Kraft Heinz pulls back on price hikes amid declining volume sales

Kraft Heinz is pausing further price increases in most of its markets, as the FMCG giant seeks a better “balance” between price rises and volume declines.

On an earnings call on Wednesday (15), CEO Miguel Patricio said that the maker has no current plan to announce new pricing in North America, Europe, Latin America and most of Asia.”

The owner of brands including Heinz, Philadelphia and Lunchables reported net sales growth of 10 per cent in the fourth quarter of its fiscal year, reaching £6.1 billion.

Growth so far has “all been driven by price”, global CFO Andre Maciel said. Prices rose by 15.2 per cent, while volume sales declined by 4.8 per cent.

“Volume is still negative. Obviously it improves throughout the quarters as we start to lap the prices, but even at the end of the year, it will still be negative,” Maciel continued.

“As we think about the future, it’s not the balance we want. We want a good balance as we think about top line growth between price and volume.”

EVP and president of the North America zone, Carlos Abrams-Rivera, added that the business is working to ensure it can reach all consumers by utilising its “full price size architecture” and providing options at every price point.

“We are also making sure that we continue to expand in the number of formats and price points that we offer within our categories to make sure we maintain the consumers that have been with us over the last couple of years,” he explained.

“Those consumers [who] are going to dollar stores, we’re actually improving the number of SKUs that we have available to them. So that way, there’s a point in which they can come into the category.”

The business swung to a profit in the first half, after reporting a loss of £212m in the first half of 2022. Net income grew 447.9 per cent to £736m, while adjusted EBITDA rose by 8.6 per cent.