Kraft Heinz feels pressured as the brand falls behind the food consumption trends and faces other assembly struggles, says Wolfe Research analyst Scott Mushkin on CNBC Friday.
" So [there are] only a lot, many challenges, not to mention private label, so the company faces huge challenges, says Mushkin. They have reinvested in their brands, but it just doesn't work, and maybe it's even worse because it doesn't work, if they only cut costs and don't reinvest.
Jeff Robards, Alantra's global consumer spending leader, also emerging in the "Closing Bell" segment, said large food companies could tackle these trends with the right growth strategy. But the problem with Kraft Heinz, he said, is throwing the marketing dollars won & # 39; t find the pulse of consumers like quite innovation.
Instead, it has allowed entrepreneurs and smaller businesses to grow, he said.
"It's not the big food companies [growing] because they're just not close enough to the consumer to find these things out," Robards said. "And you see the efforts of all these companies to try to do so, but I think the problem is that they can't effectively get out of their historical way of doing business to talk to all the trends and all that growth." 1
"May we like to get some M&A in this room," he said. "And man, we need consolidation, but the family structures actually prevent some of it, but you know we hope we get something because we need it in this room."
Kraft Heinz fueled more than 27 percent Friday, the worst daily performance ever. The stock had two consecutive negative sessions after having knocked out its dividends, writing down some of the key brands, and revealed it was being investigated by the SEC.
Fourth quarter revenue and revenue also fell under Wall Street expectations.