(Reuters) – Kraft Heinz Co replaced Chief Executive Officer Bernardo Hees with Anheuser-Busch InBev veteran Miguel Patricio, changing leadership after years of cost-cutting that has hurt some of its biggest brands.
FILE PHOTO: A Heinz Ketchup bottle sits between a box of Kraft macaroni and cheese and a bottle of Kraft Original Barbecue Sauce on a grocery store shelf in New York March 25, 2015. REUTERS/Brendan McDermid/File Photo
The announcement follows a cut in the company’s dividend payouts to investors after it wrote down the value of the Kraft and Oscar Mayer brand names and other assets by more than $15 billion in February.
It also faces a U.S. Securities and Exchange Commission probe into its accounting practices and market commentators applauded the move as a shift in strategy, pushing shares in the company up 1 percent.
In an interview published on Monday, the Wall Street Journal quoted Patricio as saying he planned to move the Heinz ketchup maker’s strategy in a new direction after a campaign of cuts which have weakened its brands in the fight for space on store shelves.
“It’s a new cycle for the company. I bring a very different background to the company and the team,” Patricio told the Journal.
Shares of Kraft Heinz have more than halved in value since two of the United States’ biggest food and beverage producers merged in 2015.
Patricio takes over the top job in July after spending two decades at Anheuser-Busch, most recently as the brewer’s global chief marketing officer.
Brazilian buyout fund 3G Capital, Kraft Heinz’s majority shareholder, is also a “meaningful” stakeholder in AB Inbev since 1989 through affiliates, according to its website.
3G and Warren Buffett’s Berkshire Hathaway Inc together own more than 50 percent of Kraft Heinz.
Prior to AB InBev, Patricio had also worked at a range of major consumer goods producers including Philip Morris, Coca-Cola Co and Johnson & Johnson.
“The change at the top of Kraft Heinz is a positive development,” said Roosevelt Investment Group fund manager Jason Benowitz, who previously held a stake in Kraft Heinz.
“It shows that management and the board understand the serious nature of the challenges facing the company. Kraft Heinz … cannot further cost cut its way to prosperity.”
Reporting by Uday Sampath in Bengaluru; Editing by Shailesh Kuber and Saumyadeb Chakrabarty