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Heinz continued its global growth in Fiscal 1997. The company's worldwide net sales reached a record $9.36 billion. U.S. operations accounted for 55% of this figure, with the remaining 45% coming from non-U.S. affiliates. Heinz supported its brands during the year with $2.05 billion in marketing expenditures.
Brand BuildingHeinz's power brands led the charge. In North America, Heinz ketchup captured roughly half of U.S. retail sales and 73% of the Canadian market. The growing consumer appetite for meals away from home helped spur a 6% increase in Heinz foodservice sales. Heinz U.S.A. increased sales of its venerable 14-ounce ketchup bottle 20% by converting it from glass to plastic. Foremost among marketing innovations was Heinz U.S.A.'s Art of Ketchup campaign held in conjunction with the National Endowment for the Arts and Scholastic magazine. Three children's label designs were selected from among 45,000 submissions and put on limited-edition bottles of Heinz ketchup. Offshore, Heinz's share of Sweden's foodservice ketchup market jumped 25%. Already a favorite in Spain, Heinz's tomate frito sauce quickly took 25% of the Netherlands market.Infant feeding flourished, with Heinz holding strong market position in Canada, Southern and Central Europe, Australasia and China. Heinz U.K. held 58% of its market and, in Spain, Heinz Iberica's baby food sales soared 32%. Heinz Italia, with 78% of the country's infant feeding market, doubled sales of freeze-dried baby food. Heinz India reported higher sales of infant supplements and products. In the U.S., Heinz enjoyed more than a 17% share and introduced 14 new baby food varieties. StarKist tuna remained supreme, with a U.S. market share exceeding 47%. Heinz Italia successfully integrated its acquisition of the Mareblu brand. Petit Navire led the tuna market in France. Down Under, Australian sales of tuna lunch kits more than doubled. Heinz was a leader in the $10-billion U.S. pet food industry, with 17% of the cat food business and 17% of dog food sales. Heinz also had 33% of the attractive and growing treats market. 9-Lives reigned, with 26% of the canned cat food market. Heinz Pet Products continued to penetrate the $1-billion pet treats segment with innovative, convenient stand-up packaging and new varieties, such as Jerky Treats Sizzlin' Bac'n. Ore-Ida took top honors with 55% of the retail frozen potato market. Ore-Ida's new country-style potato products fueled sales growth. Sales of Ore-Ida Hash Browns rose 9%, while a new mozzarella variety of Ore-Ida Cheese Bites quickly became the number-one item in the product line.
In the U.K., Weight Watchers launched its easy-to-follow 1 Production and ProcurementHeinz, as part of Project Millennia, announced a major reorganization of its production and distribution network. This involves the closure or sale of approximately 25 plants worldwide. Earlier in the fiscal year, Heinz U.S.A. opened a 204,000-square-foot plant in Jacksonville, Florida, to meet the growing demand for portion-control foodservice products. The company more than doubled the size of its Mason, Ohio facility and installed new production equipment at plants in Holland, Michigan; Muscatine, Iowa; and Fremont, Ohio.Heinz Australia invested in increased tomato-processing capacity. In the Czech Republic, Heinz added equipment to improve infant formula production. Heinz India opened a research and development center. Heinz Italia upgraded its jarred baby food capacity to accommodate production for Spain. Heinz Venezuela invested in another tomato-processing facility. And Olivine in Zimbabwe built expanded storage and production capacity for its growing oil and soap businesses. Good weather led to high-yield and high-quality tomato and cucumber crops in the Midwest. The tomato crop in California met the company's requirements, despite extreme weather on the West Coast. Market ExtensionAs Heinz streamlined its worldwide operations through Project Millennia, it also strengthened its portfolio and market positions through acquisitions.Heinz Canada purchased the canned beans and pasta business of Nestlé Canada Inc. The company expanded its pet food business in Canada with the acquisition of Martin Feed Mills Limited, whose products are also exported to Japan and Europe. Heinz Australia added Southern Country Foods and Hugo Canning, leading producers and exporters of canned corned beef and related products. In a similar move, Wattie's acquired Shortland Cannery Ltd., New Zealand's largest producer of canned corned beef. Public ServiceHeinz employees again played significant and generous roles in helping their communities. The H.J. Heinz Company Foundation exemplified this commitment with $6.2 million in grants to 850 organizations.Heinz U.S.A., through its baby food label-saving program, donated more than $330,000 to 154 hospitals as a sponsor of the Children's Miracle Network Telethon. Ore-Ida raised more than $100,000 for Toys for Tots. Weight Watchers Gourmet Food Company donated $100,000 to combat breast cancer. Heinz Pet Products again supported the Homeless Homer label program, which benefits homeless pets. The Heinz Institute of Nutritional Sciences (HINS) conducted its annual symposium in China for physicians, government officials and consumers, and led two nutrition conferences in Russia. |
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