What changed in this filing

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Item 1. Business

2025-02-13 compared with 2024-02-15 · 79 added, 90 removed, 173 unchanged (49% of the section changed)

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With 2024 net sales of approximately $26 billion, we are committed to growing our iconic and emerging food and beverage brands on a global scale.

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

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

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

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Reportable Segments:

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

North America and International.

During the fourth quarter of 2023, certain organizational changes were announced that are expected to impact our future internal reporting and reportable segments.

We expect to divide our International segment into three operating segments — Europe and Pacific Developed Markets (“EPDM” or “International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”) — in order to enable enhanced focus on the different strategies required for each of these regions as part of our long-term strategic plan.

As a result of these changes, we expect to have two reportable segments:

In the first quarter of 2024, we divided our International segment into three operating segments — Europe and Pacific Developed Markets (“EPDM” or “International Developed Markets”), West and East Emerging Markets (“WEEM”), and Asia Emerging Markets (“AEM”) — to enable enhanced focus on the different strategies required for each of these regions as part of our long-term strategic plan.

Subsequently, we manage our operating results through four operating segments.

We have two reportable segments defined by geographic region:

North America and International Developed Markets.

We anticipate that our remaining operating segments, consisting of WEEM and AEM, will be combined and disclosed as Emerging Markets.

We expect that the change to our reportable segments will be effective in the first quarter of 2024.

Our remaining operating segments, consisting of WEEM and AEM, are combined and disclosed as Emerging Markets.

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

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

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

International Developed Markets

Heinz, Golden Circle, Wattie’s, Plasmon

Emerging Markets (a)

Heinz, ABC, Master, Quero, Kraft, Pudliszki

(a) Emerging Markets represents the aggregation of our WEEM and AEM operating segments.

*Used under license.

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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.

In our agreements with an affiliate of Groupe Lactalis (“Lactalis”), we 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.

We also own numerous patents worldwide.

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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, tomato products, soybean and vegetable oils, sugar and other sweeteners, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables 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.

For commodities that we use across many of our product categories, such as corrugated paper and energy, we coordinate sourcing requirements and centralize procurement to leverage our scale.

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

In addition, we purchase and use significant quantities of plastics, cardboard, resin, glass, and metal to package our products, and we use electricity, diesel fuel, and natural gas in the manufacturing and distribution of our products.

For commodities that we use across many of our product categories we coordinate sourcing requirements and centralize procurement to leverage our scale.

In addition, some of our product lines and brands separately source raw materials that are specific to their operations.

We source these commodities from a variety of providers, including large, international producers and smaller, local, independent sellers.

We source these commodities from a variety of providers, ranging from large, international producers to smaller, local, independent sellers.

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, geopolitical conflicts, consumer, industrial, or investment demand, and changes in governmental regulation and trade, tariffs, alternative energy, and agricultural programs.

In 2023, we continued to experience higher commodity costs and supply chain costs, including manufacturing, procurement, and logistics costs largely due to inflationary pressures concentrated in the first half of the year.

In 2024, we experienced moderate inflation in our supply chain costs compared to the prior year period, which we expect to continue through 2025.

While inflationary pressures within procurement, manufacturing, and logistics costs had a negative impact on our results of operations, we experienced increased stability of these costs as compared to the prior year period.

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

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• superior, consumer-preferred product and package performance;

• 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.

• continuous process, product, and supply chain optimization and productivity initiatives.

Our products are sold in highly competitive marketplaces, including 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.

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We compete on the basis of product innovation, price, product quality, nutritional value, service, taste, convenience, brand recognition and loyalty, effectiveness of marketing and distribution, promotional activity, and the ability to identify and satisfy changing consumer preferences.

Improving our market position or introducing new products requires substantial advertising and promotional expenditures.

Improving our market position or introducing new products requires substantial advertising, promotional, and research and development expenditures.

Sales and Customers:

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We have key customers in different regions around the world.

In 2023, 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 2023 and 2022, and approximately 22% of our net sales in 2021.

Both of our segments have sales to Walmart Inc.

As of December 30, 2023, we manage our sales portfolio through six consumer-driven product platforms.

A platform is a lens created for the portfolio based on a grouping of real consumer needs and includes the following for Kraft Heinz:

Taste Elevation, Fast Fresh Meals, Easy Meals Made Better, Real Food Snacking, Flavorful Hydration, and Easy Indulgent Desserts.

In 2024, the five largest customers in our North America segment accounted for approximately 46% of North America segment net sales, the five largest customers in our International Developed Markets segment accounted for approximately 28% of International Developed Markets net sales, and the five largest customers in Emerging Markets accounted for approximately 12% of Emerging Markets net sales.

Our largest customer, Walmart Inc., represented approximately 21% of our net sales in 2024, 2023, and 2022.

Both of our reportable segments have sales to Walmart Inc.

In the first quarter of 2024, we changed the way we manage our product portfolio to align with our future growth strategy.

As of December 28, 2024, we manage our sales portfolio through eight consumer-driven product platforms.

A platform is a lens created for the portfolio based on a grouping of consumer needs and includes the following for Kraft Heinz:

Taste Elevation, Easy Ready Meals, Substantial Snacking, Desserts, Hydration, Cheese, Coffee and Meats.

Taste Elevation includes condiments, sauces, dressings, and spreads.

Easy Ready Meals includes Kraft Mac & Cheese varieties, frozen potato products, and other frozen meals.

Substantial Snacking includes Lunchables meal kits, frozen snacks, and pickles.

Desserts includes dry packaged desserts, refrigerated ready to eat desserts, and other dessert toppings.

Hydration includes ready to drink beverages, powdered beverages, and liquid concentrates.

Cheese includes American sliced and recipe cheeses.

Coffee includes mainstream coffee, coffee pods, and premium coffee.

Meats includes cold cuts, bacon, and hot dogs.

The platforms are modular and configurable by reportable segment and market and help us to manage and organize our business effectively by providing insight into our various product categories and brands.

Further, each platform is assigned a role within our business to help inform our resource allocation and investment decisions, which are made at the reportable segment level.

These roles include:

Grow, Energize, and Stabilize.

Further, each platform is assigned a role within our business to help inform our resource allocation and investment decisions, which are made at the operating segment level.

These roles include Accelerate, Protect, and Balance.

The role of a platform may also vary by reportable segment and market.

We are currently evaluating our existing platforms and roles and anticipate changes to align with our future growth strategy.

Net Sales by Platform:

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Taste Elevation 44 % 44 % 41 %

Fast Fresh Meals 22 % 23 % 25 %

Easy Meals Made Better 20 % 20 % 19 %

Real Food Snacking 5 % 5 % 7 %

Flavorful Hydration 7 % 8 % 7 %

Easy Indulgent Desserts 4 % 4 % 4 %

Easy Ready Meals 18 % 18 % 19 %

Substantial Snacking 5 % 5 % 6 %

Desserts 4 % 4 % 4 %

Hydration 9 % 9 % 9 %

Cheese 7 % 7 % 7 %

Coffee 3 % 3 % 3 %

Meats 8 % 8 % 9 %

Other 2 % 2 % 2 %

Net Sales by Product Category:

The product categories that contributed 10% or more to consolidated net sales in any of the periods presented were:

December 30, 2023 December 31, 2022 December 25, 2021

Condiments and sauces 34 % 31 % 28 %

Cheese and dairy 14 % 15 % 19 %

Ambient foods 11 % 12 % 11 %

Frozen and chilled foods 11 % 11 % 10 %

Meats and seafood 9 % 10 % 10 %

Although crops constituting certain of our raw food ingredients are harvested on a seasonal basis, the majority of our products are produced throughout the year.

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Human Capital Management

We are driven by our Purpose, our Vision— To sustainably grow by delighting more consumers globally , and our Values— We are consumer obsessed , We dare to do better every day , We champion great people , We demand diversity , We do the right thing , and We own it .

We recognize that a strong company culture is vital to our overall success.

Our Purpose, Vision, and Values are the foundation upon which our culture is built.

We are driven by our Purpose– Let’s make life delicious , our Company Dream— To be the leader in elevating and creating food that makes you feel good, and our Values and Leadership Principles.

Those elements represent the foundation upon which our culture is built.

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

We recognize that our ownership-centric culture is vital to our overall success and a key competitive advantage.

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

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

We drive growth through high accountability, development and career opportunities, empowerment, and autonomy.

We recognize and reward outstanding and differentiated performance at every level, creating a true spirit of ownership, ambition, and 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 Inclusion:

We are committed to attracting, developing, and retaining diverse, world-class talent and creating an engaging and inclusive culture that embodies our Purpose, Vision, and Values.

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

We are committed to attracting, developing, and retaining world-class talent and creating an engaging and inclusive culture that embodies our Purpose, Dream, Values, and Leadership Principles.

As of December 28, 2024, Kraft Heinz had approximately 36,000 employees globally.

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

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

Our rewards strategies (compensation, benefits, recognition, and wellbeing) aim to help our employees help themselves to LiveWell.

LiveWell represents our total rewards offerings that are designed to attract and engage highly skilled talent, meet individual and family needs, and inspire, celebrate, and engage our people and teams through enhanced interactions in moments that matter in an environment where employees feel productive, trusted, and empowered.

LiveWell represents our total rewards offerings that are designed to attract and engage highly skilled and performance-oriented talent, meet individual and family needs, and inspire, celebrate, and engage our people and teams through enhanced interactions in moments that matter in an environment where employees feel productive, trusted, and empowered.

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.

Diversity, inclusion, and belonging are key drivers for engagement.

For us, it also means having our diverse consumer base represented in our workforce and included in relevant business decisions.

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 Business Resource Groups (BRGs) are employee-led, multi-functional groups based upon shared common interests.

They help foster an engaged and inclusive environment where all talent grows and thrives, create a network of support for employees, and serve as a resource for the organization on topics related to their focus area.

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.

We have 2025 diversity, equity, inclusion, and belonging (“DEI&B”) aspirations that have shaped some of our guiding principles.

Our long-term ambition is to have demographic parity in the countries in which we operate and to be recognized as a top quartile company in inclusion.

Our aspirations include that 50% of our global management positions be filled by women and 30% of our salaried U.S.

employee population identify as people of color.

Our DEI&B efforts have continued to be expanded as part of our multi-year strategy.

Each day, we are working to create a healthier, more equitable global workplace and world.

As of December 30, 2023:

• 43% of employees in global management positions identified as women;

• 29% of salaried employees in the U.S.

identified as people of color;

• 33% of our Executive Leadership Team identified as women;

• 78% of our Executive Leadership Team identified as people of color.

As we progress on our 2025 aspirations, we are focused on:

• Hiring, Investing in, and Growing Talent from Diverse Backgrounds and Perspectives through expanded recruiting partnerships with Historically Black Colleges and Universities, diverse professional organizations, and training in our hiring process to reduce bias and promote equal employment opportunities.

• Developing Inclusive Leaders through an interactive learning experience for managers on interrupting bias in our Organizational People Review process and their role in creating an inclusive environment.

• Tracking and Reporting Our Progress year over year through oversight by the Kraft Heinz Global Inclusion Council.

Our November 2024 survey showed that we hit an all-time high for employee engagement since the 2015 Merger and achieved our aspiration to rank in the top-quartile on the Inclusion Index, which measures employees feeling like their opinions count, belonging and inclusive leadership.

We believe our culture is the secret sauce that sets us apart and drives our success.

It is the key ingredient that unites us as a Community of Owners, fosters a sense of belonging, and inspires us to lead the future of food.

It is the foundation of our employee value proposition.

We grow our people to grow our business.

Our Employee Value Proposition is built on three core pillars:

• We develop people for greatness, unlocking their full potential through continuous learning and growth opportunities.

• We nurture an ownership-centric culture, encouraging people to act with autonomy and treat our business as their own.

• We drive impact by challenging the status quo, celebrating differences, and sparking innovation in pursuit of leading the future of food.

Over the past decade, we have been on a journey to create a workplace that resembles the consumers that we serve and provide delicious innovations that better serve our people, business, and communities.

We have made significant progress, learned a lot, and plan to build on our successes as we set the table for the future.

Wellbeing and Safety:

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

Our TRIR globally was 0.53 in 2023 and 2022.

Our TRIR globally was 0.39 in 2024 and 0.53 in 2023.

Our global LiveWell program focuses on four wellbeing elements — physical, emotional, financial, and social health — and provides specific programs and resources to support our employees and their families within each of these areas.

Learning and Development:

Through Kraft Heinz Ownerversity, we provide learning opportunities for each of our employees, designed to inspire and grow talent within Kraft Heinz while developing employees’ capabilities to help them navigate their career journey.

Through Ownerversity, our Kraft Heinz learning ecosystem, we provide learning opportunities for each of our employees, designed to inspire and grow talent within Kraft Heinz while developing employees’ skills and competencies to help them navigate their career journey.

Our learning and development offerings are created to enable employees to live our Value We dare to do better every day and own their personal learning and development.

We believe this empowers employees to execute with excellence in their current role, accelerate their learning curve, and grow a great career.

We believe this empowers employees to execute with excellence in their current role, accelerate their learning curves, and grow a great career.

Through Ownerversity, employees have access to custom Kraft Heinz training, learning and development materials, and external content libraries and articles.

Rewards and Compensation:

Our Total Rewards philosophy is to provide a meaningful and flexible spectrum of programs that equitably support our diverse workforce and their families.

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.

Our Total Rewards philosophy is to provide a meaningful and flexible spectrum of programs that equitably support our workforce and their families, and compliment Kraft Heinz’ strategy and values.

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

Kraft Heinz is a great place for those who dare to win in a challenging, meritocratic, ambitious, and engaging environment.

We believe in ownership and meritocracy, recognizing and rewarding our people on their achievements and impact as they grow their careers with us.

We aim for global consistency while respecting local market practices and employee preferences.

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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 2023 ESG Report, which provides our progress through 2022, is available on our website at www.kraftheinzcompany.com/esg .

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

Our 2024 report, which provides our progress through 2023, 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”).

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Head of Portfolio Transformation, Mars Wrigley (January 2019 to September 2020) at Mars, Incorporated, a multinational confections company.

Rashida La Lande,

Executive Vice President and Chief Legal and Corporate Affairs Officer

50 Executive Vice President and Chief Legal and Corporate Affairs Officer (since December 2023);

Executive Vice President, Global General Counsel, and Chief Sustainability and Corporate Affairs Officer (December 2021 to December 2023);

Corporate Secretary (2018 to May 2022);

Senior Vice President, Global General Counsel and Head of ESG (formerly CSR) and Government Affairs (2018 to December 2021);

and Senior Vice President and Global General Counsel (2018).

Marcos Eloi Lima,

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

Executive Vice President, Global General Counsel and Corporate Affairs Officer

54 Executive Vice President, Global General Counsel and Corporate Affairs Officer (since November 2024);

and Vice President, General Counsel and Secretary (January 2019 to November 2024) at Sealed Air Corporation, a global provider of packaging solutions.

Available Information

Our website address is www.kraftheinzcompany.com .

The information on our website 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 SEC.

We use our investor relations website, ir.kraftheinzcompany.com, as a routine channel for distribution of important, and often material, information about Kraft Heinz, including quarterly and annual earnings results and presentations, press releases and other announcements, webcasts, analyst presentations, investor days, sustainability initiatives, financial information, and corporate governance practices, as well as archives of past presentations and events.

We encourage you to follow our investor relations website in addition to our filings with the SEC to receive timely information about the Company.

The information on our website is not part of this Annual Report on Form 10-K and shall not be deemed to be incorporated by reference into this report or any other filings we make with the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), are available free of charge on our website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.

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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