Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Where's the fake beef? Not at Kraft Heinz, investors worry

Stock MarketsSep 12, 2019 07:16AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

By Richa Naidu and Siddharth Cavale

CHICAGO (Reuters) - Investors are chewing out Kraft Heinz Co (O:KHC) for failing to lay out a full strategy for how it plans to compete in the roughly $3 billion-a-year plant-based protein market.

At the Kraft Heinz annual meeting to be held in Pittsburgh on Thursday, shareholders will vote on a proposal asking the company to reveal its long-term strategy for imitation meat and alternative proteins.

Products by rivals Beyond Meat Inc (O:BYND) and Impossible Foods have become the hottest food trend in recent years, gaining popularity among mainstream consumers looking to cut back on meat consumption.

"It's a fast-growing market and they've been really silent with investors on how they plan to tackle that," said Kyle Kempf, a spokesman for Green Century Funds, which proposed the proxy vote and owns a more than $460,000 stake in Kraft Heinz.

Kraft Heinz has been ranked one of the least proactive major food makers in the plant-based protein market, according to FAIRR, a major investor coalition that includes several Kraft Heinz shareholders. The company's main meat-alternative brand, 40-year-old BOCA Burger, has lost market share since 2013.

"Any company ranking at the bottom clearly has some catching up to do," said Peter van der Werf, head of responsible investment management at Robeco, which owns an $9.6 million stake in Kraft Heinz.

Robeco and another Kraft Heinz investor, NN Investment Partners, told Reuters they were inclined to support the investor demand that Kraft Heinz cough up more specifics about its alternative-protein strategy. Neither company would disclose whether they will vote for the proposal, which Kraft Heinz's board of directors has recommended rejecting.

Kraft Heinz, which took a $15.4 billion writedown this year on its Kraft and Oscar Mayer brands, has been criticized for spending too little on innovation and marketing after years of cost cuts under managers from 3G Capital, Kraft Heinz's No. 2 shareholder. Since the writedown, the company's shares have fallen about 40%.


BOCA Burger, credited by some as the original U.S. veggie burger for the masses, was bought by the then-Kraft Foods in 2000. One problem for the aging BOCA Burger, however, is that the current alternative-meat craze is actually being driven not by vegetarians, but by so-called flexitarians - meat-eaters who occasionally buy alternative-protein products. To appeal to these shoppers, Beyond Meat and other upstarts are convincing grocers to stock their products next to fresh-looking animal burgers in chilled-meat cases.

BOCA Burgers, by contrast, are frozen and sit in refrigerators with vegetarian and vegan products, where meat-eaters may not think to look.

Kroger Co (N:KR), one of the first grocers to sell Beyond Meat patties in meat cases, said on Tuesday it was testing a plant-based protein section in the meat departments of 60 stores to gauge shopper behavior.

BOCA Burger's share of the U.S. plant-based burger market shrank to 3.8% last year, compared with 7.3% in 2013, according to Euromonitor.

Kraft Heinz declined to provide details on its plans for plant-based proteins or comment on the forthcoming shareholder vote. In a filing ahead of the meeting, Kraft Heinz said several named executives had forfeited their bonuses for 2018 due to the company's performance. Chief Executive Officer Miguel Patricio, who took the helm in July, said last month that the company needed to better understand consumers and was "far behind the plant-based market."

Spokeswoman Lynne Galia said Kraft Heinz had increased BOCA sales over the past year, driven by changes to the taste, texture and packaging of its products. "We are committed to ensuring our BOCA products maintain meaningful competitive claims versus meat products, as well as competitive claims in the category as it evolves," Galia said.

But BOCA's new boxes lack the "plant-based" buzzword, and tout an "All American Veggie Burger" at a time when rivals lure meat-eaters by avoiding terms like "vegan" or "vegetarian."

Faryda Lindeman, a senior responsible investment specialist at NN Investment Partners, said big companies including Kraft Heinz that had fallen behind in the plant-based market were likely set in their ways and did not want to invest in new risks. NN Investment holds a $9.4 million stake in Kraft Heinz.

"The only thing they can do is to buy other companies of course, they have a lot of cash," Lindeman said. 3G Capital is known for scoring big M&A deals to drive growth, but new Kraft Heinz CEO Patricio said when his appointment was announced in April that his focus, for now, would be on expanding existing brands.

Where's the fake beef? Not at Kraft Heinz, investors worry

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email