Kraft Heinz Company : Largest Food And Beverage Company

• Kraft Foods Inc., is the largest food and beverage company in North America and the second largest in the world. Was founded in 1903 by James L. Kraft.

The Kraft Company has been around for a long time now. Personally I believe you must have a protective firm, not allowing other companies to steal your ideas and product. This will give the firm advantage over others.

Klein, in “The Discarded Factory,” provides many examples to show that corporations are much less concerned about production and much more about their brand name. The statement he uses to help explain the reason behind why they are doing this is, "The difference between products and brands is fundamental. A product is something that is made in a factory; a brand is something that is bought by a customer,” (Peter Schweitzer). Many companies believe that while their products and factories are temporary and require upkeep, respectively, their brand will live on for much longer. Because of this, they shift towards outsourcing their production to keep costs as low as possible. The companies then use this extra money to help build their brand using sponsorships and marketing campaigns. In addition to sponsorships and marketing campaigns, companies will also improve their packaging, distribution, and retail channels, and they will expand. A quote once said by Nike’s

Westminster Company is a giant Global manufacturer of health products whose brand has been recognized by the world. As the company they have three different operations which produce and distribute different product lines. Their main strategy on which they are working and which is a major success for them is decentralized management. Now they are re-evaluating their traditional supply chain strategy because the company is getting too much pressure from their large domestic’s customers and global customers. Now the company has to study on

{Build the Supply Base: supplier selection1. supplier evaluation- find potential suppliers, supplier certification (qualification, education, certificationISO 9000,14000). 2. Supplier development- integrate supplier in system, quality require, product specs, schedule/delivery, procurement polices, training, engineer/production help, information transfer procedures. 3. Negotiation- significant element, strategies: Cost based price model (open books to supplier, based on time and materials) Market based price model (based on published, auction, index prices: commodities) Competitive bidding (most common, no longterm relationship, request for rfq). 4. Contracting- share risks, benefits, incentives. Centralized purchasing, E procurement (online catalogs/exchanges, online auctions).} Logistics MGT- obtain efficient operations through integration of all material acquisition, movement, and storage activities. Frequent for outsourcing, allow competitive advantage from reduce costs and improve customer service. 1.Shipping systems: truck(flexible, moves majority manufactured goods) rail( large loads, containers) Airfreight( fast/flexible light loads, expensive) water( used for bulky low value cargo, oldest way of transportation) Pipelines( transport oil, gas,

The company may now be known as just Kraft Foods Group but the slogans “make today delicious” and the old statements about healthy enjoyable food still stands true. Just like everything in life, things must adapt and grow with time. So being the best food and beverage company means having healthy and delicious food.

As I mentioned above, Mondelez was created to fit a need that Kraft Foods Inc. had to increase their growth globally. Kraft Foods Inc. established their name in 2007 when they broke apart from Altria Group. Kraft became the second-largest processed food company in 2012 with annual revenues of more than $54 billion in 2012 (Gamble, 2016). However, significant growth in the company was not much different from that in 2007 when they became independent. It is the belief of the company’s upper management and board that the reason for their stagnation was due to the fact that their corporate strategy was not focused on the growth of the company.

In this assignment I will be writing a formal report that will explain a typical procurement process, I will outline a variety of methods of supplier reimbursement and contract relationships; I will also outline the pros and cons of each contract type. As well as this, I will explain a typical supplier selection process through the use of Carters 10 C’s and a typical selection process model.

Heinz manufactured products in three categories: Ketchup and Sauces, Meals and Snacks, and Infant Nutrition. Heinz’s strategy was to

Nestle, an international recognized multinational corporation is the world’s leading nutrition, Health and Wellness Company. Nestlé’s mission of “Good Food, Good Life” aims at providing customers with the finest quality of nutritional choices within a wide range of food and beverage classifications (NESTLÉ - Vassos Eliades. (n.d.). Retrieved from http://www.vassoseliades.com/consumer-goods/nestle.html, para. 1). The merger in 1905 between Nestle and the Anglo-Swiss Milk Company created the Nestle we know today. Nestle is one of the world’s largest suppliers of food and nutritional products operating with 461 factories in 83 countries, with 328,000 employees worldwide (Fries, Lorin, Goldberg, Ray, 2012. Nestle: Agricultural Material

It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)

Today, it is even more important for a company to constantly identify and implement operational efficiencies to protect their margins. The development of innovative supply chain strategies and operational management enables world-leading companies like The Kraft Heinz Company (Kraft Heinz) to provide functioning solutions for the needs of the company. Conversely, consumer spending continued to receive downward pressure at checkout driven by an uncertain global economy. The Kraft Heinz Company is aimed to tackle this challenge head-on by streamlining the supply chain that supports its brands in North America. This strategy would enable the digital transformation of many business processes, integrating data flows across the company for greater efficiency and advanced analytics. In

Kraft has a strong global strategy. They found themselves operating in more than 80 countries, which included 220 manufacturing and processing facilities and 228 distribution centers. Because of the different regulations in each country related to food, they found themselves in need of several different facilities for the manufacturing of their food products.

The Kraft Heinz Company successfully merged on July 2, 2015 when Heinz owned by Berkshire Hathaway and 3G Capital teamed up with Kraft Foods Group. The deal is considered one of the top most mergers in the food and beverage industry worldwide. Currently the company has its strong presence worldwide. Moreover both 3G Capital-a Brazilian Equity Firm and Warren Buffet together contributed by investing $10 billion in the deal making the company worth about $46 billion.

The threat of off brand or store brand condiments is very significant to Heinz. The rising popularity of salsa and similar international condiments is also something of which Heinz must be aware. The new trend of dieting and losing weight could also be a threat to the Heinz company. As people tend to eat healthier they may consume less Bagel Bites, and Boston Market gravy. The strength of the American dollar and economy is a serious threat to realized profits for Heinz. Heinz is very susceptible to international food regulations as well. They should have a plan of action if something similar to Mad-Cow occurs, affecting one or some of the ingredients of their products.