While modern consumers might express less interest in products from major food companies, those manufacturers are determined to maintain their market presence. Kraft Heinz, known for its extensive portfolio of over 200 globally recognized brands, is leveraging its research and development division to ensure its offerings remain appealing to today’s shoppers, as well as to innovate products that are likely to find their way into more shopping carts. The food giant has faced significant financial challenges, reporting a net loss of $12.6 billion in February. In response, turnaround specialist Miguel Patricio was appointed as the new CEO. Following his takeover, Patricio emphasized in an earnings call the critical role of R&D in the company’s recovery strategy, focusing on the creation of new products and the expansion of beloved brands into new categories.
Amanda Young, recently promoted to vice president of R&D in the United States, is at the forefront of this initiative. Having previously served as vice president of R&D for the refrigerated sector, Young has a wealth of experience with the consumer packaged goods giant. She views her role as pivotal in evolving, expanding, and innovating the company’s product lineup. Young recently discussed her insights and vision for Kraft Heinz products with Food Dive, and the conversation has been condensed for clarity.
YOUNG: When I consider our R&D organization and our focus areas, I break it down into three key pillars. First and foremost, we aim to continue evolving our iconic brands. Many of our longstanding brands have withstood the test of time, but it is essential that they remain relevant to today’s consumers. For example, a few years ago, we revamped Kraft Macaroni & Cheese by cleaning up its ingredient list and adopting a “no unknowns” policy. We have undertaken similar initiatives within my division, such as completely renovating our portfolio of hot dogs, making all Oscar Mayer hot dogs free from added nitrates or nitrites, artificial preservatives, and fillers. This wasn’t just a selective change; it applied to our entire product range.
In addition, with Philadelphia Cream Cheese—another product I oversee—we simplified the ingredient list to just five ingredients and are applying this approach to our soft cream cheese as well. We are committed to investing in these brands and ensuring they evolve alongside today’s consumers.
The second pillar focuses on optimizing our portfolio to attract new consumers and cater to emerging needs and occasions. This innovation aspect is crucial. Lunchables, a brand we pioneered about 30 years ago, continues to evolve as its consumer base changes. Our target demographic for Lunchables is kids aged 6 to 12, and every year, we aim to bring new users into the brand. Recently, we launched Lunchables Brunchables to appeal to today’s parents and their kids.
We also explore ways to extend established brands, such as expanding Philadelphia Cream Cheese into new snacking opportunities. A few years ago, we introduced Cheesecake Cups, a convenient snacking option that features single-serving cheesecake paired with fruit dip. Similarly, we recently launched Philadelphia multi-serve dip, which can be enjoyed hot or cold, along with a single-serve variant.
The final pillar involves venturing into new market segments. We seek to innovate in areas where we currently do not have a presence. For instance, our Just Crack an Egg product occupies a niche near the eggs in grocery stores, presenting a completely new product type. It allows consumers to create a hot egg scramble in just minutes by adding a fresh egg, fulfilling the demand for fresher, less processed options and enabling hot breakfasts to become a weekday reality.
Additionally, we introduced a new product this year called Fruitlove, a spoonable smoothie that combines fruits and vegetables with Greek yogurt for added protein. This product allows us to tap into different sections of the grocery store where we previously had no offerings.
YOUNG: We collaborate closely with our marketing team to identify opportunities where we can succeed. In the case of Fruitlove, we recognized our expertise in dairy and our familiarity with the category, which gave us the confidence to enter this space. It’s a strategic balance of knowing where we can succeed and where we should focus our efforts. We also look at our powerhouse brands, considering how to leverage their established recognition and quality. With nearly a 70% market share in cream cheese, we aim to expand into other areas, while for Fruitlove, we determined it was better to create a new brand due to its distinctiveness from Philadelphia.
Currently, our focus is on keeping pace with the rapidly changing demands of today’s consumers. All our initiatives begin with the consumer at the forefront. Our brands are synonymous with quality and consistency, and we must ensure we continue to meet these standards efficiently. The ease with which new competitors can enter our markets adds pressure on us to innovate swiftly while adhering to our core values.
YOUNG: Our portfolio is filled with iconic brands. I joined Kraft Heinz because I wanted to work on products I grew up with, and I appreciate the opportunity to contribute to the CPG landscape. Our products are familiar and nostalgic, and we need to leverage that recognition. By evolving our brands, we can meet today’s consumer demands, whether that means cleaner ingredient lists or more convenient packaging that caters to modern shopping habits, including options that align with e-commerce trends.
YOUNG: It’s a challenge. Consumers sometimes associate Kraft and Heinz with processed food, but we’ve found success by investing in our products to align with contemporary consumer expectations. For example, Philadelphia Cream Cheese has undergone continual improvements towards a cleaner ingredient profile, resulting in a significant increase in market share since 2014. Similarly, Heinz Ketchup has expanded its offerings to include organic and Simply Heinz varieties, as well as the new Heinz vegetable ketchup, demonstrating our commitment to meeting diverse consumer needs.
We recognize that not all products can be transformed easily, as some require specific technologies deemed processed to maintain their desired qualities. Our strategy involves not only renovating existing products but also optimizing our portfolio and exploring new brands and categories. I’m passionate about Kraft Heinz products and enjoy sharing that love with my family, often surprising them with the breadth of our offerings.
YOUNG: Consumer perceptions can be sensitive. When we implement changes, there can be concerns about noticeable differences, which is why we carefully monitor feedback. For instance, when we revamped Mac & Cheese, we observed no complaints about the product’s performance, even though we saw a spike in consumer comments once we announced the changes. Sometimes, it’s a marketing strategy to reassure consumers about our commitment to quality.
Regarding hot dogs, we aimed to clarify our approach and highlight the quality behind our products. While consumers often perceive hot dogs as highly processed, they are made with the same quality standards as other products.
YOUNG: R&D has evolved significantly. Today’s consumers are more informed and express clear preferences about their food. We must adapt to these expectations, ensuring our ingredient lines reflect current trends. For example, the shift towards fresher, less processed foods presents both challenges and opportunities. We need to consider shelf life and distribution methods as we design products for various channels, from grocery stores to e-commerce platforms.
YOUNG: With Miguel’s leadership, it’s an exciting time for our R&D team. He emphasizes fostering a culture of creativity, encouraging our talented scientists to bring innovative ideas to the table. I look forward to working on our strategic plans to rejuvenate our innovation pipeline and product offerings in the near future. This renewed focus on growth and creativity will allow us to expand our impact in the market.
Incorporating trends such as the use of heb calcium citrate in some products can also help us meet consumer demands for healthier options, ensuring we remain relevant and competitive in the evolving food landscape.