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Kraft Heinz looks to balance ‘renovation and innovation’ in portfolio

DJ O’Keefe, 12, and his sister Dallas O’Keefe, 13, both of Rochester, NY, pose for a photo with the Oscar Mayer Weiner Mobile at the annual Berkshire Hathaway shareholder meeting in Omaha, Nebraska, May 4, 2019.

Scott Morgan | Reuters

As Kraft Heinz tries to make its new customers stick around after the coronavirus pandemic, the company is rethinking its approach to how it responds to trends. 

“We need to make sure that going forward, we have the right balance of innovation and renovation,” Carlos Abrams-Rivera, Kraft Heinz’s head of U.S. business, said in an interview.

Shares of Kraft Heinz were up 1% in afternoon trading after the company presented its long-term turnaround plan to investors. As its blueprint is implemented, the company is projecting long-term organic sales growth of 1% to 2% and adjusted earnings per share growth of 4% to 6%.

In the past, according to Abrams-Rivera, Kraft Heinz would create small brands in response to new consumer trends. But its new strategy will focus on applying those insights to existing products, such as making its signature macaroni and cheese without gluten rather than kick-starting a new brand. New products and brands will be fewer but much larger than previously. 

“When you stand back, what you’re going to find is, we’re going to be more focused around 60% of growth coming from innovation and 40% on renovation,” Abrams-Rivera said.

Oscar Mayer is among the brands that will be receiving a face-lift after the company wrote down its value in the fourth quarter of 2018 and again in its most recent quarter. The hot dog brand’s planned renovation includes new packaging, simpler ingredient lists and marketing that focuses on its status as an iconic American brand. 

Beyond modernizing some of its brands, Kraft Heinz is also eliminating 1,100 products 

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6 Home Improvement Stocks to Spruce Up Your Portfolio

Home improvement companies are having a moment.

All around the country people remain locked up at home, staring at the same four walls day in and day out because of the pandemic. The desire to improve one’s home, the need for something new and the sheer monotony of remaining indoors all day have led to a surge of interest among consumers in home improvement projects. Do-it-yourself projects and renovations are on the rise around the country. Companies that can supply customers with everything they need to spruce up their homes are enjoying impressive gains as a result. In fact, all six of the companies on this list have enjoyed tremendous growth over the last few months — and the long-term tailwind of an improving housing market gives all six of these home improvement stocks an excellent opportunity to enjoy impressive returns well into the future.

Home Depot (ticker: HD)

Thanks to the huge number of homeowners looking to do a little renovating, Home Depot’s comparable store sales shot up 23.4% year over year in the second quarter. In fact, the second quarter was a blowout across the board; the company reported a 100% increase in digital sales, as well as a 10.1% increase in the average customer ticket. Online or offline, people are turning to Home Depot for their renovation needs more than ever, and buying more per transaction — that’s a winning combination for Home Depot and its shareholders. While Home Depot’s forward price-earnings ratio sits at a relatively high 24.7, investors shouldn’t fret, given the company’s recent performance and future prospects. A 2.13% dividend yield only makes an investment in Home Depot that much sweeter.

Lowe’s (LOW)

Unlike many companies on the market, Lowe’s has had an excellent 2020. Shares have risen nearly 40% year to date, hitting

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