Kraft-Heinz Outsources Research to Cope with Rapidly Growing Savory Snacks Market

Kraft-Heinz’s recent deal to conduct research on fermented ingredients with APC Microbiome allows the company to take up new, novel flavors and formulations that are likely to appeal to experimental consumers. The company plans to outsource parts of its business model in this way, allowing it to focus on improving its supply chain, which was majorly disrupted by COVID-19, as well as work on direct-to-consumer (DTC) channels, says GlobalData.

Jim Toy, consumer analyst at GlobalData, comments: “This move by Kraft-Heinz means less time will be wasted on internally led and potentially dead-end research. Furthermore, by focusing on new innovations and sales strategies such as clean-label ingredient formulations and DTC channels, Kraft-Heinz will receive a much-needed competitive boost.”

With so many countries finding themselves back under lockdown conditions, consumers are bulk-buying savory snacks and condiments as they would with essential items such as water and bread. Notably, GlobalData’s forecasts reveal that the global savory snacks market is expected to rise from USD156.3bn in 2020 to USD183.8bn by 2023 – although growth will be slightly slower than initial pre-COVID predictions due to continued economic pressure that has lowered consumer confidence.

Toy continues: “Kraft-Heinz’ consumers are stockpiling non-perishable goods – particularly in the largest economic countries such as China and the US. GlobalData shows that at least 28% of consumers in the US have been buying more condiments and savory snacks since the onset of COVID-19 – while these rates are slightly higher in China, standing at 33% and 29%, respectively.

As a result of many foodservice chains shutting their doors, Kraft-Heinz is now looking to sell more products through business-to-business and DTC channels, as opposed to business-to-consumer. Although large divisions such as healthcare and public services will still require mass orders, the travel and tourism and restaurant sectors will be left out from Kraft-Heinz’s focus. Moreover, new products will be focused towards at-home consumption.

Toy adds: “By focusing on ingredient and formulation innovations via the APC Microbiome partnership, the company is able to better align with strengthening demand for ‘clean’ and ‘safe’ products that will resonate with consumers during these trying times.”