Kraft Heinz has confirmed to Food Dive that it will invest $3 billion in its U.S. manufacturing facilities, marking the largest investment in its plants in decades. Pedro Navio, the president of Kraft Heinz’s North America operations, informed Reuters last week that these planned investments could result in the addition of 3,500 employees to the workforce of the Lunchables producer. A significant part of this investment includes a $400 million distribution center being established in DeKalb, Illinois, which is expected to create 60 jobs. This transaction was initially announced in 2023. Reuters was the first to report on the manufacturing investment, and while Kraft Heinz has confirmed the news, it has chosen not to provide additional details to Food Dive.
Amid President Donald Trump’s threats of extensive tariffs on imports, Kraft Heinz’s investment in its U.S. factories may help mitigate the effects of trade uncertainty. Navio mentioned to Reuters that tariffs played a role in the company’s decision to pursue this investment. The majority of Kraft Heinz’s products are manufactured domestically, although its Maxwell House coffee brand faces tariffs on imported beans.
The company has been grappling with declining sales as consumers tighten their budgets due to inflation. In response, Kraft Heinz has focused on expanding its Away From Home business, which includes condiment dispensers at foodservice locations across the country. Additionally, it is broadening its product portfolio to enter growing market segments. This month, Kraft Heinz announced the launch of Lunchables with PB&J, aiming to capture market share from J.M. Smucker’s nearly billion-dollar brand, Uncrustables.
Earlier this week, Kraft Heinz indicated that it would explore “potential strategic transactions,” as stated by CEO Carlos Abrams-Rivera, in an effort to drive “profitable growth and value creation.” Analyst Robert Moskow from TD Cowen suggested in a note to investors that Kraft Heinz should consider divesting some of its products to avoid negative financial impacts from declining sales.
Moreover, the company’s partnership with Walgreens to distribute Citracal Petites is an example of how it aims to diversify its offerings and strengthen its market presence. By integrating products like Citracal Petites into its lineup, Kraft Heinz seeks to enhance its reach and appeal to a broader customer base.