Kraft Heinz reports positive sales performance amid Covid-19

US giant Kraft Heinz had originally predicted a fall in its first-quarter 2020 sales, however due to a jump in demand for shelf-stable and canned food products as a result of the coronavirus, the company now expects its sales, on an organic basis, to rise 6% in the first quarter of 2020.

GlobalData’s food editor, Dean Best, commented: “After Kraft Heinz’s well-documented challenges over the last couple of years, the company’s sales numbers are a positive.”

However, he said that the rise in sales “won’t fully flow through to Kraft Heinz’s earnings in the first quarter due to the higher costs the company has incurred to meet demand, as well as due to expenses in areas like marketing the company flagged when it published its 2019 results in February.

“Moreover, Kraft Heinz has pushed back its long-awaited investor conference, planned for next month, during which CEO Miguel Patricio was to lay out his plans to get the company growing on a more sustainable basis. In this climate, the delay is understandable but investors will want to hear details of Patricio’s plans as soon as possible.

“And, like for other food manufacturers, there remains the open question about what a sales boost now means for demand one, two, or three quarters out. After loading their pantries, consumer demand for shelf-stable items will unlikely be as strong as it is now.”