Yahoo Finance’s Brian Sozzi and Alexis Christoforous speak with Kraft Heinz U.S. President Carlos Abrams-Rivera about the company’s latest earnings report, and future outlook.
ALEXIS CHRISTOFOROUS: Although big grocery hauls have declined since the start of the COVID-19 pandemic, a recent surge in cases may be drawing consumers back to the food aisles. Kraft Heinz beat on earnings and revenue and saw an acceleration of grocery sales in the second half of September. Joining us now to discuss is Kraft Heinz US President Carlos Abrams-Rivera. Carlos, good to see you.
You know, there was a survey done this week. A lot of folks, more than half the respondents, said they're going to start stockpiling those paper goods, things like toilet paper and paper towels, which we all couldn't get our hands on back in March. What are you seeing in terms of demand for Kraft Heinz products?
CARLOS ABRAMS-RIVERA: Well, first of all, thank you for having me here today. Listen, I think that well so far what we're seeing is that our-- actually supply network in food actually are feeling much, much better than we did at the beginning of the pandemic. So at Kraft Heinz we actually, if you look at the overall network, the investments we have made to drive more capacity, the things that we have done to actually spend the number of network with more code packers, are actually giving us fuel for our continued performance.
So Q3 shows that we continue to perform and increase market share through the quarter, and as we see it here today, we feel that we can actually service our customers very, very well. So, you know-- now we are continuing to invest. We're not stopping, but I think the, you know, debt situation or having the concerns, I don't-- I don't see it today as much in our company.
BRIAN SOZZI: I'm hearing from a lot of food executives that affordability in stores or-- and with packaged goods is now becoming a pretty major problem. Talk to us about why that's happening.
CARLOS ABRAMS-RIVERA: You know, I guess what I will say in terms of affordability is that I think consumers are looking for just great value, and I think the way I think about it and at Kraft Heinz is that, you know, we're looking to make sure we're using revenue management in all those tools. So you're going to see us work in new operating price points. At the same time, we're also introducing more larger packs so that people have the range of how they actually are going to look for those kind of different price points and increase value.
The second thing that we're seeing in terms of the equation of affordability is also looking for taste and quality. So in fact, right now what we're seeing is that consumers are making the choices to say, I want to make sure it's something that I know I can depend on, that I know that if I bring it home I'm going to be able to please my entire family. That is actually part of the value equation that consumers are seeing.
And in fact-- I give you a fact, which is today when we talk to consumers, they tell us that 2/3 of them actually prefer trusted brands that they have-- rather than what they have seen in the past. So more and more consumers are thinking as, you know, I need to make sure I provide value for my family, but I'm going to do it with people that I trust, the brands that I know my family will enjoy, and we are offering different price points for them to be able to enjoy it as well.
ALEXIS CHRISTOFOROUS: Carlos, what about the way you are maybe reimagining some of your products during this pandemic, especially because a lot of our buying habits have changed? We're seeing demand for snacks go through the roof. What are you doing in terms of reinventing or reimagining products?
CARLOS ABRAMS-RIVERA: Well, I guess I should start with the fact that we've been reinventing the entire company. So over the last, you know, several months now, we've gone through the humongous transformation at Kraft Heinz in which we actually focused on how do we focus on people differently by us reorganizing the organization, how do we actually drive a different thinking to our platforms. So we went from looking at about 55 categories to just thinking about six consumer platforms.
And we also internally changed how we think about operations so that we can drive more efficiency to reinvest in the business. And then lastly, we actually focused on how we change our collaboration with our customers too so that we can better service our retailers. So there is a transformation happening. I think we often went through that transformation ourselves.
Now to your point about the actual brands, what we've been doing is continue to bring renovation to our products. So what you see is that as consumers are looking for new different things and they're looking, rather than those trying to come up with a bunch of small innovations, is how do we bring those consumer needs into our icon brands, whether that is how do we continue to improve things like Oscar Mayer, simplify the ingredients? How do we make sure we continue to drive, you know, better-- better benefits from things like ketchup?
Because we know, for example, that consumers are-- they're looking for now burgers. It may be a plant-based or it may be a beef burger, but we do know that they're going to put ketchup in there. So we are actually making sure that our icons like Heinz actually has the opportunity to bring different solutions in whoever needs it in whatever the way they're going to be eating their products. So that is part of how we are rethinking our way of us kind of keeping our brand fresh and answering consumer needs at this time.
ALEXIS CHRISTOFOROUS: All right. Kraft Heinz US President Carlos Abrams-Rivera, thanks for being with us.
CARLOS ABRAMS-RIVERA: My pleasure, and I hope everything goes well for you in the weekend. Enjoy it.
ALEXIS CHRISTOFOROUS: Ah, thanks. You too.