Kraft Heinz plans Indian ‘come-back’ through distribution partnership

INDIA – Kraft Heinz, which recently divested its Indian consumer brands business plans to take some of its global brands to India and this could be through a distributor partnership in the country.

Speaking to ET Retail, Kraft Heinz India managing director, Sankalp Potbhare said the company is exploring options including identifying a distribution partner in the country.

“We are exploring a few options for the same,” said Potbhare.

Kraft Heinz sold its consumer brand business in India to Zydus Wellness and its parent Cadila Healthcare for US$628 million.

The transaction included fast-growing consumer brands: children’s milk brand Complan, Glucon D, Nycil and Sampriti Ghee; and two manufacturing facilities in Aligarh and Sitarganj.

This left the company’s India arm only with Heinz ketchup brand and the re-entry may bring in other of its global brands.

Globally, Kraft Heinz has a portfolio of over 200 brands including Capri Sun juices, Maxwell House coffee and Jell-O cake mixes and desserts.

“India is an important market, and we will look at strengthening our brands in the long run,” Potbhare said.

“The recent sale of our niche business fits in with our overall global growth strategy and our focus on investing in and growing brands within our core categories.

We are betting big on the Indian market as it offers immense growth potential from a value and volume perspective.”

The company’s global chief executive had said that the sale to Zydus Wellness would enable strengthen its balance sheet.

“The value Kraft Heinz received from the asset sale of its consumer business in India is higher than what the company could have got doing the business here,” he said in earnings call.

The company’s third-quarter results reflected 1.6% increase in net sales to US$6.4 billion while organic sales increased 2.6% versus the year-ago period.

Comparable sales went up 2.6% in the quarter, which is the second quarter of growth since Kraft Heinz was created three years ago after both companies were merged in a deal worth US$49 billion.

United States net sales were US$4.4 billion, up 1.8% attributed to increase in-store activity, particularly in natural cheese and ready-to-drink beverages, as well as commodity-driven pricing actions in bacon.

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