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Kraft Heinz Reduces Production at 3 Factories, But Increases Output of Macaroni and Cheese

By Eric Volkman – Updated Apr 6, 2020 at 5:17PM

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There's nothing like packaged nostalgia during a pandemic.

In these days of lockdown due to the fast-spreading SARS-CoV-2 coronavirus, it seems American consumers are reaching for familiar packaged comfort foods -- such as Kraft Heinz's (KHC 1.21%) classic macaroni and cheese.

The food giant's CEO Miguel Patricio said in a presentation Friday that his company was halting production in three of its factories manufacturing restaurant supplies. Kraft Heinz later amended his remarks to say that production has been "significantly reduced," not stopped entirely.

An ad for Kraft Big Bowl Macaroni & Cheese.

Image source: Kraft Heinz.

The reduction comes amid notably weakened demand for such products due to closures and "stay at home" mandates. At the same time, though, with demand rising for packaged food goods such as the company's popular brand of macaroni and cheese, Kraft Heinz has ramped up production of these offerings at other facilities to meet the recent surge.

Of the three factories having their output reduced, two are located in the U.S. and one is in the U.K. The company said that, in terms of its packaged products, American consumers particularly like the macaroni and cheese. In the U.K., tastes run more toward canned goods such as beans and soups.

"We feel that people are seeking more comfort food at this moment, as they seek some other ways to feel pleasure," he said of the recent trend.

The turn to packaged foods benefits Kraft Heinz, as this has been a company strength for many years. In recent times it has struggled, however, as younger consumers have shown a preference for fresher and healthier foods from comestibles producers.

That said, on Friday Kraft Heinz's shares bucked the overall bearish trend of the market and many of its top stocks, rising by almost 2.8% on the day.

 

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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