and laid off employees with extensive marketing experience. But according to CNBC, “analysts have wondered whether 3G cut too deeply and quickly, starving brands of investment needed for growth.”
Kraft’s brands include Heinz ketchup, Maxwell House coffee, and Oscar Mayer meats. “Some are a little bit dusty and we have to rejuvenate them,” Patricio said.