Kraft Heinz has announced that it has ‘significantly’ reduced production at three plants providing restaurant supplies, yet boosted output for packaged foods amid the coronavirus outbreak.
The announcement was made by Kraft Heinz’ CEO Miguel Patricio, who was appointed this month last year, during a video presentation hosted by Brazilian retail brokerage XP.
The owner of Philadelphia and Lunchables has cut output at two plants in the US and one in the UK. Both affected factories supply the food service segment which has witnessed a drop in demand (mainly in Europe) due to the pandemic.
Whilst Patricio initially said the plants had been halted, a statement was sent after the video amending this to: “These facilities have significantly reduced production”.
Patricio continued to add that its packaged food units are working in three shifts to meet high demand, especially for macaroni and cheese in the US and canned beans and soup in the UK.
“We feel that people are seeking more comfort food at this moment, as they seek some other ways to feel pleasure,” said Patricio, cited by Reuters.
Operations in China will return to normal, however Patricio feels that consumers’ behaviour has changed due to more individuals using home deliveries.
According to a Reuter reports, Patricio said he considers Kraft Heinz to be a “safe haven” but is worried about the effect of credit constraints on its suppliers, adding that he is looking at ways to address the issue.
Earlier this year, Kraft Heinz posted ‘disappointing’ 2019 results as the company saw its fourth-quarter net sales decrease 5.1% as it disclosed impairment charges of $666 million, including writing down the value of Maxwell House by $213 million.
The Oscar Mayer and Philadelphia cream cheese owner was hit by lower demand in the US for cheese, coffee, cold cuts and bacon.
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