Why You Might See More Discounts On Kraft Heinz Products Soon
As American consumers continue to feel the effects of inflation on their grocery bills, one major food company is taking steps to win back cost-conscious customers one promotion at a time. Kraft Heinz — the food juggernaut behind brands like Oscar Meyer, Philadelphia, Jell-O, Grey Poupon, and Capri-Sun — recently unveiled a plan to ramp up their coupon and promotion distribution after an initial reduction of deals during the pandemic due to increased grocery demand and supply chain issues (via Food Navigator).
The company hopes that by offering discounts on their popular name brand products it will be able to win back consumers that have switched over to more economical store brands in response to rising food prices. In a recent earnings call, the company — which recently increased product prices by 12.4% — announced a 2.3% drop in volume sold in the last quarter.
In recent months, an estimated 80% of major food companies have jacked up prices in order to pass the added costs of inflation onto consumers, so as to not impact their bottom lines, and Kraft is no exception (via Food Dive). Earlier this month, the U.K.-based grocery chain Tesco made headlines after refusing supplies of Kraft Heinz products due to the price increases on items like ketchup and canned soup, indicating that even grocery chains have reached their limit when it comes to skyrocketing food prices (via Barrons).
The food company recently increased prices by over 12%
However, the Chicago-based company now appears to be backpedaling slightly on the price increases with plans to unveil a variety of coupons and "mutually beneficial" promotions in order to counteract the rising costs and win back penny-pinching shoppers (via Food Navigator).
"We are mindful of the current inflationary environment and how it affects consumers," Kraft Heinz CEO, Miguel Patricio, said in an earnings call earlier this week. Although the CEO indicated that the recent steep 12.4% price increase on products would represent most of the planned increases for the remainder of the year, Patricio left the door open for further increases if needed.
To counteract those price hikes, Patricio said that the company hopes that "a robust assortment of effective promotions" will help maintain current customers and draw back some shoppers that have left the name brand fold. In addition to coupons, potential promotions include reduced-price product bundles, particularly around major holidays and events.
While it's unclear whether ramping up promotions will be enough to win back cost-conscious customers, one thing that is evident is that major food companies like Kraft Heinz, don't appear to be backing off of historic price hikes any time soon.