Major food company set to serve up US $1bn supply chain savings

Major global food company Heinz, based in the US, is “on track” to meet its USD$1 billion supply chain savings target over the next five years.

The company is set to deliver "better than $1bn in cost savings over the next five years through our global supply chain initiatives," according to Heinz' chairman, president and CEO William R. Johnson.

However Johnson warned of the impact of "dramatic" increases in food commodity prices.
"Our industry is experiencing dramatic increases in the cost of commodities like meat, dairy and grain, as well as packaging reflecting higher oil prices and decreased supply capacity," Johnson said.

"Fortunately, Heinz's input basket remains quite diversified, minimizing exposure to any single commodity. At Heinz, our goal is to effectively manage commodity costs while balancing the trade-off between pricing and productivity."

Previewing the financial results that Heinz will report on March 3, Johnson said the company expects to deliver organic growth of about 2%. Globally, its Top 15 brands generated organic sales growth of approximately 4%.

He added that the company expects organic growth in North America, Asia Pacific and Rest of World and to be "holding steady" in Europe.

The results were driven by continued "robust organic" growth of approximately 14% in Emerging Markets, led by China, India, Indonesia and Russia, and a solid performance in North American Consumer Products.

Read more here.