Think Heinz and your mind probably turns to fond memories of eating baked beans, tomato soup and ketchup. But think Kraft Heinz and the image is more likely to be of a business that executes ruthless efficiency.
That is an image Steve Chantry, UK and Ireland commercial director and CMO of Kraft Heinz, is looking to shake off. He argues that rather than focusing on cost-cutting, Kraft Heinz is trying to create “a culture of ownership”, a move that was key in attracting him to the role.
He explains: “People will talk incorrectly [about Kraft Heinz] being a business that is ruthlessly efficient and cost driven. I think that’s a small part of the picture.
“The picture I would describe is of efficiency and effectiveness with the focus on the latter. We spend a lot of time understanding what works and building meticulous strong routines around that. We’ve been able to understand what about marketing works and what is the right commercial mix.
“A lot of companies will talk about their culture but few will really live it. [Here] people will go the extra mile and stick their neck out to do the right thing for their business. We’re all owners together and believe you should treat every pound as if it was your own.”
Chantry joined Kraft Heinz a year ago from Birds Eye and when we meet him at the company’s offices in central London, it is clear Chantry has settled in. He is wearing a baby blue jumper with the company’s name embroidered in the corner and is holding a red Kraft Heinz notebook. He has also neatly arranged a collection of Kraft Heinz products, which he keenly refers to throughout the interview.
In terms of marketing in the business, we’d made some progress but to be clear we weren’t growing on any key metric.
Steve Chantry, Kraft Heinz
So how has his first year been? “Pretty manic to be honest, but the brand has fulfilled all my hopes and dreams,” he says.
The office is near the top of the Shard with a view spanning across central London. It is an impressive backdrop for a meeting but for Chantry it represents more than that, it embodies the status and culture of the company.
He explains: “The Shard is a unique environment because it brings an energy and an opportunity to attract the best talent. Plus, very few FMCG companies are in central London.
“Kraft Heinz is a massive company I joined because there is no better food brand to work on in the UK. I joined because of the uniquely energised culture, the meritocracy and because of the dream for us to become the best marketing company in the world.”
Despite this enthusiasm, Chantry admits that when he joined a year ago the company had work to do. It wasn’t growing and in 2016 UK sales went from £847m to £709m, a 16.3% year-on-year decline.
“In terms of marketing in the business, we’d made some progress but to be clear we weren’t growing on any key metric; top-line performance, penetration, equity – they were all slow or on a downward trend.”
So he took a step back, analysed how marketing worked in the business and applied a new approach. He admits this “isn’t rocket science” but it meant the company assessed what attitudinal shifts needed to happen.
Chantry explains: “In the past we tended to focus on how we keep reminding consumers about what’s great about our products – the comfort, the warmth, the familiarity. This is all important but it didn’t tackle the challenges – health perceptions, convenience in terms of format, and ideas about being fresh and natural.”
It is early days but that shift in focus already seems to be paying off. The UK saw growth for the first time in seven years in 2017, marketing now gets a bigger budget and Chantry seems pleased, but not satisfied. “I don’t think I am ever 100% satisfied. We’re still on the journey, which lasts forever because no company stands still.”
Yet it is still the likes of Unilever and Procter & Gamble’s that the marketing industry looks to. Both have issued calls to arms to galvanise the industry, whether through a focus on the “murky” digital media supply chain or calling for an end to stereotypes in advertising. Is that something Chantry would ever consider?
“I have massive respect for P&G and Unilever so I am not going to comment on the individuals per se, but there are things we’re doing boldly as a business that we believe passionately in right now that have implications but we’re perhaps going about it more humbly.”
One of those things is an increasing focus on sustainability and social responsibility. Last year, Kraft Heinz released its first company-wide corporate social responsibility report, which included commitments such as a transition to 100% cage-free eggs in all its global operations by 2025 and using 100% sustainable palm oil.
It also has a partnership with Rise Against Hunger that aims to donate a billion meals to hungry people globally by 2021. For example, it donated at least 15,000 meals to the charity a day, and up to 20,000 dependent on social media activity, between 25 April and 15 May last year.
This, says Chantry, plays a key role in Kraft Heinz’s global vision to be “the best food company growing a better world”.
Innovation and marketing effectiveness
Another key aspect of being the best food company is “understanding our core business versus innovation” says Chantry.
“What we’ve now begun to find is a healthy mix for how we drive the relevancy of our icons, such as Heinz baked beans, ketchup and soup but then complement that with incremental innovation. Whereas in the past I think we’ve been a bit one or the other.”
That runs across its products, with a focus on both its iconic brands and new innovations such as Bullseye, a BBQ sauce currently available in the US and Canada that represents the company’s first foray into the craft trend. But it also applies to its approach to marketing effectiveness.
Chantry says this is an area he works on constantly, with Kraft Heinz using marketing mix modelling to measure the effectiveness of what it’s doing. It’s a rigour that Chantry finds “extremely helpful” although he says: “You can never use marketing mix modelling as 100% the answer otherwise you’ll never get beyond the past.
“I believe in a 70/20/10 approach, which is 70% proven, 20% how you value new models, 10% innovation. We try to apply that approach in rough terms across all our mix.”
That mix also needs to vary depending on the brand. Chantry explains: “How we prioritise marketing for Bullseye, which is a brand we want people to discover, compared to ketchup is very different.”
However, Chantry concedes that at times Kraft Heinz’s marketing has been too much about the logic, and that focus has on occasion come at the expense of creativity.
“Our EMEA CMO, Vicki Sjardin, says marketing is a combination of magic and logic, so creative and analytical performance management. It would be fair to say that historically we’ve been better at the logic than the magic and we’re on a journey that’s changing that and we’re seeing massive improvements,” he explains.
One way Chantry has looked to get the magic back is by creating a dedicated brand building team to focus creativity on a longer-term scale.
It would be fair to say that historically we’ve been better at the logic than the magic and we’re on a journey that’s changing that.
Steve Chantry, Kraft Heinz
Chantry explains: “It’s a model that’s been successfully pioneered in our US business over the last three or four years and it’s a month old here and I’m very confident it’s working. It requires the belief in marketing as being a longer-term engine. The reality is people act like sheep and all chase the nearest-term number unless you create that separate team.”
Kraft Heinz is also trying to foster its marketing talent with a global marketing academy dubbed ‘Ownerversity’. This is an online corporate training and development platform that aims to equip marketers (as well as finance, sales and methodology people) with new skills and prepare them for future challenges.
Chantry says: “It allows us to truly invest in developing people. We are a company that believes not just in talent as a driver of the business but also in talent above experience”, which he says means that people are often promoted faster.
The UK business also sets aside one day a month for teams to develop “functional excellence”. The idea is teams can interact with consumers or retailers, or take part in sharing best practice; the only criteria is it is a “productive day of development”.
This is something Chantry encourages: “The onus is on us as leaders to develop our people and to provide them with structured development as well as on-the-job training.”
Ecommerce and the future
A key part of being the best food company in the future will be ecommerce. Chantry claims Kraft Heinz now “over trades” in ecommerce compared to a year ago and he says he has “a personal passion for the development”.
He explains: “The retailer base is changing and I think that’s interesting and it breeds opportunity. As a marketer it’s the one channel where we have access to the consumer as a shopper within a click of a button.
“The consumer is willing to be engaged with digital marketing where it translates into ecommerce. The challenge for my business and others is how we truly embrace the merger of that.”
Yet while Chantry clearly has big plans for the company, he says to expect “more of the same” over the next year. That means teaming up more effectively with retail partners, nurturing key categories and driving newer sectors such as infant, frozen and ‘oriental’ brands.
As the interview ends Chantry takes off his company jumper and visibly relaxes. “The bar is forever being raised but that’s a good thing. It’s a unique and inspiring place to be and a journey I’m excited about being on.”