13 August 2008 – H. J. Heinz's 2008 sales rose 12%, overtaking the ten billion dollar mark for the first time. This performance was driven mostly by growing success in emerging markets and the introduction of new products, many of them in the health and wellness segment, according to Heinz Chairman, President and CEO William R. Johnson.
Heinz is “off to a good start” in the first quarter of fiscal 2009, Mr Johnson said in a speech at the company’s annual shareholders’ meeting, adding that results would be released later this month. Mr Johnson also unveiled the company’s “High Performance Plan” for the next two years. Targets include 6%+ annual sales growth and 6-7% growth in operating income.
Heinz’s top 15 brands, which account for around 70% of total sales, enjoyed a compound annual growth rate of 12% in 2008. The company’s CEO attributed this success to sustained investments in R&D and marketing and cited plastic snap pot beans (UK) and Smart Ones ® Fruit Inspirations as examples of successful R&D and marketing. Mr Johnson forecasts more of the same for 2009: “We had a busy year of product launches for the brand in Fiscal 2008, with another on tap for Fiscal 2009.”
Mr Johnson highlighted the importance of Heinz’s “health and wellness” brands, such as Weight Watchers® and Smart Ones®, which together represent almost $1 billion in sales and are amongst the company’s fastest growing brands.
The healthy lifestyle segment is a fast-growing one, but emerging markets may represent an even bigger opportunity. Sales in countries such as China and India “are expected to contribute about a third of the company’s total sales growth over the next two years,” forecasted Mr Johnson. Sales in emerging countries accounted for 13% of Heinz's total sales in 2008 but are expected to grow to 15% by the end of 2010 and 20% by 2013, he added.
Though Mr Johnson did not mention specific acquisition targets, he acknowledged that there were “abundant opportunities to explore in both the developed and developing world” and that the company would be after “value-added acquisitions.” Heinz recently announced the acquisition of French sauce manufacturer Benedicta, as reported on FLEXNEWS.
