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What Every Investor Needs to Know about Kraft Heinz: A Series Overview

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About the Kraft Heinz Company

The Kraft Heinz Company (KHC) is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world. The company has a presence in more than 45 countries, with a portfolio of more than 200 powerful and iconic brands, eight of which contribute to more than $1 billion of its total revenues. The company aims to provide high-quality, great taste, and nutrition for all eating occasions, whether at home, in restaurants, or on the go.

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A brief history of Kraft and Heinz

Kraft Heinz was formed through the merger of the publicly traded company Kraft Foods Group and the privately held company H.J. Heinz. The merger took place in July 2015, and the combined company, Kraft Heinz, is now co-headquartered in Pittsburgh and Chicago. The merger brought Heinz back onto the public market following its takeover two years ago by Berkshire Hathaway (BRK-B) and 3G Capital.

Kraft Foods Group was formed in October 2012 after Kraft Foods spun off into two publicly traded companies, international snack food company Mondelēz International (MDLZ) and North American grocery company Kraft Foods Group.

According to its fiscal 2014 pro forma income statement, the Kraft Heinz Company saw revenues of $29.1 billion. The two companies’ fiscal year 2014 ending dates are as follows:

  • Kraft Foods—December 27, 2014
  • H. J. Heinz—December 31, 2014

A sneak peek at Kraft Heinz’s stock and competitors

The Kraft Heinz Company’s shares started trading on the NASDAQ on July 6, 2015. As of December 29, 2015, Kraft Heinz’s stock had a market capitalization of $89.8 billion. The company is a component of the S&P 500 Index (SPY) and part of the Consumer Staples Select Sector SPDR ETF (XLP). Kraft Heinz constitutes 0.23% and 2.4% of SPY and XLP, respectively. Notably, food companies make up 18.5% of XLP’s portfolio while food and beverage companies combined make up 39.6% of XLP.

In this series, we’ll take a thorough look at Kraft Heinz’s business fundamentals and investment valuation, comparing the company’s performance to other giants in the industry like McCormick & Company (MKC), Hain Celestial Group (HAIN), Mondelēz, Keurig Green Mountain (GMCR), ConAgra Foods (CAG), Nestlé SA (NSRGY), General Mills (GIS), Pinnacle Foods (PF), and Campbell Soup Company (CPB).

But first, let’s take a look at the broader package food industry.

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