Kraft Heinz CEO Talks Cost Control, Product Reinvention and People Management

While Kraft Heinz—the company created when Brazil’s 3G Capital joined with Berkshire Hathaway to acquire Kraft in 2015—has fueled speculation about acquisitions, the company’s CEO, Bernardo Hees, 47, has focused his efforts on changing the topic, looking at the gains his new company has made through cost control, product reinvention and people management. Chief Executive spoke with Hees, an economist, 3G partner and former CEO of 3G-owned Burger King, about the company’s new meritocracy and how Kraft Heinz is confronting industry disruption.

CE: Tell us about the challenges involved in taking two iconic brands, making critical cultural changes and having the brands still retain the qualities Americans have known and loved. 
Hees: We’re happy with the speed with which we integrated culture, systems and people, while being transparent about what Kraft Heinz would be—a culture based on performance-driven people who grow at their own pace. We talked to everyone. And we listened, in town halls and individual meetings. We explained how people could grow within the company, what’s expected from them, what are the values, the visions, and what we’re trying to build. Not everybody’s going to say, “Hey, that’s for me.” There were quite a few who said, “Hey, I respect what you’re saying, but I want to do something else with my life.”

CE: How were you able to help people acclimate to this new way of doing things?
Hees: We trained them. We gave them more opportunities. They were able to run things that were much bigger than they ever imagined. It really became a “dream big” environment.

CE: How would you compare the culture of Kraft Heinz today with the cultures of the two original companies?
Hees: It’s all about meritocracy and action, people being accountable for their goals and being performance-driven. It’s ownership. Not being afraid of failure, knowing that some things are going to work well, some things are not going to work well, learning from mistakes and moving forward.

CE: Have many new people been drawn to the company by this change? Is the current workforce vastly different from the workforce when you started this? Or is it largely the same people, just energized differently?
Hees: I think we’ve now got the right balance of people who were here before who are now growing and being promoted, and some people who came from the outside and a lot of new people starting their careers.

CE: How well has this worked?
Hees: You can see the improvement in profitability, the initiatives we are putting behind growth with investments in innovation, go-to-market, marketing, working dollars and so on. You can see what we’re trying to do with our brands being number one and number two in every category. You can see the investment behind quality. You can see from the promotions from within that we’re developing our own people to do more, and you can see our presence in our communities and our efforts behind fighting hunger worldwide. If you combine all this with clear metrics, you will see we have come a long way in the past two years.

CE: Looking at changes in the grocery industry— Amazon’s purchase of Whole Foods, all the different ways people are shopping for groceries—what are you doing to jump ahead of this disruption?
Hees: There are a lot of efforts within our company in these new channels. Not only in e-commerce, but by drug stores, by discounters, by clubs, by mainstream. We truly believe our brands can be very relevant as we continue to understand what consumers need. We are really pushing speed and investing heavily in order to adapt and serve our consumers the way they want.

CE: What sort of changes have you made to make your products more relevant?
Hees: It’s all about having choices. I think the changes in Mac & Cheese have been remarkable—being natural and pushing nutrition, the same thing we’re doing with Oscar Mayer hot dogs. On the Heinz side is the variety of options in flavors. Category by category, you’re going to see much more choice, much more relevance to the brands, and that’s exactly what the consumers are telling us they want.