- Kraft Heinz launches a customizable sauce dispenser with over 200 possible combinations for restaurants.
- The company hopes to attract consumers looking for more variety, spice and sweetness in their sauces and to see what new seasonings to launch in grocery stores.
- Kraft Heinz is leaning on its away from home segment to drive sales as part of its broader turnaround strategy.
Presentation for distributor Heinz Remix
Source: Kraft Heinz
For more than 125 years, Heinz bottles have touted their “57 Variations,” a number entirely crafted by its founder with little to no real-world applications.
Now, Kraft Heinz wants to offer customers more than triple that number of condiment options with a new, customizable sauce dispenser, created for foodservice customers.
The machine, called the Heinz Remix, is the latest example of Kraft Heinz tending to its away from home segment to boost sales. The company expanded distribution at airports, launched a deluxe version of mayonnaise for chefs and reformulated Lunchables so they could be served at schools. In the first quarter, the North American foodservice division of Kraft Heinz reported sales growth of more than 25%.
The company will unveil the remix at the National Restaurant Association Showcase, which kicks off Saturday in Chicago. Plans to try the distributor out in restaurants as soon as the end of this year.
“We’re very, very clear that being away from home and food service gives us an opportunity to test, learn, understand and build trends much earlier than we’ve done historically,” said Peter Hall, President of Kraft Heinz North. American Food Services Division.
Hall said the company is still operating by the business model set for Heinz Remix. He said he is also looking into how the distributor uses drive-thru commands. But the machine requires more time and effort than tossing a handful of ketchup packets into a takeout bag, which is likely to be a challenge for speed-focused driving lanes.
To create a custom sauce, consumers will use the touch screen to select a base of either ketchup, ranch, 57 sauce, or BBQ sauce; adding “enhancers” that include jalapeños, smoked chipotle, buffalo, and mango; And set one of three intensity levels.
Alan Kleinerman, head of crafting at Kraft Heinz, told CNBC that his favorite combination is ranch dressing, with a heavy dose of jalapeño and a lighter soak of smoky chipotle. But he said the dark horse — mango ketchup — has been causing quite a stir around the Kraft Heinz office lately.
The company created Heinz Remix in just six months, with the help of the hands of Microsoft, hardware engineers, and IoT developers.
“We’ve been on this journey to make innovation the number one driver of growth in our business,” Kleinerman said. “To do that, we knew we needed to operate differently than we did in the past, think bigger, and be more consumer-centric.”
Owner Oscar Mayer is going through a turnaround after his previous management’s focus on cutting costs eroded sales in North America. Its troubles came to a head in 2019 when it disclosed $16.6 billion in writedowns on popular brands, such as Cool Whip and Kraft, and an SEC investigation into its accounts.
In the most recent quarter, Kraft Heinz reported that North American sales grew 6.2% as higher prices offset diminished demand from inflation-exhausted shoppers. Shares of Kraft Heinz are down 3% this year, giving it a market value of $48.5 billion. S&P 500 shares rose 7% at the same time.
While the Heinz Remix is new, its design feels familiar, thanks to its resemblance to the Coca-Cola Freestyle machine, which has been around for nearly 15 years.
Today, Coke’s touch-screen beverage dispensers can be found in more than 50,000 locations, including McDonald’s restaurants, AMC movie theaters, and Target stores.. Custom orders for customer favorites from Freestyle machines have inspired the beverage giant to introduce new bottled drinks, like Sprite Cherry and Coke with Cherry and Vanilla.
“They’ve shown the power of iteration and innovation when they get feedback,” Kleinermann said of Coca-Cola.
But he added that consumers and food service operators were the primary inspiration for Heinz Remix.
“I think it’s easy to draw parallels, but this was an opportunity born out of the original ideas that came out and our desire to change and build on the experience that consumers have today,” Kleinerman told CNBC.
Customers have been asking Kraft Heinz for spicier condiments or a mix of sweet and savory, while restaurant operators have told the company they want more variety, according to Kleinerman.
Like Coca-Cola, Kraft Heinz also plans to use data from its sauce distributor to decide which new products to release in grocery stores. The hope is that Heinz Remix will introduce new products that customers actually want, rather than ones they say they want – but never buy.
In recent years, Heinz has already released a number of seasonings inspired by the combination of its most popular sauces, including “mayochup,” “kranch,” and “buffaranch.”
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