Kraft Heinz taps ‘penetration machine’

Getting Lunchables, its prepackaged meal kit, into school cafeterias would not only tap a potential $25bn market but also help drive retail sales, according to Kraft Heinz CEO-in-waiting Carlos Abrams-Rivera. 

“The kids have it and then they go to retail and they see it. [It’s] a penetration machine,” he said in remarks reported by the Wall Street Journal.

What’s happening? 

• Kraft Heinz is looking to grow its foodservice business (which accounts for 9% of North American sales) twice as fast as its retail (66% of sales) and has identified schools as an important element of that.
• It has adapted the recipes of two Lunchables varieties in order to comply with current federal school-lunch guidelines and make them more nutritious.
• The federal government has proposed new rules that would require schools to reduce the amount of sugar and salt in meals served to children. 

Why school lunches matter

It’s a smart strategy to build awareness and consumption among a new generation of consumers, but not everyone is enthusiastic about the presence of branded, processed foods on school menus. “We have sold out our kids for Kraft to build market share,” said one mother. 

While that perception may put some buyers off the particular brand and possibly Kraft Heinz’s wider portfolio, the reality is that Lunchables have been around for 35 years, are a popular home meal choice and provide a useful option for cash-strapped and understaffed school cafeterias.

A UK perspective 

An enterprising broadcaster might follow the example of Channel 4 in the UK, which created one of the most-talked about TV shows of 2005 when TV chef Jamie Oliver took aim at the presence of things like turkey twizzlers on school menus and campaigned for better quality food for the nation’s children.

That not only brought the TV channel a net conventional ROI of 148% but it also prompted an additional £280m of government funding for school lunches.

Sourced from Wall Street Journal, WARC

[Image: Kraft Heinz]