PITTSBURGH -- Kraft Heinz Co. has named a new chief executive as it struggles to remain relevant amid changing American tastes.
The company said Monday that Miguel Patricio, a longtime executive at Anheuser-Busch InBev, will replace outgoing Chief Executive Officer Bernardo Hees in July.
Patricio, 52, has been based in New York but will relocate to Chicago as he joins Kraft Heinz, which makes a host of products including Oscar Mayer hot dogs and Heinz ketchup. He'll officially take the reins on July 1, giving him more than two months to develop a strategy as he transitions from beer to the food industry.
"I bring fresh eyes to the business," he said in an interview. "It's a big opportunity."
Patricio will take over a company that has been battered in recent years and said one of his first jobs will be laying out his beliefs and strategy for the company's thousands of employees.
"I need to almost be an evangelist in the company," he said. "The CEO's first concern has to be people."
Patricio, a native of Portugal, served as InBev's chief marketing officer from 2012 to 2018, its Asia Pacific president from 2008 to 2012 and its North America president from 2006 to 2008. He has also worked at Philip Morris, Coca-Cola and Johnson & Johnson.
"Miguel is a proven business leader with a distinguished track record of building iconic consumer brands around the globe," said Alex Behring, chairman of Kraft Heinz's board of directors, in a statement.
Kraft Heinz, which is based in Pittsburgh and Chicago, has been hurting as consumers looking for fresher, healthier food pivot away from its familiar stable of brands, such as Jell-O, Kool-Aid and Velveeta. In February, the company lowered the value of its Oscar Meyer and Kraft brands by $15.4 billion.
Investors have also questioned moves by 3G Capital, the Brazilian investment firm that engineered Kraft's tie-up with Heinz in 2015 along with Warren Buffett's Berkshire Hathaway. The firm has cut costs at Kraft Heinz, but some analysts say it hasn't invested enough in new product development.
Kraft Heinz lost $12.6 billion in the fourth quarter and said its net sales were flat from the prior year. It also lowered its dividend and recorded a $25 million charge after a U.S. Securities and Exchange Commission investigation found problems with its procurement reporting.
"This set of disappointing results dampened management's credibility with investors and might have prompted the board to initiate the CEO change," Bernstein analyst Alexia Howard said in a note to investors.
Howard said the selection of Patricio indicates that 3G's merger and cost savings phase has ended and the board is looking for managers with more marketing and operational experience. 3G was also behind the 2008 merger of InBev and Anheuser-Busch. But unlike Hees, who is a partner at 3G, Patricio is not directly involved with the investment firm.
Patricio's experience overseas could also help the company expand in new markets, Howard said. The U.S. accounted for 70 percent of the company's net sales in the fourth quarter.
Kraft Heinz shares fell 0.2 percent to close Monday at $32.90.
Information for this article was contributed by The Associated Press and by Craig Giammona of Bloomberg News.
Business on 04/23/2019