Kraft Heinz’s incoming North American president dishes on innovation, M&A

Kraft Heinz recently named Pedro Navio as president of its North American business starting next year.

Navio, who has been with Kraft Heinz since 2017, is currently its president of taste, meals and away from home in North America. Before Kraft Heinz, he spent more than 15 years at energy drink maker Red Bull.

He takes over Kraft Heinz’s largest region by revenue from Carlos Abrams-Rivera who will become CEO of the Oscar Mayer, Lunchables and Capri Sun manufacturer in January.

Navio recently answered questions via email about the company’s North American operations, innovation at Kraft Heinz and M&A. The interview has been edited for brevity and clarity.

 

FOOD DIVE: As you prepare to become president of Kraft Heinz’s North American business, what are the biggest challenges and opportunities facing the operation? 

Pedro Navio: I couldn’t be prouder to step into the role of President for our North American business. Over the past four years, thanks in large part to Miguel Patricio and my predecessor Carlos Abrams-Rivera, the organization has made tremendous progress, and we have a solid foundation to build our future.

There are so many opportunities on the horizon. We have reset and reengineered the company with Agile@Scale, leading us to be as nimble as a start-up, but with the scale of a company in nearly every household in North America. We are innovating faster than ever before across our iconic brands, allowing us to create things like Heinz Remix, the world’s first customizable sauce dispenser, in just six months.

Most important, when it comes to our people and culture, we’ve focused on bringing in and developing internally the best talent and building a culture of ownership. This is paying off, and we’re seeing the highest engagement scores in many years.

Our long-term strategy is working, and we have a clear path forward for the business. Our ambition is to lead the future of food and we’re well on our way.

When it comes to challenges, inflations and ingredient costs will continue to be headwinds next year. While inflation is cooling in some areas, we’re still feeling the effects. Some ingredient costs are also coming down, while others like tomatoes and sugar are still high. Our teams have done a great job predicting and adapting to this new normal and we’re doing everything possible to find efficiencies across our business to offset and mitigate higher costs.

 

FOOD DIVE: How has the company changed to transform and innovate faster compared to four years ago?

Navio: Over the last 4 years, we’ve completely reset the company’s foundation. We’ve deployed Agile@Scale across the organization, giving us the ability to take a “fail fast, fail forward” approach for many of our innovations, allowing us to gather insights directly from consumers with speed to inform go-to-market plans, and it’s been a game changer for our business.

When it comes to North America, we view innovation as the single biggest driver of growth as we target $2 billion in incremental net sales by 2027. To bring this to life, we created One Innovation Engine — a centralized approach to prioritize and scale at speed. It reimagines product development and leverages breakthrough technologies to create a portfolio that delivers value for our customers and consumers not only based on where they are today, but where they’ll be in the future. 

A few recent examples of our transformation and approach to innovation include:

• KH Lighthouse: Our industry-leading control tower looks across the supply chain uses AI to predict variables that could impact a product’s delivery path. The technology has significantly improved demand and production forecast accuracy, including improving end-to-end supply chain performance by boosting our sales forecast accuracy by 20%, inventory forecast accuracy by 35% and reducing reaction time by 80%.
• 360CRISP: 360CRISP is revolutionizing the microwave and frozen aisle by delivering crisp products from the microwave like you would traditionally only get from the stove.
• Heinz Remix: And as I mentioned above, we recently created the first customizable and [Internet of Things]-enabled digital sauce dispenser to launch. Heinz Remix allows users to customize their sauce choices (with over 200 possible combinations) wherever they eat away from home – stadiums, restaurants, etc.

 

FOOD DIVE: Are you thinking more about M&A at Kraft Heinz? What categories or white spaces could you target with M&A?

Navio: While we won’t comment on specifics when it comes to M&A, what I can share is that we have approached acquisitions and divestitures with discipline. We’re focused on opportunities that are aligned with our strategy, which includes enhancing our geographic profile and sharpening our focus where we have a competitive advantage. At the same time, it’s important for us to preserve financial flexibility, and investment grade status.