Heinz to focus on core brands to drive European growth

LONDON - Heinz in Europe is planning to focus on strengthening three core product areas -- Ketchup, Condiments & Sauces; Meals & Snacks; and Infant Nutrition -- by developing new products, recipes and packaging as it considers the sell-off of other non-core brands, including John West.

The focus on the three core areas follows the opening earlier this week of a new Global and Innovation Centre at its headquarters in Pittsburgh and the promise to spend $100m (£55.3m) on US marketing alone.

The strategy in Europe replicates the company's model of what it calls "focused growth" in the US and Australasia.

More than 100 chefs, nutritionists and researchers will be behind the product development in Heinz's three core categories, which represents approximately $3bn in sales and represents one-third of global revenue.

The company is also in talks with investment banks regarding potential divestitures of non-core businesses, representing approximately $1.4bn of annual sales.

These include seafood, vegetable and frozen businesses in Europe --including the Petit Navire, John West and Hak brands and the Tegal poultry business.

Heinz chairman, president and chief executive officer William R Johnson, said "Heinz is becoming an even more attractive investment opportunity as we focus on three strong categories where we have the consumer expertise, the leading brands and operational capabilities to generate stronger and higher quality growth in profits and sales."

The company is looking to further the success of its model of focused growth in North America and Australasia by extending it to Europe and to the fast-growing marketing of China, India, Russia and Indonesia.

The company has suspended advertising following its acquisition of Lea & Perrins and HP Foods in a £470m deal.

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