Food manufacturing conglomerate Kraft Heinz reported its 2021 fourth quarter and full-year financial results on Feb. 16, with the results showing a major year-long earnings rebound after a downtrodden 2020, while the fourth quarter had considerable regression in both sales and profits amid supply chain headaches.
Chicago-based Kraft Heinz posted total 2021 sales of $26 billion, nearly identical to 2020, while net profit of $1 billion skyrocketed 184 percent, benefitted by 2020 divestitures and favorable foreign exchange rates.
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But Q4 was a different story. October-December sales of $6.7 billion were down 3.3 percent year-over-year — with a 6.8 percent decline in the U.S. far outweighing modest growth in Canada and International — and the company took a net loss of $257 million that was primarily due to a $1.3 billion impairment charge tied to the divestiture of its natural cheese business to Lactalis Group.
Other issues plagued Q4 besides the impairment charge, however. In Kraft Heinz' Q4 earnings call, North America business leader Carlos Abrams-Rivera noted one-time supply challenges during the quarter, production constraints and certain product categories and brands (not named) that are overdue for a new go-to-market strategy. Shortages of packaging materials and labor hurt the company's Philadelphia Cream Cheese and Oscar Mayer brands, though both are expected to bounce back in Q1 2022. Elsewhere, production limitations hindered the company's Heinz gravy and Lunchables brands, and Abrams-Rivera noted those issues should be actioned by the end of Q2.
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“Frankly, our 2021 share performance was not where it needs to be,” Abrams-Rivera told analysts. “We saw strong share performances in iconic brands such as Heinz ketchup, Kraft Singles, Velveeta, Mio and Capri Sun, we lost share in other parts of the portfolio. That’s the bad news. The good news is that we know what needs to be fixed, and how to go about fixing it.”
Going forward, Kraft Heinz said it is expecting full year organic sales growth of 1 to 2 percent, after 1.8 percent growth in 2021.