What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-16 compared with 2022-02-17 · 81 added, 84 removed, 179 unchanged (48% of the section changed)

4 unchanged sentences

We leverage our scale and agility to unleash the full power of Kraft Heinz across a portfolio of six consumer-driven product platforms.

As global citizens, we’re dedicated to making a sustainable, ethical impact while helping feed the world in healthy, responsible ways.

As global citizens, we’re dedicated to making a sustainable, ethical impact while helping to feed the world in healthy, responsible ways.

On July 2, 2015, through a series of transactions, we consummated the merger of Kraft Foods Group, Inc.

4 unchanged sentences

Before the consummation of the 2015 Merger, Heinz was controlled by Berkshire Hathaway Inc.

(“Berkshire Hathaway”) and 3G Global Food Holdings, LP (“3G Global Food Holdings” and, together with its affiliates, “3G Capital”) (3G Capital together with Berkshire Hathaway, the “Sponsors”), following their acquisition of H.

(“Berkshire Hathaway”) and 3G Global Food Holdings, LP (“3G Global Food Holdings” and, together with its affiliates, “3G Capital”), following their acquisition of H.

Heinz Company on June 7, 2013 (the “2013 Heinz Acquisition”).

1 unchanged sentence

Unless the context requires otherwise, references to years and quarters contained herein pertain to our fiscal years and fiscal quarters.

Our 2021 fiscal year was a 52-week period that ended on December 25, 2021, the 2020 fiscal year was a 52-week period that ended on December 26, 2020, and the 2019 fiscal year was a 52-week period that ended on December 28, 2019.

Our 2022 fiscal year was a 53-week period that ended on December 31, 2022, our 2021 fiscal year was a 52-week period that ended on December 25, 2021, and our 2020 fiscal year was a 52-week period that ended on December 26, 2020.

Reportable Segments:

We manage and report our operating results through three reportable segments defined by geographic region:

United States, International, and Canada.

During the fourth quarter of 2021, certain organizational changes were announced that will impact our future internal reporting and reportable segments.

As a result of these changes, we plan to combine our United States and Canada zones to form the North America zone, and expect to have two reportable segments, North America and International.

We expect that any change to our reportable segments will be effective in the second quarter of 2022.

In the second quarter of 2022, our internal reporting and reportable segments changed.

We combined our United States and Canada zones to form the North America zone as a result of previously announced organizational changes, which are intended to advance and support our long-term growth plans by streamlining and synergizing our United States and Canada businesses.

Subsequently, we manage and report our operating results through two reportable segments defined by geographic region:

North America and International.

We have reflected this change in all historical periods presented.

See Note 20, Segment Reporting , in Item 8, Financial Statements and Supplementary Data , for our geographic financial information by segment.

COVID-19 Pandemic:

The ongoing spread of COVID-19 throughout the United States and internationally, as well as measures implemented by governmental authorities and private businesses in an attempt to minimize transmission of the virus (including social distancing mandates, shelter-in-place orders, vaccine mandates, and business restrictions and shutdowns) and consumer responses to such measures and the pandemic have had and continue to have negative and positive implications for portions of our business.

Though many areas have relaxed restrictions, varying levels remain throughout the world, are continuously evolving, and may be increased, including as a result of further outbreaks, resurgences, or the emergence of new variants.

We have been actively monitoring the impact of COVID-19 on our business.

In 2020, particularly in March and April, we experienced consolidated net sales growth as higher demand for our retail products more than offset declines in our foodservice business.

In 2021, we continued to experience strong retail demand compared to pre-pandemic periods.

However, retail consumption declined when compared to the comparable 2020 period based on the strong consumer demand early on in the COVID-19 pandemic, particularly in March and April 2020.

Beginning in the second quarter of 2021 and continuing through year end, our foodservice business experienced increased consumer demand compared to the comparable 2020 periods, which were negatively impacted by the COVID-19 pandemic.

However, we continue to see decreased foodservice demand in certain parts of our global business, including the United States and Canada, compared to pre-pandemic periods.

COVID-19 and its impacts are unprecedented and continuously evolving, and the long-term impacts to our financial condition and results of operations are still uncertain.

Trademarks and Intellectual Property:

4 unchanged sentences

Majority Owned and Licensed Trademarks

United States Kraft, Oscar Mayer, Heinz, Velveeta, Philadelphia, Lunchables, Capri Sun*, Ore-Ida, Maxwell House, Kool-Aid, Jell-O

International Heinz, ABC, Master, Kraft, Golden Circle, Quero, Plasmon, Wattie’s, Pudliszki

Canada Kraft, Philadelphia, Heinz, Classico, Maxwell House

North America Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Capri Sun*, Maxwell House, Ore-Ida, Kool-Aid, Jell-O

International Heinz, ABC, Master, Kraft, Quero, Golden Circle, Wattie’s, Plasmon, Pudliszki

*Used under license.

1 unchanged sentence

In 2022, brands used under licenses from third parties included Capri Sun packaged drink pouches for sale in the United States.

In addition, in our agreements with Mondelēz International, Inc.

(“Mondelēz”), following the spin-off of Kraft from Mondelēz in 2012, we each granted the other party various licenses to use certain of our and their respective intellectual property rights in named jurisdictions for certain periods of time.

We also grant certain licenses to third parties to use our intellectual property rights in select jurisdictions.

In 2021, in our agreements with an affiliate of Groupe Lactalis (“Lactalis”), related to the sale of certain assets in our global cheese business, we each granted the other party various licenses to use certain of our and their respective intellectual property rights in perpetuity, including perpetual licenses for the Kraft and Velveeta brands for certain cheese products.

7 unchanged sentences

We manufacture (and contract for the manufacture of) our products from a wide variety of raw materials.

We purchase and use large quantities of commodities, including dairy products, meat products, coffee beans, soybean and vegetable oils, sugar and other sweeteners, tomatoes, potatoes, corn products, wheat products, nuts, and cocoa products, to manufacture our products.

We purchase and use large quantities of commodities, including dairy products, meat products, soybean and vegetable oils, tomatoes, coffee beans, sugar and other sweeteners, other fruits and vegetables, corn products, wheat products, and potatoes, to manufacture our products.

In addition, we purchase and use significant quantities of resins, fiberboard, metals, and cardboard to package our products, and we use electricity, diesel fuel, and natural gas in the manufacturing and distribution of our products.

3 unchanged sentences

Where appropriate, we seek to establish preferred purchaser status and have developed strategic partnerships with many of our suppliers with the objective of achieving favorable pricing and dependable supply for many of our commodities.

The prices of raw materials that we use in our products are affected by external factors, such as global competition for resources, currency fluctuations, severe weather or global climate change, pandemics, consumer, industrial, or investment demand, and changes in governmental regulation and trade, tariffs, alternative energy, and agricultural programs.

In 2021, we experienced higher than expected commodity costs and supply chain costs, including logistics, procurement, and manufacturing costs, largely due to inflationary pressures.

We expect this cost inflation to remain elevated through at least 2022.

The prices of raw materials that we use in our products are affected by external factors, such as global competition for resources, currency fluctuations, severe weather or global climate change, pandemics, geopolitical conflicts, consumer, industrial, or investment demand, and changes in governmental regulation and trade, tariffs, alternative energy, and agricultural programs.

In 2022, we continued to experience higher commodity costs and supply chain costs, including procurement, logistics, and manufacturing costs, largely due to inflationary pressures.

We expect these costs to continue to increase and inflation to remain elevated through 2023.

Our procurement teams monitor worldwide supply and cost trends so we can obtain ingredients and packaging needed for production at competitive prices.

5 unchanged sentences

Our research and development efforts focus on achieving the following four objectives:

• product innovations, renovations, and new technologies to meet changing consumer needs and drive growth;

• product innovations, renovations, and new technologies to meet changing consumer needs, support our environmental and sustainability goals, and drive growth;

• world-class and uncompromising food safety, quality, and consistency;

• superior, customer-preferred product and package performance;

• continuous process improvement and product optimization in pursuit of cost reductions.

Our products are sold in highly competitive marketplaces, which have experienced increased concentration and the growing presence of e-commerce retailers, large-format retailers, and discounters.

• continuous process, product, and supply chain optimization.

Our products are sold in highly competitive marketplaces, which continue to experience increased concentration and the growing presence of e-commerce retailers, large-format retailers, and discounters.

Our competitors include large national and international food and beverage companies and numerous local and regional companies.

3 unchanged sentences

Sales and Customers:

Our products are sold through our own sales organizations and through independent brokers, agents, and distributors to chain, wholesale, cooperative and independent grocery accounts, convenience stores, drug stores, value stores, bakeries, pharmacies, mass merchants, club stores, foodservice distributors, and institutions, including hotels, restaurants, hospitals, health care facilities, and certain government agencies.

Our products are sold through our own sales organizations and through independent brokers, agents, and distributors to chain, wholesale, cooperative, and independent grocery accounts;

convenience, value, and club stores;

pharmacies and drug stores;

mass merchants;

foodservice distributors;

and institutions, including hotels, restaurants, bakeries, hospitals, health care facilities, and government agencies.

Our products are also sold online through various e-commerce platforms and retailers.

Our largest customer, Walmart Inc., represented approximately 22% of our net sales in both 2021 and 2020 and approximately 21% of our net sales in 2019.

Additionally, we have key customers in different regions around the world;

however, none of these customers are individually significant to our consolidated business.

In 2021, the five largest customers in our United States segment accounted for approximately 50% of United States segment net sales, the five largest customers in our International segment accounted for approximately 17% of International segment net sales, and the five largest customers in our Canada segment accounted for approximately 74% of Canada segment net sales.

We have key customers in different regions around the world.

In 2022, the five largest customers in our North America segment accounted for approximately 46% of North America segment net sales and the five largest customers in our International segment accounted for approximately 14% of International segment net sales.

Our largest customer, Walmart Inc., represented approximately 21% of our net sales in 2022 and approximately 22% of our net sales in each of 2021 and 2020.

Both of our segments have sales to Walmart Inc.

We manage our sales portfolio through six consumer-driven product platforms.

8 unchanged sentences

Net Sales by Platform:

In 2021, following the divestiture of certain of our global cheese businesses, we reorganized certain products within our platforms to reflect how we plan to manage our business going forward, including the role assigned to these products and platforms within our business.

We have reflected these changes in all historical periods presented.

Net sales by platform as a percentage of consolidated net sales for the periods presented were:

21 unchanged sentences

Our business operations, including the production, transportation, storage, distribution, sale, display, advertising, marketing, labeling, quality, and safety of our products and their ingredients, and our occupational safety, health, and privacy practices, are subject to various laws and regulations.

These laws and regulations are administered by federal, state, and local government agencies in the United States, as well as government entities and agencies outside the United States in markets where our products are manufactured, distributed, or sold.

In the United States, our activities are subject to regulation by various federal government agencies, including the Food and Drug Administration, Department of Agriculture, Federal Trade Commission, Department of Labor, Department of Commerce, and Environmental Protection Agency, as well as various state and local agencies.

We are also subject to numerous laws and regulations outside of the United States, including but not limited to laws and regulations governing food safety, health and safety, anti-corruption, and data privacy.

We are also subject to numerous laws and regulations outside of the United States in markets where our products are manufactured, distributed, or sold, including laws and regulations governing food safety, health and safety, anti-corruption, and data privacy.

In our business dealings, we are also required to comply with the U.S.

2 unchanged sentences

Trade Sanctions Reform and Export Enhancement Act, and various other anti-corruption regulations in the regions in which we operate.

We rely on legal and operational compliance programs, as well as in-house and outside counsel, to guide our businesses in complying with applicable laws and regulations of the countries in which we do business.

We rely on legal and operational compliance programs, as well as in-house and outside counsel, to guide our businesses in complying with applicable laws and regulations.

In addition, regulatory regime changes may add cost and complexity to our compliance efforts.

4 unchanged sentences

CERCLA imposes joint and several liability on each potentially responsible party.

We are involved in a number of active proceedings in the United States under CERCLA (and other similar state actions under similar legislation) related to certain closed, inactive, or divested operations for which we retain liability.

We are involved in a number of active proceedings in the United States under CERCLA (and other state actions under similar legislation) related to certain closed, inactive, or divested operations for which we retain liability.

As of December 31, 2022, we had accrued an amount we deemed appropriate for environmental remediation.

Based on information currently available, we believe that the ultimate resolution of existing environmental remediation actions and our compliance in general with environmental laws and regulations will not have a material effect on our earnings or financial condition.

Based on information currently available, we believe that the ultimate resolution of existing environmental remediation actions and our general compliance with environmental laws and regulations will not have a material effect on our earnings or financial condition.

However, it is difficult to predict with certainty the potential impact of future compliance efforts and environmental remedial actions and, thus, future costs associated with such matters may exceed current reserves.

4 unchanged sentences

They represent the expectations we have for ourselves and the environment we aspire to create for our Company.

Our Board of Directors (“Board”), through the Compensation Committee, oversees our human resources strategy and key policies.

Our people are at the heart of who we are at Kraft Heinz.

We drive growth through development opportunities, career ownership, and autonomy and recognize and reward outstanding performance at every level, creating a true spirit of meritocracy.

We strive to channel our employees’ passion, curiosity, and attitude to make an impact on our future and our legacy by leading as learners, acting as owners, and being change agents.

Our Board of Directors (“Board”), through the Human Capital and Compensation Committee, oversees our human resources strategy, key policies, and our 2025 diversity, inclusion, and belonging aspirations.

Engagement and Retention:

1 unchanged sentence

As of December 31, 2022, Kraft Heinz had approximately 37,000 employees globally.

Driven by our Value We champion great people , we are committed to supporting our employees’ health, safety, and professional development and to rewarding outstanding performance at every level.

Our compensation, benefits, recognition, and LiveWell programs are designed to attract and retain highly skilled talent, meet individual and family needs, and inspire, celebrate, and engage our people and teams through active listening channels.

Guided by our Values, we conduct a global engagement survey annually to provide our employees with an opportunity to share anonymous feedback with management across a variety of topic areas.

Leaders review the results to help determine where changes are needed to support our people and teams.

Driven by our Value We champion great people , we support our employees’ health, safety, and professional development and reward outstanding performance at every level.

Our compensation, benefits, recognition, and LiveWell programs are designed to attract and engage highly skilled talent, meet individual and family needs, and inspire, celebrate, and engage our people and teams through active listening channels.

Guided by our Values, we conduct a global engagement survey annually to provide employees with an opportunity to share anonymous feedback with management across a variety of topic areas.

The results, and comments are reviewed by the Board, senior leadership, managers, and human resources to help determine where changes are needed to support our people and teams.

Wellbeing and Safety:

Our employees’ health, safety, and wellbeing are of the utmost importance.

Our employees’ health, safety, and wellbeing are a top priority.

We establish and administer company-wide policies and processes to protect the health, safety, and security of our employees, subcontractors, and all those who visit our facilities, and to comply with applicable regulations.

We review and monitor our performance closely to drive continuous improvement.

In 2021, our Total Recordable Incident Rate (“TRIR”) was 0.62 globally.

To help us evaluate how effective our safety efforts are in lowering incidents rates, we use a Total Recordable Incident Rate (“TRIR”).

TRIR is a medical incident rate based on the U.S.

Occupational Safety and Health Administration (OSHA) record-keeping criteria (injuries per 200,000 hours).

In response to the emergence of COVID-19 in early 2020, we provided enhanced benefits and implemented additional workplace safety programs and processes in all our manufacturing facilities, many of which have continued through 2021.

In 2021, we also began a limited return to office for our global office populations with heightened in-office health and safety protocols that followed local regulations.

As the circumstances and impacts of COVID-19 continue to evolve, we regularly evaluate our response to adapt and protect the health and safety of our employees, while supporting consumers and our communities.

Our TRIR globally was 0.53 in 2022 and 0.62 in 2021.

Our global LiveWell program addresses physical, emotional, financial, and social health and wellbeing.

We have continued to champion the LiveWell program’s holistic approach to wellbeing in response to COVID-19 with enhanced programs, including healthcare benefits, disability, and employee assistance initiatives.

Diversity, Inclusion, and Belonging:

We champion the LiveWell program’s holistic approach to wellbeing with enhanced programs, including healthcare benefits, disability, and employee assistance initiatives.

Diversity, Equity, Inclusion, and Belonging:

We live our Value of We demand diversity by focusing on three strategic areas:

hiring and growing talent from diverse backgrounds and perspectives, developing inclusive leaders, and tracking and reporting our progress.

Our Global Inclusion Council has been established to create strategic accountability for results.

It also provides governance and oversight of reporting on diversity efforts and initiatives.

The Council is comprised of executive leaders and members of the Board.

In 2021, we shared our 2025 diversity, inclusion, and belonging aspirations, which include that 50% of our global management positions be filled by women and 30% of our salaried U.S.

6 unchanged sentences

• 80% of our Executive Leadership Team identified as people of color.

*This figure does not include employees that joined the Company as part of acquisitions that closed in the fourth quarter of 2021, which represent approximately 1% of our total employees globally as of December 25, 2021.

As we work to meet our 2025 aspirations, we are focused on:

6 unchanged sentences

These offerings enable employees to execute with excellence in their roles, accelerate their learning curves, and grow great careers through continuous learning.

With Ownerversity’s targeted platforms, our employees can focus on timely and topical development areas including leadership, management excellence, functional capabilities, and diversity, inclusion, and belonging.

With Ownerversity’s targeted platforms, employees can focus on timely and topical development areas including leadership, management excellence, functional capabilities, and diversity, equity, inclusion, and belonging.

In 2022, our global women’s accelerator program, The WE Network, won a Brandon Hall Gold Award for Best Advance in Leadership Development for Women.

Rewards and Compensation:

Our Total Rewards philosophy is designed to provide an array of meaningful and flexible programs for our diverse workforce.

Our reward programs complement our strategy and Values and enable us to attract and retain qualified individuals.

They are market competitive and data-driven to preserve our high-performance and results-oriented culture.

Our Total Rewards strategy is designed to provide an array of meaningful and flexible programs for our diverse workforce.

Total Rewards includes compensation elements of salary and wages and incentives, healthcare, savings and insurance plans, wellbeing plans, employee recognition programs, and other voluntary elected benefits.

We aim for global consistency while respecting local market practices.

The plans are designed to be market competitive and data-driven to promote our high-performance and results-oriented culture and realize our Purpose to Make Life Delicious for employees and their families.

Ethics and Transparency:

In 2021, we renamed the Kraft Heinz Ethics Hotline to the Kraft Heinz Ethics Helpline and continued to expand access to our partners, suppliers, customers, and consumers to ask questions or report potential violations of various policies and ethical guidelines, including our human rights policies in our Supplier Guiding Principles and our code of conduct.

The Kraft Heinz Ethics Helpline is available to our partners, suppliers, customers, and consumers to ask questions or report potential violations of various policies and ethical guidelines, including our Code of Conduct, Supplier Guiding Principles, and Global Human Rights Policy.

We report more detailed information regarding our programs and initiatives related to our people and human capital management in our Environmental Social Governance Report (“ESG Report”).

Our 2021 ESG Report is available on our website at www.kraftheinzcompany.com/esg .

Our 2022 ESG Report, which provides our progress through 2021, is available on our website at www.kraftheinzcompany.com/esg .

The information on our website, including our ESG Report, is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the Securities and Exchange Commission (“SEC”).

3 unchanged sentences

Miguel Patricio,

Chief Executive Officer and Director

55 Chief Executive Officer (since June 2019) and Director (since May 2021).

Chief of Special Global Projects–Marketing (January 2019 to June 2019) and Chief Marketing Officer (2012 to December 2018) at

Anheuser-Busch InBev SA/NV (“AB InBev”), a multinational drink and brewing holdings company.

Paulo Basilio,

Chief Executive Officer and Chair of the Board

56 Chief Executive Officer (since June 2019);

Chair of the Board (since May 2022);

Director (May 2021 to May 2022);

Zone President (July 2019 to February 2020).

Chief of Special Global Projects–Marketing (January 2019 to June 2019) and Chief Marketing Officer (2012 to December 2018) at Anheuser-Busch InBev SA/NV (“AB InBev”), a multinational drink and brewing holdings company.

Andre Maciel,

Executive Vice President and Global Chief Financial Officer

47 Executive Vice President (since December 2021) and Global Chief Financial Officer (since September 2019);

Chief Business Planning and Development Officer (July 2019 to September 2019);

President of the U.S.

Commercial Business (October 2017 to June 2019);

and Executive Vice President and Chief Financial Officer (2015 to October 2017).

Partner (since 2012) of 3G Capital.

48 Executive Vice President and Global Chief Financial Officer (since March 2022);

Senior Vice President, U.S.

Chief Financial Officer, and Head of Digital Transformation (September 2019 to March 2022);

Managing Director, Continental Europe (January 2019 to August 2019);

Chief Financial Officer, U.S.

(2017 to January 2019);

and Head of U.S.

Commercial Finance (2015 to 2017).

Carlos Abrams-Rivera,

6 unchanged sentences

55 Senior Vice President (since December 2021) and Global Chief Communications Officer (since July 2021).

Senior Vice President, Global Communications (May 2017 to July 2021) at Hyatt Hotels Corporation, a global hospitality company.

Executive Vice President and General Manager, US Food Sector Lead (2014 to May 2017) at Edible, Inc., a subsidiary of Daniel J.

Edelman, Holdings Inc., a global communications and marketing firm.

Senior Vice President, Global Communications (2017 to July 2021) at Hyatt Hotels Corporation, a global hospitality company.

Rashida La Lande,

Executive Vice President, Global General Counsel, and Chief Sustainability and Corporate Affairs Officer

Corporate Secretary

49 Executive Vice President, Global General Counsel, and Chief Sustainability and Corporate Affairs Officer (since December 2021);

Corporate Secretary (since January 2018);

Corporate Secretary (since January 2018 to May 2022);

Head of ESG (formerly CSR) and Government Affairs (October 2018 to December 2021);

13 unchanged sentences

and President of Kraft Heinz Australia, New Zealand, and Papua New Guinea (2014 to 2016).

Flavio Torres,

Flávio Barros Torres,

Executive Vice President and Global Chief Supply Chain Officer

1 unchanged sentence

and Head of Global Operations (January 2020 to December 2021).

Global Operations Vice President (2017 to 2019) at AB InBev.

Vice President Supply Global (2017 to 2019) at AB InBev.

Melissa Werneck,

2 unchanged sentences

and Head of Global Human Resources, Performance and Information Technology (2015 to 2016).

Patricio also invests in the 3G Kraft Heinz Company Holdings LP (the “Fund”), which is affiliated with 3G Capital.

His investment represents less than 1% of the Fund’s assets.

In January 2022, we announced Mr.

Basilio would step down as Global Chief Financial Officer, effective March 2, 2022, at which time Andre Maciel, our current Senior Vice President and U.S.

Chief Financial Officer and Head of Digital Transformation, will become Executive Vice President and Global Chief Financial Officer.

Senior Vice President, Global Head of Corporate Development;

Global Treasurer

43 Senior Vice President, Global Head of Corporate Development, and Global Treasurer (since March 2022);

Global Head of Treasury and M&A (April 2021 to March 2022);

and Senior Vice President, Global Treasurer, and Head of Global Business Excellence (July 2020 to April 2021).

Senior Director, Corporate Treasury and Risk Management at Whirlpool Corporation, a major home appliance company (2016 to April 2018).

Available Information

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business