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Last month’s announcement that Kraft Foods Group and H.J. Heinz Co. will merge to form the Kraft Heinz Company made headlines and left many food brands, grocery retailers and consumers wondering what impact it will have on the aisles of their grocery stores.
The combination will make Kraft and Heinz a powerhouse company with a presence in nearly every section of the grocery store. In fact, many popular Kraft and Heinz brands are complementary products, which will create greater synergy on store shelves, demonstrating that the whole is greater than the simple sum of its parts. Moreover, with an increasing number of brands under the Kraft Heinz umbrella, there will be even more opportunities to offer new food choices for consumers.
Heinz and Kraft are each purveyors of some of the most beloved brands in grocery retail. Heinz has its iconic ketchup, as well as its range of Classico sauces, Ore-Ida frozen potatoes and Bagel Bites. Equally as beloved are some of Kraft’s favorite brands, including its Macaroni & Cheese, Oscar Mayer meats, Philadelphia cream cheeses and Cool Whip dessert toppings. Together, all of these hero brands command deep consumer loyalty across almost every aisle. Talk about immeasurable brand value.
Over the years, both companies have created and established deep and meaningful brand equity that will help further elevate the new Kraft Heinz enterprise into an enviable and stronger competitive position with greater critical mass. The united companies will likely also enjoy increased economies of scale and other cost savings, in addition to the prospect of exciting new possibilities for consumers and grocery retailers. A few examples include: 1) co-brand “mash-ups,” 2) shared best practices, and 3) the advantage of a bigger and better partner for licensed and retail relationships.