H.J. Heinz Co. revamped its portfolio and committed another $100 million to marketing this year in an effort to boost sales three to four percent beginning in fiscal 2004.
Pittsburgh-based Heinz will buy a 75-percent stake in Del Monte Foods Co. and shelve a handful of Heinz pet food, tuna, and infant food brands with combined sales of $1.8 billion-20 percent of Heinz’s total-at the “new” Del Monte. The brands moving to San Francisco-based Del Monte are StarKist, 9-Lives, Kibbles ‘n Bits, Pup-Peroni, Snausages, Nawsomes, Heinz Nature’s Goodness baby food, and College Inn broths (as well as the private-label soup business.)
The move strengthens Del Monte’s center-store holdings, with two-thirds of its brands in the No. 1 position. The deal should close by early 2003.
That leaves Heinz with its meal enhancements brands (including flagship Heinz ketchup) and Meals and Snacks division, which will get a $100 million boost in marketing, especially for new products. Heinz says 44 percent of sales will be in the U.S., with 56 percent in foreign markets. The focus on core brands will make Heinz “a faster-growing, more focused, international food company,” says president-ceo William Johnson in a statement.
Joseph Jimenez, Jr. becomes exec vp and president-ceo of Heinz Europe July 1; he has been president of Heinz North America. (He replaces David Williams, who retires Sept. 1 after 35 years with Heinz.) Neil Harrison becomes exec vp and president-ceo of Heinz North America; he has been president of Heinz Frozen Foods.
Del Monte takes over one of Heinz’s Pittsburgh campuses and will run the new businesses from there; Del Monte headquarters remain in San Francisco. About 5,000 Heinz staffers (11 percent of total staff) transfer to Del Monte, with fewer than 100 jobs being eliminated in the U.S. and Canada.
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