Kraft Heinz to ride wave of demand for quality foods

Kraft Heinz Co, a food and beverage giant from the United States, is localizing innovations and expanding its product offerings to penetrate China's condiment market.

China, which commands a $40 billion market in sauces and condiments, figures among the company's top priorities as consumers are displaying a passion for good-quality, healthy foods, and wellness, especially since the COVID-19 pandemic, said Rodrigo Wickbold, president of Kraft Heinz Asia.

"To me, what's more important (than the sheer size of the market) is that China is a country of food lovers. People have a relationship with, and a connection to, food, which is unlike in many other places."

For Kraft Heinz－global net sales: about $26 billion in 2020－China is offering great opportunities to grow its food business exponentially, said Wickbold, who relocated to China from Singapore last year to set up the company's Asia headquarters.

A recent report from research firm Mintel showed that in-home consumption of sauces, seasonings and spreads rose during the pandemic because more urban people started cooking at home as lockdowns and social distancing became the norm.

Although cooking frequency fell after restaurants reopened, most consumers still find home cooking to be healthier, driving demand for products that Kraft Heinz sells.

Demand for condiments is expected to rise steadily in the next 12 months, according to the Mintel report released in December.

Kraft Heinz, which is building a database of recipes, has plans to tap into that demand by encouraging people to experiment different types of cooking at home.

"We have strong plans to inspire people to cook through our products as well as content," said Wickbold.

The company has launched recipes for Western food, including videos showing an easier way of using ingredients found at regular supermarkets.

The company will also support chefs at restaurants with new recipe ideas and new products.

Last year, the company, which also owns Chinese brands Master and Guanghe, has invested $100 million in a new factory in Yangjiang, Guangdong province, to boost capacity for Chinese sauces.

The two brands, currently popular in Guangdong and Fujian provinces, are slated to go national.

At the same time, Wickbold said the company is tapping all cooking trends in China to extend its offerings by providing a wider range of Chinese sauces that chefs use in the kitchen.

"In the next two years, I think we're going to transform our portfolio offering a range of products," he said.

"Premium and better-for-you condiments will have more room to expand," said Xu Ruyi, head of reports, North Asia, at Mintel.

"E-commerce and community-based commerce will add a new dimension to the category."

Kraft Heinz plans to double down on investments on e-commerce, especially in infant foods and cereals, and expects to scale up its sauces business.

"Consumers still are not used to buying sauces via e-commerce …but the segment is still growing in double digits" ever since COVID-19 has been brought under better control in China, he said.

In China, Western sauces penetration is still relatively low at 40 percent. He said the company's Western sauce products, already present nationwide, need to deepen penetration into more households.

This year, the company is investing more to expand production capacity for its Western tomato sauces and ketchups by building more production lines and "hopefully, we'll set up new factories in the coming years", he said.