Sustained price increases are making consumers turn away from A-brands to cheaper private labels more often. Kraft Heinz is the next in line to feel the effects: while sales are still (slightly) increasing, volumes are under pressure.
Price-conscious consumers
Kraft Heinz disappointed with its quarterly results: turnover grew by 2.6 % to 6.7 billion dollars (6 billion euros), below analysts’ expectations. Most worryingly, volumes fell 7 % as more and more consumers no longer readily accept the persistent inflation: they are becoming more price-conscious and swap expensive branded products for cheaper private brands – even when it comes to a strong brand like Heinz.
Nevertheless, the company expects improvement in the second half of the year: “The action plans we laid out in the first quarter resulted in share trend improvement each month”, CEO Miguel Patricio said. The multinational therefore maintains its previous outlook, with an expected growth of 4 to 6 % for both revenue and operating profit.
