Volumes at Heinz have nosedived further as higher prices put off cash-strapped shoppers, but the ketchup and baked beans giant expects to see a turnaround in 2024 as inflation continues to ease.
Newly filed UK accounts this week revealed a 12% fall in volumes in 2023, on top of a 5% drop in the previous year.
Heinz said in the Companies House documents that the decline was mainly driven in the meals and sauces category as the business pushed up prices to offset “significant” cost inflation of 18%.
Rising prices previously led to Heinz publicly falling out with Tesco in 2022, pulling products from shelves after the retailer called requested hikes “unjustifiable”.
Heinz insisted all price increases pushed through were always below inflation. The latest accounts showed the company has faced cost inflation since 2019 in excess of 51%.
“We are continuing to see a slight inflationary trend in main commodities, notable tomato, offset partly by a robust efficiency-driven operations plan,” Heinz said in the accounts.
Revenues in the 52 weeks to 30 December 2023 totalled £967.1m, compared with £899.7m in a 53-week period in the prior year – an increase of 7.5%.
Pre-tax profits were hit by one-off exceptional items of £48.4m as the group wrote off debt – as well as having one less trading week year on year – resulting in the bottom line tumbling 35% to £104.1m
A Kraft Heinz spokeswoman told The Grocer its brands had “performed well” in 2023.
“This can be attributed to extensive reinvestment in marketing and into promotional activities to help shoppers see greater savings at checkout,” she said.
The strategic report in the accounts predicted volumes would return to growth in 2024 thanks to the investments in price and marketing in the second half of last year, as well as innovation acceleration for core and adjacent categories.
So far this year, Heinz has expanded its range of pasta sauces with a trio of variants inspired by TikTok trends and, more controversially, launched a spaghetti carbonara in a can.
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