cloudy.png
Sunday September 27th, 2020 2:06PM

Struggling Kraft Heinz sells dairy brands to Lactalis

By The Associated Press
Related Articles
  Contact Editor

Kraft Heinz said Tuesday that it is selling its natural cheese business — including its Cracker Barrel and Breakstone’s brands — to French dairy company Lactalis Group as part of a larger restructuring.

The $3.2 billion sale includes Kraft Heinz production facilities in Tulare, California; Walton, New York; and Wausau, Wisconsin. About 750 employees at those plants will transfer to Lactalis Group.

Kraft Heinz, however, will keep its Philadelphia cream cheese brand, Kraft singles and the Velveeta and Cheez Whiz brands. It’s also retaining its macaroni and cheese business.

Included in the sale are Kraft Heinz’s natural, grated, cultured and specialty cheese businesses in the U.S., its grated cheese business in Canada and its entire international cheese business. Kraft Heinz already sold its natural cheese business in Canada last year for $1.2 billion.

The sale is expected to close in the first half of next year, the companies said.

Bernstein analyst Alexia Howard praised the sale. In a note to investors, Howard said Kraft Heinz's natural cheese business was the company's Achilles' heel because the brands had trouble differentiating themselves from store brands.

Kraft Heinz — formed in a 2015 merger — has been struggling as consumers increasingly seek fresh, minimally processed foods. Last year, the company slashed the value of its Oscar Meyer and Kraft brands and took a $474 million impairment charge because of the falling value of brands like Maxwell House, Lunchables, Velveeta and Cool Whip.

On Tuesday, Pittsburgh-based Kraft Heinz said it plans $2 billion in cost reductions through 2024. The company said it plans to increase marketing spending and nimbly manage its portfolio of brands.

Kraft Heinz CEO Miguel Patricio said the sale of the natural cheese brands is an example of that portfolio management.

“The transaction will enable us to build sustainable competitive advantage in businesses where we have stronger brand equity, greater growth prospects and can use our manufacturing scale and consumer-based platforms approach,” Patricio said in a statement.

Kraft Heinz shares closed up 10 cents at $31.97 Tuesday.

Lactalis Group — whose brands include President specialty cheese and Stonyfield Organic yogurt — said the Kraft Heinz brands are a good strategic fit. The Laval, France-based company, which has U.S. headquarters in Buffalo, New York, has eight U.S. plants with 2,600 employees.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Industries, AP Business - Agriculture
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Biden courts Latino voters in 1st trip to Florida as nominee
Joe Biden has made his first trip to Florida as the Democratic presidential nominee with an urgent mission to boost support among Latinos who could decide the election in one of the nation’s fiercest battleground states
6:59PM ( 24 minutes ago )
City to pay $12M to Breonna Taylor's family, reform police
Louisville Mayor Greg Fischer says the city has agreed to a settlement with the family of Breonna Taylor that includes a $12 million payment and police reforms after the Black woman was fatally shot by police who burst into her home at night
6:43PM ( 40 minutes ago )
South Dakota AG was frequent traveler before fatal crash
South Dakota Attorney General Jason Ravnsborg had made few waves as the state's top law enforcement officer until he struck and killed a man with a car over the weekend
6:36PM ( 48 minutes ago )
Associated Press (AP)
Shooting outside US court in Phoenix wounds federal officer
Authorities say a drive-by shooting has wounded a federal court security officer outside the U.S. courthouse in downtown Phoenix and a person has been taken into custody
6:18PM ( 1 hour ago )
For television executives, return of football is good news
Pro football has never been more important to television executives as it is this year, and its return is cause for celebration
6:12PM ( 1 hour ago )
FedEx's profit jumps as business deliveries improved
FedEx’s profit jumped 67% in its latest quarter, as online shopping remained popular among customers avoiding stores and shipments between businesses improved
6:03PM ( 1 hour ago )
AP Business
Apple debuts discount watch, but no new iPhones ... yet
Apple is introducing a cheaper version of its smartwatch, its latest attempt to broaden the appeal of its trend-setting products while more consumers are forced to scrimp during ongoing fallout from the pandemic
3:19PM ( 4 hours ago )
The Latest: Spain’s death toll for virus surpasses 30,000
Spain’s official death toll for the coronavirus surpassed 30,000
1:20PM ( 6 hours ago )
The Latest: Hospitals in England face virus test shortages
Hospitals in England say a shortage of coronavirus tests in Britain is jeopardizing efforts to restore medical services and prepare for a potential surge in coronavirus cases this winter
10:59AM ( 8 hours ago )
AP Business - Corporate News
The Latest: Missouri students expelled over virus violations
With more than 1,300 of its students infected with the coronavirus, the University of Missouri in Columbia has expelled two students and suspended three others for violating rules meant to slow the virus’ spread
4:19PM ( 3 hours ago )
Stocks give up part of an early gain but still end higher
Stocks gave up part of their gains from earlier in the day but still closed higher on Wall Street Tuesday
4:09PM ( 3 hours ago )
The Latest: Casino boats break loose in storm; dock damaged
Two large casino boats have broken loose from a dock where they were undergoing construction work in Alabama as Hurricane Sally approaches the Gulf Coast
3:50PM ( 3 hours ago )
AP Business - Industries
China becoming battleground for plant-based meat makers
China has become a battleground for plant-based meat companies looking to tap into the world’s largest market for meat-consumption
12:14AM ( 4 days ago )
Smithfield Foods pork plant faces OSHA fine from outbreak
Federal regulators have cited Smithfield Foods for failing to protect employees from exposure to the coronavirus at the company’s Sioux Falls plant, an early hot spot for virus infections that hobbled American meatpacking plants
7:00PM ( 5 days ago )
The Latest: Gov. Cuomo won’t let NYC reopen restaurants
Gov. Andrew Cuomo says he won’t let New York City reopen its restaurants for indoor dining until the city has a plan to monitor and ensure they’re following regulations for coronavirus prevention
2:10PM ( 1 week ago )
AP Business - Agriculture
For television executives, return of football is good news
Pro football has never been more important to television executives as it is this year, and its return is cause for celebration
7:21PM ( 3 minutes ago )
2 Giants-Seattle games off due to smoky skies, moved to SF
The two-game series between the San Francisco Giants and Mariners in Seattle that was scheduled to start Tuesday night has been postponed because of poor air quality caused by the West Coast wildfires
7:16PM ( 8 minutes ago )
Biden courts Latino voters in 1st trip to Florida as nominee
Joe Biden has made his first trip to Florida as the Democratic presidential nominee with an urgent mission to boost support among Latinos who could decide the election in one of the nation’s fiercest battleground states
6:59PM ( 25 minutes ago )
City to pay $12M to Breonna Taylor's family, reform police
Louisville Mayor Greg Fischer says the city has agreed to a settlement with the family of Breonna Taylor that includes a $12 million payment and police reforms after the Black woman was fatally shot by police who burst into her home at night
6:43PM ( 41 minutes ago )
South Dakota AG was frequent traveler before fatal crash
South Dakota Attorney General Jason Ravnsborg had made few waves as the state's top law enforcement officer until he struck and killed a man with a car over the weekend
6:36PM ( 48 minutes ago )