Kraft Heinz (KHC) agile portfolio management drives growth


The Kraft Heinz Company KHC is on the right track with Agile Portfolio Management as part of its transformation effort. In this regard, the company has concluded the sale of certain assets of the global cheese business as well as the license of specific trademarks to a subsidiary of the Lactalis Group. The deal was valued at nearly $ 3.3 billion, which includes a cash consideration of nearly $ 3.2 billion.

Pursuant to the agreement, Kraft Heinz divested its natural, shredded, cultured and specialty cheese businesses in the United States, its shredded cheese business in Canada, and its shredded, processed and natural cheese businesses outside the States. United and Canada. The transaction also includes Kraft Heinz’s global intellectual property rights to various brands such as Cracker Barrel, Breakstone’s, Knudsen, Athenos, Polly-O, Hoffman’s and the Cheez Whiz brand in most countries outside of the United States and the United States. Canada, among other names. Apart from that, the company has discharged perpetual licenses for the Kraft and Velveeta brands.

Kraft Heinz will maintain the Kraft Singles, Velveeta and Cheez Whiz processed cheese businesses in the United States and Canada. The company retains its Kraft, Velveeta and Cracker Barrel macaroni and cheese, Kraft sauces, and cream cheese, including Philadelphia cream cheese, worldwide.

All in all, the decision to divest the aforementioned businesses will help Kraft Heinz improve its overall growth profile, strategic focus and financial flexibility.

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What else should you know?

Kraft Heinz is committed to expanding the International Taste Elevation product platform and footprint in emerging markets as part of the focus on the operating model. To this end, management acquired a sauce-focused business – Assan Foods – from the private Turkish conglomerate Kibar Holding, in October 2021. With this takeover, the company is accelerating its growth in retail and catering in Europe, in the Middle East and Africa. In September 2021, Kraft Heinz signed an agreement to purchase the Brazilian condiments and sauces company – Companhia Hemmer Indústria e Comércio (“Hemmer”). The move will expand the taste options for consumers in Brazil and diversify Kraft Heinz’s product portfolio. The buyout will further accelerate the growth of the company’s condiments and sauces category. Shares of this company Zacks Rank # 3 (Hold) have risen 4.9% in the past year, compared to an industry decline of 1.6%.

Other food players win on buyouts

Several other companies in the food space such as Post Holdings, Inc. PUBLISH, Hormel Food Company HRL and McCormick & Company, Incorporated MKC profits from acquisitions.

In the fourth quarter of fiscal 2021, Post Holdings’ revenue included $ 99.8 million in net sales from acquisitions made through fiscal 2021. Buyouts include the grain-ready business. private label eating Egg Beaters, Almark Foods’ brand of liquid eggs and related assets and Peter Pan Nut Butter Brand.

Hormel Foods strengthens its activities through strategic acquisitions. In June, HRL acquired the Planters snack portfolio from The Kraft Heinz Company. Previously, the company acquired Sadler’s Smokehouse, a Texas-based smoked meats company, based in Texas, in March 2020. The buyout is in line with Hormel Foods initiatives to strengthen its position in the restaurant industry.

McCormick has strategically increased its presence through acquisitions, which have strengthened its portfolio. In December 2020, McCormick purchased a 100% stake in FONA International, LLC and some of its subsidiaries. FONA’s diverse portfolio helps McCormick strengthen its value-added offerings and expand the flavor solutions segment into attractive categories. In November 2020, McCormick acquired the parent company of Cholula Hot Sauce, a premium hot sauce brand based in Mexico.

HRL and MKC are down 10% and 7%, respectively, over the past year. POST grew 6.5% during this period.

You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

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Hormel Foods Corporation (HRL): Free Stock Analysis Report

McCormick & Company, Incorporated (MKC): Free Stock Analysis Report

Post Holdings, Inc. (POST): Free Stock Analysis Report

The Kraft Heinz Company (KHC): Free Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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