Heinz CEO sees changed consumer habits
H.J. Heinz Co sees a long-lasting consumer shift to thrift and must carefully balance its business strategy in response, the ketchup maker's chief executive said on Monday.
Heinz Chairman and CEO William Johnson told Reuters in an interview the company will have to weigh its approach to promotional trade spending, such as coupons, and other types of marketing as consumers continue to focus on price even as the economy in the United States and Europe improves.
To say that consumers will return to historic norms is disingenuous, he said.
Heinz highlighted a move to increase trade spending when it reported earnings in late November, as it grapples with rivals promoting goods at lower price points and recession-weary consumers turning to more private-label products.
What we're seeing right now is an industry that in some cases is grasping for volume and, as a result, has ramped up trade spending, he said.
But Johnson said the maker of Heinz ketchup, Ore-Ida potatoes and Smart Ones frozen meals would not keep resorting to that one strategy to keep sales aloft.
(Reporting by Brad Dorfman; editing by John Wallace)
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