Kraft Heinz (NASDAQ:KHC) Chief Executive Officer Steve Cahillane said the company is seeing early evidence that its increased brand investment is improving consumption and market-share trends, though he emphasized that performance has not yet reached acceptable levels.
Speaking at a fireside chat, Cahillane said the company initially announced a $600 million reinvestment program focused on brands, capabilities and marketing, then increased that amount to $700 million after encouraging first-half results. The company had ended the prior year with 21% of its business holding or gaining share, a figure that has risen to 35%, according to Cahillane.
Early gains in condiments, emerging markets and foodservice
Cahillane pointed to a reversal in North American Heinz condiment trends as an example of the impact of investment. Heinz brand consumption declined 3% last year, but is now up 3% and gaining share, he said. The company has also seen improving trajectories in hydration and desserts, while 90% of its portfolio has a better trend than it did in 2025.
Global Away From Home sales have returned to 3% growth, with U.S. growth running somewhat higher, Cahillane said. In U.S. foodservice, the company is gaining share in tomato ketchup and mayonnaise, helped by customer wins and its effort to expand Heinz’s presence beyond ketchup through a program called Heinz Verified.
Emerging markets have also become a major source of growth. Cahillane said the segment is growing at a high-single-digit rate and gaining share in every market where the company operates except Indonesia, where it had distributor challenges last year.
In Brazil, Heinz Zero launched early in the year and has delivered 80% incrementality, Cahillane said. He also noted that Heinz has 96% worldwide awareness and 20% household penetration, compared with 94% awareness and 50% penetration for Coca-Cola. Kraft Heinz is increasing quality distribution for Heinz products at a 5% rate in the first half, he added.
Cahillane said he sees “years and years” of potential high-single-digit to low-double-digit growth in emerging markets.
Oscar Mayer remains a key U.S. challenge
Despite broad portfolio improvement, Cahillane identified Oscar Mayer as a significant remaining issue. He said 60% of Kraft Heinz’s share losses in the first half were tied to Oscar Mayer, primarily its Deli Fresh product line.
The company identified a resealability issue with Deli Fresh packaging and introduced new packaging that began shipping in early August. While distribution was lost during the problem period, sales per point of distribution are now growing, according to Cahillane.
“We had a resealability issue. We did not do the job for the consumer and the retailer that we needed to do,” Cahillane said. He added that the company must regain distribution and continue to build consumer trial.
Frozen foods also represent an area for improvement, he said. Beyond fixing underperforming businesses, Kraft Heinz plans to focus on larger brands and selected smaller “gems,” including Lea & Perrins, A.1. Sauce and Grey Poupon.
Innovation and renovation focus on nutrition, convenience and value
Cahillane pushed back on the view that legacy food brands have become inherently less relevant. He said brands can remain vibrant when companies invest in innovation that meets changing consumer preferences.
Examples cited included resealable bottles and Capri Sun Hydrate, Heinz Zero and Heinz Simply products, lactose-free Philadelphia Cream Cheese, and Kraft PowerMac & Cheese. The PowerMac product contains 17 grams of protein and 6 grams of fiber, he said.
The company is also pursuing product renovation, including a previously stated goal to remove all FD&C artificial colors by the end of 2027. Cahillane said consumers increasingly want cleaner labels, protein, fiber, affordability and convenience.
Kraft Heinz has also begun activating a new NFL partnership. Cahillane said the company’s in-store displays were up 150% from the same four-week period a year earlier, which he attributed in part to the NFL activation.
Productivity, cash flow and capital priorities
Executive Vice President and Global CFO Andre Maciel said the company expects productivity to be its primary tool for supporting gross-margin expansion amid inflation. Kraft Heinz has generated productivity of more than 3.5% of cost of goods sold for five years, including more than 4% in each of the past three years, he said.
Maciel said the company recently completed an exercise to identify opportunities to raise productivity to roughly 4.5% of cost of goods sold. Pricing may be used selectively if needed, while favorable product mix from higher-margin brands and categories could also support margins.
On capital allocation, Maciel said Kraft Heinz’s free cash flow after dividends has remained strong despite the reinvestment program. The company has paid down $2.9 billion of debt this year, including $1 billion that had been scheduled to mature the following year. It also refinanced $1 billion of more expensive debt, a move expected to save $250 million in interest expense over 10 years.
Cahillane said investors should evaluate the turnaround through market-share progress, productivity, innovation and distribution gains, sustained emerging-market growth, and stable share growth in international developed markets. The company plans to provide additional perspective on 2027 and beyond at its investor day in November.
About Kraft Heinz (NASDAQ:KHC)
The Kraft Heinz Company (NASDAQ: KHC) is a global food and beverage company that develops, manufactures and markets branded products for consumers, retailers, foodservice operators and other customers. Its portfolio includes condiments and sauces, cheese and dairy products, meals, meats, beverages, snacks and other packaged foods.
The company’s well-known brands include Kraft, Heinz, Oscar Mayer, Philadelphia, Velveeta, Lunchables, Capri Sun, Jell-O, Maxwell House and Classico, among others.
