Kraft Heinz has posted net sales of $6.16 billion in its first-quarter, representing 6.2% organic growth as a result of increased consumer demand related to Covid-19.
The Lunchables and Philadelphia cream cheese owner was positively impacted by growth in at-home consumption and strong demand for its leading brands, particularly in developed markets.
Positive performance was partially offset by the continual lower demand in natural cheese and cold cuts, as well as coronavirus impact on its domestic foodservice sector.
Nevertheless, Kraft’s positive Q1 results follow a series of net sale declines in financial announcements and an overall ‘disappointing 2019’.
Net income attributable to common shareholders decreased 6.7% to $378 million, predominantly due to an unfavourable comparison with the gain on the sale of a range of India nutritional beverages in the prior year period.
In the US, net sales were up 6.4% from last year to $4.5 billion as retail consumption accelerated across all categories in March. Strong growth was particularly seen in macaroni and cheese, condiments and sauces, ready to drink beverages, and nuts.
In the three months to 28 March, the company’s international segment saw net sales increase organically by 6.9% to $1.3 billion with concentrated retail growth in the UK, Australia, New Zealand and Russia.
The divestiture of Kraft’s Canadian natural cheese business caused the company’s Canada net sales to decline 19.8%, however its organic net sales increased 2.2% due to increased consumer demand.
In its Canadian market, volume increased 8.6% with greater demand primarily in Kraft Dinner, Classico pasta sauce, and Kraft peanut butter which more than offset declines in coffee mainly from the exit of the McCafé licensing agreement.
Kraft Heinz CEO Miguel Patricio said: “Our first quarter results reflect how strongly our employees have responded to the global Covid-19 challenge and the exceptional level of service our teams have demonstrated during this critical time; and for that, it is an incredible privilege to be part of the Kraft Heinz Company.
“The transformation work we kicked off last year, together with the flexibility, agility, and creativity of our people, and the tremendous collaboration with our retail customers, are all coming together. Going forward, we have a singular focus: to meet the demand for our products and ensure consumers have the food and nourishment they need during these uncertain times.”
While the company says the impact of the pandemic on its full-year results remains uncertain, it has forecast low to mid-single digit organic net sales growth for its second quarter.
© FoodBev Media Ltd 2020