Kraft Heinz sees Latin America becoming its No. 2 market

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FILE PHOTO: A Heinz Ketchup bottle sits between a box of Kraft macaroni and cheese and a bottle of Kraft Original Barbecue Sauce on a grocery store shelf in New York

By Aluisio Alves

SAO PAULO – Kraft Heinz Co aims to double the pace of its sales growth in Latin America, making the region its second-largest global market within the next five years, the top regional executive of the packaged food maker told Reuters.

“We are investing in increasing the capacity of our factories in the region, which we see as the biggest engine of growth for the company in the coming years,” Bruno Keller said in an interview on Friday, without giving investment estimates or projected sales volumes in Latin America.

Chicago-based Kraft Heinz now considers the region its fourth-largest market outside the United States, behind Britain, Canada and Australia. Brazil is home to four of Kraft Heinz’s six Latin American factories, employing around 4,300 people.

Kraft Heinz, controlled by Berkshire Hathaway and the 3G fund, led by Brazilian entrepreneurs Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira, is diversifying offerings to serve different income groups in a region with some 650 million potential consumers, Keller said.

That has included the addition of cheaper brands, including the acquisition of local sauce manufacturer Hemmer for 1.2 billion reais ($251 million) in September.

Kraft Heinz is also battling inflationary pressure by launching packages in different sizes, such as a kilo of ketchup for customers who want to save money buying in bulk.

The company has also cut back on discount programs, while implementing cost-cutting to minimize passing on higher prices for ingredients and maritime freight.

Kraft Heinz continues to gain market share in Latin America, Keller said, without providing figures.

($1 = 4.7820 reais)

(Reporting by Aluisio Alves; Writing by Carolina Pulice; Editing by Will Dunham)