Heinz is of course known around the world as an iconic brand. Not everybody knows
however that Heinz has built this global business not only on the ketchup and baked
beans it sells under its own name, but also on a strong portfolio of brands that often
are known and popular only in a specific country and region. Following Heinz’s
acquisition of French white sauce brand Bénédicta, a move that seems to fit in perfectly
with their international growth strategy, we spoke with Peter Boterman, Director of
Communications for Heinz Continental Europe about strategic issues such as brand
development and corporate values.
While best known for its ketchup, the
H.J. Heinz Company manufactures
thousands of food products in plants
across the world and markets these
products in more than 200 countries.
The origins of this vast food empire can
be traced to Pennsylvania, where eightyear-
old Henry John Heinz began
selling produce from his family’s plot to
nearby neighbours in the mid 19th
century. When Henry Heinz died at age
75 in 1919, his company had a
workforce of 6,500 employees and
maintained 25 branch factories, with a
European presence already firmly
established. Previously a family
business, Heinz made its first public
stock offering in 1946. Foreign sales of
baked beans and ketchup, particularly
in England, subsequently contributed
substantially to the company’s
success.
In the Netherlands, where Peter
Boterman is based, Heinz dramatically
expanded its business through the
acquisition of the CSM Food Division
from CSM NV, now eight years ago.
With this acquisition, Heinz bought
leading Dutch local brands including
De Ruijter, Venz, Karvan Cévitam,
Roosvicee, Honig, Brinta, and HAK. At
the time, this was one of the biggest
acquisitions Heinz had ever made
outside of North America. Hak has
been divested in 2006. Today Heinz
has a number of factories in Belgium
and the Netherlands. The newest
addition to Heinz’s Dutch portfolio of
brands is Wyko®, best known for its
sauces.
Prior to joining Heinz, Boterman was
employed by Honig, a former CSM
brand. He currently works at Heinz’s
Zeist office, which serves as the Heinz
headquarters for Continental Europe.
He explains that the headquarters only
have a small support function, however,
as the strategic focus at Heinz is on
building strong, local brands next to
the Heinz brand. “Heinz identifies four
regions within Europe: the UK and
Ireland, Italy, Continental Europe and
Russia,” Boterman explains. “The Heinz
ketchup brand is universal, of course,
but otherwise we’re strong with
different brands from one country to
the next. In Italy, we’re particularly
strong in the babyfood segment with
the Plasmon® brand, for example, and
in the UK and Ireland Heinz ketchup
and baked beans have such an iconic
status that some people think it’s
actually a local brand. We also own
other British perennial favourites such
as HP® Sauce and Lea & Perrins®.”
It’s pretty clear that Heinz products
have emotional pull with consumers
across Europe worldwide but the
company cannot rest on its laurels. The
company claims to hold true to a brand
premise that its founder, Henry J.
Heinz, set out back in 1869. The idea
was that if the company provided
superior products to consumers, it
would be rewarded with strong
customer loyalty. But the brand is also
moving along with the times,
responding to a number of interrelated
megatrends in the contemporary food
scene on the basis of three elements
that are key to many A brand food
producer’s marketing strategy these
days: premiumisation, convenience and
health. Interesting to note in that
regard is that the global marketing
community widely respects Heinz for
communicating the ‘nothing but
natural’ story by taking the brand icon
of the ketchup bottle and using its
image sliced like a fresh tomato. In
packaging design, too, Heinz has
attempted a more sophisticated look.
A couple of years ago the company got
luxury designer Paul Smith to produce
a limited-edition design for the iconic
brown HP bottle, for example.
Peter Boterman confirms that the
health and wellness trend is one
that no food company can ignore at
present. “Healthier versions and more
convenient packaging are important,
but it all has to be rooted in the same
superior experience for the consumer
concept.” Heinz notably addresses the
health issue by researching and
emphasising the health benefits of the
grown tomatoes: tomatoes contain
plenty of vitamin C and also are a rich
source of lycopene. Scientists consider
lycopene as a potential agent for
the prevention of chronic deseases
cancer. (source: dr. A Venket Rao, isbn:
0-9553565-0-4)
“Ketchup is ketchup,” adds a down to
earth Boterman. “We’re using a 150
year old recipe and we’re not going to
change that. But we can emphasise the
health benefits and the freshness of the
ingredients we use, by selling the
ketchup in transparent plastic bottles
that have the look of a glass bottle. This
has worked particularly well for us in
Spain, where informing the public about
the health benefits of tomatoes has
really paid off for us.” Another issue
that’s high on Heinz’s agenda is
sustainability in combination with
Corporate Social Responsibility. “We
produce recyclable packaging material
for our plastic TK bottles and we also
promote localpackaging wherever we
can.” The Heinz ketchup sold in Europe
is predominantly made from European
ingredients, with tomatoes being grown
in Heinz-controlled open air farms in
Portugal, Spain and Greece mainly.
“Under very strict conditions using the
latest in drip irrigation technology,” adds
Peter Boterman. “The whole process from
growing tomatoes to packaging and
distribution is very transparent so that
we can guarantee the quality of our
products to consumers with the utmost
confidence.”
In line with its European growth strategy,
Heinz earlier this year acquired
Bénédicta, a French manufacturer of
table top sauces, mayonnaises and salad dressings. The Bénédicta acquisition was
said to fit perfectly into Heinz’s global
strategy to focus its portfolio on three
attractive core categories, Ketchup &
Sauces, Infant/Nutrition and Meals
& Snacks (including baked beans,
soups and pasta meals).
This latest move
should contribute to the company’s
strategy to grow its sauces business in
France. Bénédicta is one of a few
century-old brands founded in France.
With a long tradition of product
innovation, Bénédicta notably was the
first to introduce table top mayonnaise
in France in 1957 and a few years later
other varieties of table top sauces.
Throughout the years, Bénédicta,
which has approximately USD 90
million in sales, has become the French
standard for quality sauces, including
the traditional mayonnaise and
Béarnaise sauces, as well as modern dip
and barbecue sauces. ““France is a big
market for us,” comments Boterman. “We
were already selling the Heinz brand
there, of course,
and own a couple of additional
condiment brands in Europe , but with
the acquisition of Bénédicta, we’ve
instantly gained a leadership position in the market for white sauces.”
Bénédicta is a French brand with
typically French products aimed at a
French market, adds Boterman. “Heinz
generally attaches great value to
strong local brands. Our global growth
strategy indeed is to combine the
strength of the global Heinz brand
with strong local brands.” Bénédicta
owns two factories in France.
Meanwhile the retail environment
remains fiercely competitive across
Europe, as Peter Boterman readily
admits.
The current economic climate
could make things even more difficult
but the group’s first quarter results,
published in August of this year,
show no evidence of hard times being
ahead: Heinz Europe sales, specifically
increased 20%. Volume increased
6.4%, according to the financial
report principally due to new
product introductions and increased
promotional activity in the UK and
Continental Europe. Volume increases
were achieved on Heinz® Ketchup
across Europe, Heinz® Beans and salad
cream in the UK, Pudliszki branded
products in Poland, and Italian
infant nutrition. Net pricing increased
4.3% driven by Heinz® Ketchup, beans
and soup, broad-based increases in
Russia, convenience meals in the
Netherlands and Italian infant nutrition
products, partially offset by increased
promotional spending in the UK.
Operating income increased 13%,
reflecting the sales increase and
favourable foreign exchange, partially
offset by increased commodity and
fuel costs and higher manufacturing
costs in the UK. Peter Boterman
remains cautiously optimistic about the
future: “It’ll be important for us to
demonstrate the added value of our
products. We need to understand our
consumers, and that their needs are
ever changing.”
