CEO Joe Jimenez said: “We are talking to potential candidates. We are trying to use acquisitions to gain critical mass in new countries.”
He said Heinz was keen to grow in Spain, France, Germany, Poland and Russia and expected a deal in 18 months.
But he stressed that its priority was ketchup, condiments and sauces: “We don’t need to look beyond our current categories. We compete in five core categories and that’s enough.”
Jimenez, who took charge of the European business in 2002, said Heinz had been successful in cleaning up its portfolio in the past 12 months, divesting businesses such as its UK frozen
pizza operation that he said were non-strategic. And removing clutter in the $3bn European business would remain a key priority in 2004.
But the main target was profitable growth in Europe, with three massive projects now under way. In the UK, Heinz is preparing to revamp its soups and beans ranges; it is relaunching its babyfood in Italy; and has been resizing and repricing its range in the Netherlands to offset huge deflationary pressures.
“Deflation is a still a worry across Europe,” said Jimenez. “In the Netherlands, we looked at how we could use that as an advantage…to offer consumers better value and increase the margin to the trade.”
To pay for such initiatives, Jimenez said Heinz Europe was looking to take 1% out of its total delivered costs this year.
Product differentiation and innovation will remain important drivers, said Jimenez, pointing to developments such as its soup in microwaveable cups, upside down ketchup bottles and its Salad Shakers.
The upside down ketchup bottle had helped that business, which was flat a year ago, grow unit volume 6% and value growth at a much higher rate.
Jimenez said the UK business, which accounts for half Heinz’s European business, was in good shape. “The UK business grew last year and is on the hook for good growth in this current financial year.”