A Tip for Heinz and Kraft.


The Kraft Heinz merger being orchestrated by 3G and Warren Buffet is a financier’s dream. Lot of money to work with. Kraft, a stalwart in the US. Heinz a global consumer goods company. A number of billion dollar brands to work with – brands like Kraft Macaroni and Cheese and Heinz Ketchup. Lots of room to make big topline money and big bottom line cost cuts.

The only downside we’re hearing about is the fact that processed foods, high in sugar, salt and other less than healthy additives, are supposedly under consumer attack. And those are the sweetspot of Kraft. Certainly we’re reading about Millennials trying to eat healthier. Darren Seifer, analyst at market research company NPD says this trend toward healthier eating will be slow in coming. The word he used was “tectonic.” I beg to differ. Consumption patterns, can change at the drop of a hat with good reasoning. Once we get the lobbying money out of the way, and consumers understand the health risks of carbonated soft drinks, high fructose corn syrup and processed food stuffs, consumption habits will change.

And then, to adapt, R&D will change leading to reformulations. Were I Warren Buffet or Jorge Paulo Lemann, I’d take some of my hard earned and invest it in next generation, healthier-for-you food products today. Look at the growth of Hain Celestial. Last I looked their portfolio was growing by double digits. Peace.