2011 Processor of the Year: H.J. Heinz Co.

While keeping ketchup at the forefront, this 142-year-old company keeps reinventing itself, domestically and around the world.

By Dave Fusaro, Editor in Chief

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In Canada, Heinz also competes in chilled foods such as salad dressings, compliments of the Renee's Gourmet Foods acquisition of 2006. That kind of product line could be imported to the U.S. at any time.

"We have a very aggressive innovation plan," says O'Hara. "We're building a three-year R&D pipeline of new products to launch."

Acquisitions and spinoffs
All that acquisitive growth, both foreign and domestic, can't help but unfocus a company. In defining Heinz 2011, just as important as international growth are a number of transformational events for the company.

Johnson lists as a turning point the Ore-Ida acquisition of 1965, probably the company's first acquisition of a top-tier brand, one that was outside of Heinz's comfort zone but one that provided it with a platform for growth. Then a self-assessment in 1995-1996 that overhauled the supply chain and overhead structure.

"In addition to substantially reducing costs, it confirmed our interest in emerging markets and shone a light on categories where the company should focus," Johnson says.

What naturally followed was the portfolio realignment that resulted when businesses representing about $1.8 billion in sales were sold to Del Monte in 2002. Through acquisitions and internal growth, a frozen business gained critical mass. By about 2005, a new and refocused Heinz had taken shape.

That same year, the Heinz Global Innovation and Quality Center – believe it or not, the first central R&D center in the company's history -- opened in suburban Pittsburgh (more on that in the following story). The company is currently building one in Netherlands, and one is planned for China in two years.

Much of the direction of this company has been charted by strong chairmen/CEOs. Heinz has had a history of long-serving and strong leaders at the top, with the same person usually having both those titles.

The company history trumpets R. Burt Gookin, president/CEO 1966-1979, as moving Heinz "to the No. 1 spot in investment appreciation among its U.S. peers." Since then, delivering exceptional financial results has been a Heinz hallmark.

Tony O'Reilly -- Sir Anthony Joseph Francis O'Reilly, Ph.D. -- a native of Ireland and a former rugby star, was at the helm 1979-1998, during a time of acquisitions and global expansion. Regarded as high-profile, flamboyant and worldly, he was the first non-Heinz family member to become chairman.
Johnson joined Heinz in 1982 as general manager of new businesses for Heinz USA. At one point, he was CEO of Heinz Pet Products and then added Star-Kist. He took over as president/CEO in 1998, and was named chairman two years later. He's only the fifth chairman and sixth CEO in Heinz's 142-year history.

While maintaining overall growth, he focused the company on its current core categories and presided over some divestitures, foremost being the StarKist, pet foods, U.S. baby food and private label soup businesses sold to Del Monte Foods in 2002.

In addition to the acquisition in Indonesia, Johnson says another transformational event was the purchase of Russia's Petrosoyuz, a maker of ketchup, condiments and sauces, in 2005. "We had a small baby food business in Russia, and we were trying to bring our ketchup in [from European factories], but all the duties made it too pricey. Petrosoyuz gave us instant infrastructure across Russia's many time zones and expanded our reach. It came with a number of brands, which we eventually successfully rebranded as Heinz. Today we have a quarter-billion-dollar business there, most of it under the Heinz brand. This gave us confidence that [in some situations] we could change the local brand to the Heinz brand."

And today Heinz is the No. 1 brand of ketchup in Russia — as it is in seven of the world's top 10 ketchup markets.

When asked what Heinz still needs to improve upon, Johnson mentioned the transfer of ideas from unit to unit within the company. With as far-flung an empire as Heinz, it's difficult to keep everyone aware of successes and best practices halfway around the globe, to keep everyone connected as one family. "We're light years ahead of where we were a decade or so ago, but we still have a long ways to go," he says.

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