Kraft revealed that it has increased prices for about two-thirds of its portfolio, representing about 4-5% net pricing, “but that is not the only thing we are doing,” said Carlos Abrams-Rivera, US zone president.
He explained that the company is “using the full revenue management system,” including strategies such as price-pack architecture, and instituting “a design to value focus in our brands.”
Abrams-Rivera explained this involves ensuring that products have the right ingredients, the right pack size, the right materials and agile ingredient formulations to better weather inflation.
Finally, Kraft Heinz is offsetting the negative impact of inflation by strengthening the resiliency of its portfolio through renovation to ensure that products meet modern consumer needs.
“Year to date we have renovated about 45% of our portfolio, and by the end of 2022 that number will be 90%, which means that as we go through this, we’re also making sure that our portfolio is stronger,” he said.
While CFO Paula Basillo said he is “very confident” the pricing Kraft Heinz has taken so far is enough to “protect our margin and deal with the inflation we are seeing today, and also protect us with carryover inflation in 2022,” he added that the company is open to raising prices again if inflation continues to rise.
If another round of price increases is necessary, Abrams-Rivera said the company would ensure that consumers can still access the products they love by offering select promotions and restoring key retail activations, such as back-to-school events happening now.