Kraft Heinz Names Former A-B InBev CMO as Next CEO

Former Anheuser-Busch InBev chief marketing officer Miguel Patricio has been tapped to lead The Kraft Heinz Company as its next CEO.

Patricio, who will supplant outgoing Kraft Heinz CEO Bernardo Hees on July 1, 2019, spent about two decades with A-B InBev.

Over the last 14 years, Patricio held a variety of positions for the world’s largest beer company, including serving as zone president of Asia-Pacific as well as North America. Prior to that, he served as CMO of Ambev for five years.

“Miguel is a proven business leader with a distinguished track record of building iconic consumer brands around the globe, driving top-line revenue growth through a focus on consumer-first marketing, innovation, and people development,” Kraft Heinz chairman and 3G Capital CEO Alexandre Behring said via a press release.

Recall that Behring, a co-founder of 3G Capital — the global investment firm behind Restaurant Brands International (Burger King, Tim Hortons, Popeyes Louisiana Kitchen) and Kraft Heinz’s second-largest shareholder – departed A-B’s board last month.

Hees had served as CEO of Kraft Heinz since June 2013. He is also a partner in 3G, though he will no longer be involved in the day-to-day operations of the international food conglomerate.

“It has been an honor to serve as CEO of Kraft Heinz and to see it through its transformation over the last six years,” Hees said via the release. “I have confidence that Miguel and the team will take Kraft Heinz to new heights.”

Nevertheless, his departure means that a member of 3G Capital, famous for its aggressive cost-cutting measures and “zero-based budgeting” strategy, will no longer be calling the shots.

According to CNBC, Patricio intends to improve the company’s “speed, organic growth, [and] brand building” capabilities.

“We need to lead, not follow,” he told the outlet.

Formed in 2015 by 3G and Berkshire Hathaway via the merger of H.J. Heinz and Kraft Foods, the company’s stock (NASDAQ: KHC) has plummeted from about $80 per share in 2015 to $32.90 after today’s close.

In recent months, the troubled Kraft Heinz slashed its dividend, announced a $15.4 billion write-down on its brands, and said the SEC was investigating its accounting practices.

Those moves have caused many to question the effectiveness of zero-based budgeting.

With Patricio at the helm, however, it’s possible the company could once again begin spending on initiatives aimed at stoking growth.

“It will be a privilege and an honor to lead such a talented group of employees as we focus on the consumer to capitalize on the growth opportunities that exist in the rapidly evolving food industry,” he said via a release.

A press release with additional quotes is below.

PITTSBURGH & CHICAGO –(BUSINESS WIRE) — The Kraft Heinz Company (NASDAQ:KHC) today announced that the Company’s Board of Directors has appointed Miguel Patricio as Chief Executive Officer effective July 1, 2019. Mr. Patricio will succeed Bernardo Hees, who will remain CEO through June 30, 2019, to ensure a seamless transition.

“Miguel is a proven business leader with a distinguished track record of building iconic consumer brands around the globe, driving top-line revenue growth through a focus on consumer-first marketing, innovation, and people development,” said Alex Behring, Chairman of Kraft Heinz’s Board of Directors.

“I want to personally thank Bernardo Hees for leading the Company through its first phase,” said Marcel Herrmann Telles, a member of Kraft Heinz’s Board of Directors. “I’ve worked with Miguel over the course of the past 20 years, and he is a natural business leader. From attracting and nurturing the best talent to leading the turnaround of the AB InBev China business into the phenomenal success it is today, Miguel has one of the best brand-building minds in the industry.”

A native of Portugal, Mr. Patricio will join the Company after a successful career spanning two decades at Anheuser-Busch InBev (AB InBev), where he served as part of the Executive Leadership team in various positions, driving organic growth and industry-leading margins.

At AB InBev, Mr. Patricio served as the Global Chief Marketing Officer from 2012 to 2018. In this role, he helped develop and implement a strategic playbook for global brands Corona, Budweiser and Stella Artois, accelerating organic sales growth to high single digits. This represented more than one-third of AB InBev’s organic growth and accounted for more than 20 percent of AB InBev’s 2018 year-end global revenues. In his final year as chief marketer, AB InBev was the most awarded brand owner at Cannes Lions 2018, the global benchmark for effective creative marketing communications.

Prior to that, he was AB InBev’s President of Asia Pacific from 2008 to 2012 and President of North America from 2006 to 2008, providing him with deep experience in growing businesses in developed and emerging markets.

As President of Asia Pacific, Mr. Patricio set the foundation for the growth of the China business by defining a long-term strategy focusing on the premium market, growing Budweiser to become the leading brand in China, and expanding the growth of local brands such as Harbin. This led to the transformation of AB InBev Asia Pacific, which grew from revenues of $1 billion in 2008 to $2.7 billion in 2012, making it the number one beer company in China. Asia Pacific now represents approximately 15 percent of the company’s global revenue and 18 percent of global volumes.

Prior to AB InBev, Mr. Patricio has worked at other consumer companies including Philip Morris, The Coca-Cola Company and Johnson & Johnson in Latin America, New Jersey, and Georgia.

“Kraft Heinz is an incredible company with iconic brands that are loved around the world,” Mr. Patricio said. “It will be a privilege and an honor to lead such a talented group of employees as we focus on the consumer to capitalize on the growth opportunities that exist in the rapidly evolving food industry.”

“I would like to thank Bernardo personally, and on behalf of the Board, for his many contributions to Kraft Heinz over the last six years,” Mr. Behring added. “He helped transform the food industry by leading the acquisition of Heinz in 2013 and the merger of Kraft and Heinz in 2015. Under Bernardo’s tenure, Kraft Heinz achieved industry-leading margins and sales performance in line with its U.S. peers, developed an organization with best-in-industry quality standards, and built in-house capabilities for category management, including revenue and assortment management. We appreciate his contributions.”

“It has been an honor to serve as CEO of Kraft Heinz and to see it through its transformation over the last six years,” said Mr. Hees. “I have confidence that Miguel and the team will take Kraft Heinz to new heights.”

ABOUT THE KRAFT HEINZ COMPANY

For 150 years, we have produced some of the world’s most beloved products at The Kraft Heinz Company (NASDAQ:KHC). Our Vision is To Be the Best Food Company, Growing a Better World. We are one of the largest global food and beverage companies, with 2018 net sales of approximately $26 billion. Our portfolio is a diverse mix of iconic and emerging brands. As the guardians of these brands and the creators of innovative new products, we are dedicated to the sustainable health of our people and our planet. To learn more, visit http://www.kraftheinzcompany.com/ or follow us on LinkedIn and Twitter.

Forward-Looking Statements

This press release contains a number of forward-looking statements. Words such as “plan,” “invest,” “grow,” “support,” “work,” “aim,” “accelerate,” “leverage,” “will,” “take,” “focus,” “capitalize,” “confident,” and variations of such words and similar future or conditional expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding Kraft Heinz’s investments and growth plans. These forward-looking statements are not guarantees of future performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond Kraft Heinz’s control.

Important factors that may affect Kraft Heinz’s business and operations and that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, operating in a highly competitive industry; Kraft Heinz’s ability to predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation; changes in the retail landscape or the loss of key retail customers; changes in relationships with significant customers or suppliers; Kraft Heinz’s ability to maintain, extend, and expand its reputation and brand image; Kraft Heinz’s ability to leverage its brand value to compete against private label products; Kraft Heinz’s ability to drive revenue growth in its key product categories, increase its market share, or add products that are in faster-growing and more profitable categories; product recalls or product liability claims; unanticipated business disruptions; Kraft Heinz’s ability to identify, complete, or realize the benefits from strategic acquisitions, alliances, divestitures, joint ventures, or other investments; Kraft Heinz’s ability to realize the anticipated benefits from prior or future streamlining actions to reduce fixed costs, simplify or improve processes, and improve its competitiveness; the execution of Kraft Heinz’s international strategic initiatives; the impacts of Kraft Heinz’s international operations; economic and political conditions in the United States and in various other nations in which Kraft Heinz does business; changes in Kraft Heinz’s management team or other key personnel and Kraft Heinz’s ability to hire or retain key personnel or a highly skilled and diverse global workforce; risks associated with information technology and systems, including service interruptions, misappropriation of data, or breaches of security; impacts of natural events in the locations in which Kraft Heinz or its customers, suppliers, distributors, or regulators operate; Kraft Heinz’s ownership structure; Kraft Heinz’s indebtedness and ability to pay such indebtedness; an impairment of the carrying value of goodwill or other indefinite-lived intangible assets; exchange rate fluctuations; volatility in commodity, energy, and other input costs; volatility in the market value of all or a portion of the derivatives we use; increased pension, labor and people-related expenses; compliance with laws, regulations, and related interpretations and related legal claims or other regulatory enforcement actions; Kraft Heinz’s ability to protect intellectual property rights; tax law changes or interpretations; the impact of future sales of Kraft Heinz’s common stock in the public markets; Kraft Heinz’s ability to continue to pay a regular dividend and the amounts of any such dividends; volatility of capital markets and other macroeconomic factors; and other factors. For additional information on these and other factors that could affect Kraft Heinz’s forward-looking statements, see Kraft Heinz’s risk factors, as they may be amended from time to time, set forth in its filings with the Securities and Exchange Commission. Kraft Heinz disclaims and does not undertake any obligation to update or revise any forward-looking statement in this press release, except as required by applicable law or regulation.

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