USA – Kraft Heinz, an American multinational food company, has reported a 7.1 percent decline in net sales in the fourth quarter of 2023, totaling over US$6.8 billion compared to US$7.3 billion in the same period the previous year.  

Despite a 3.7 percent increase in pricing, the company faced a 0.7 percent decrease in organic net sales, primarily attributed to a 4.4 percent decline in volume/mix. This decline in volume/mix was influenced by pricing actions and industry challenges, impacting both reportable segments. 

The full-year results, however, showed a different trend, with the company’s net sales increasing by 0.6 percent. The price increased by 8.9 percentage points compared to the previous year, driven by higher pricing to mitigate the impact of rising input costs. 

The gross profit margin also witnessed an increase of 280 basis points, reaching 33.5 percent. Adjusted EBITDA for the full year increased by 5.1 percent to US$6.3 billion, driven by higher pricing and efficiency gains. 

Kraft Heinz CEO Carlos Abrams-Rivera said: “I’m proud of the results we delivered in 2023 and the progress we’ve made as a company throughout the year. We delivered net sales growth across each of our key pillars, global food service, emerging markets, and US ‘Retail Grow’ platforms.  

We laid out action plans early in 2023 to drive market share and volume improvement – and they worked. We also executed well against our efficiency program, unlocking and powering it in large part with our tech-enabled Agile@Scale methodology.” 

However, Abrams-Rivera acknowledged headwinds faced by the industry in the fourth quarter due to ongoing consumer pressure. Looking ahead to 2024, he expects some of these pressures to dissipate, particularly as the reduction in Snap benefits is lapped. 

Despite the challenges, Abrams-Rivera expressed confidence in Kraft Heinz’s strategy, expecting continued growth in 2024. 

For the fiscal year 2024, Kraft Heinz anticipates organic net sales growth ranging from 0 to 2 percent compared to the prior year. The company expects a positive contribution from price throughout the year, with volumes inflecting positively in the second half. 

However, an unfavorable impact of approximately US$45 million within interest and other expenses/(income) is expected, primarily due to foreign currency headwinds and debt refinancing at a higher rate. 

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