When Steve Cahillan was named CEO of Kraft Heinz, the task was clear – break the company in two. But within just six weeks he reversed that decision. He explained to the board, called Warren Buffett’s successor, Greg Abel, and said, ‘This company can be fine, no need to break up.’ This was not a small decision. Declining sales for 9 consecutive quarters, falling stock and consumers moving towards cheaper brands, everything was against Kraft Heinz. Decades-old brands like Oscar Mayer, Philadelphia Creech Cheese, Jell-O, Kool-Aid are recognizable, but as Cahillen himself says, ‘People want to buy T-shirts, not products. We have to sell both. Cahillane, 60, is a veteran of the food industry. Earlier he had divided the Kellogg company into two parts. The snacks segment became Kelanova and Mars bought it for $36 billion (Rs 3.4 lakh crore as of now). That means he had the experience of breaking a company, but this time he did not do what was expected of him. His logic was simple – if it was broken now, both parts would turn out to be weak. First strengthen the company, then options will remain open. The challenges are not less. Weight loss drugs have changed the eating habits of people. There is a political debate in America on ‘ultra-processed food’. Oil prices are rising due to the Iran war, which may affect the supply chain. Cahillan believes that in the last 10 years the company has ignored consumers and focused only on profits. This was the biggest mistake. But Cahillane seems confident. 35,000 employees have been given new direction. Research teams are working on protein-rich alternatives. The process of removing artificial colors and materials was already underway. Cahillane’s mother was from Ireland and had a college degree while raising four children. Perhaps he has inherited this stubbornness. Warren Buffet merged Heinz and Kraft Foods in 2015. Kraft Heinz is the fifth largest food and beverage company in the world. Warren Buffett’s firm Berkshire Hathaway and investment firm 3G Capital merged Heinz and Kraft Foods in 2015. The company has dozens of brands in its portfolio, including Oscar Mayer, Philadelphia Creep Cheese, Jell-O, Kool-Aid, Capri Sun and Heinz Ketchup. The company has 35,000 employees worldwide and is headquartered in Chicago. Greg Abel, now CEO of Berkshire Hathaway, also took over the new responsibility along with Cahillane on January 1.
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The company forgot its customers in the pursuit of profits: Instead of breaking up Kraft Heinz, the new CEO Cahillen will improve it; Emphasis on customer health
