Dive Brief:
- Kraft Heinz is renovating Oscar Mayer after the packaged meat brand drove 60% of the food giant's North American market share losses in the first half of the year.
- CEO Steven Cahillane said last week at a Barclays conference in Boston that the company has upgraded packaging for deli fresh products, noting a resealability issue was "the vast majority of the problem."
- Oscar Mayer "lost a lot of distribution" at retailers due to issues within the brand, Cahillane said. He added Kraft Heinz is taking steps to earn back shoppers, including through potential reformulation to position the brand as less processed.
Dive Insight:
Kraft Heinz is pouring hundreds of millions of dollars into revitalizing its brands as Cahillane seeks to drive new growth and avoid a corporate breakup. Cahillane has previously described the need to turnaround meats and meals, saying the company is planning new price, product and packaging investments for Oscar Mayer.
"We know we have work to do clearly on the Oscar Mayer front, but the new packaging is in place and early signs are encouraging," Cahillane said in August. "And we want to plug that leaky bucket for sure."
The journey to revamp Oscar Mayer comes as Cahillane notes success in revitalizing other brands. Cahillane said at the Barclays event that Kraft Heinz ended the quarter with 35% of its business gaining share, up from 21% at the end of last year. The company is seeing a "trajectory change" in condiments, hydration and desserts, Cahillane said.
Kraft Heinz replaced packaging for Oscar Mayer at the beginning of August, with Cahillane noting that declines have since "lessened." As the company looks to rebuild its consumer base, it could do more with innovation to position the packaged meat brand as a more clean-label option and capitalize on growing demand for better-for-you foods.
"I think renovation in this day and age is incredibly important," Cahillane said. "Making Oscar less perceivably processed is not going to hurt the brand. It's going to help the brand."
The food giant has zeroed in on health trends for many of its other brands, introducing lactose-free Philadelphia cream cheese, Jell-O with no artificial colors or sweeteners and a high-protein version of its namesake macaroni and cheese.
