Heinz repackages divisions to gain clout with grocers

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H.J. Heinz Co., preparing for a retail future of mega food chains, has shuffled executives and bundled several units to leverage its scale with the grocery trade.

The new organization takes seven operating groups and turns them into two unofficial umbrella units, theoretically giving Heinz more clout with retailers.

The first, Heinz North America Dry Grocery & Foodservice, will encompass Heinz USA, Heinz Canada, Heinz Pet Products, Star-Kist Seafood and Weight Watchers International. It will be headed by Exec VP William Springer, who takes the new post of president.


The second umbrella organization, Heinz Frozen Food Co., combines both Ore-Ida and Weight Watchers Gourmet Food Co. under the direction of President-CEO Harrison Neil.

With the moves, Heinz is subscribing to the bigger-is-better theory being embraced by the trade as Safeway Co. buys Dominick's Finer Foods, Kroger Co. absorbs Fred Meyer Inc. and Albertson's swallows up American Stores.

"The consolidation of functions across Heinz's North American affiliates is a logical response to growing retail consolidation and the imperative to be faster to market and more responsive to customer and consumer needs," said William Johnson, Heinz president-CEO.


Heinz also created the new post of exec VP-North American sales and named Dan O'Neill to fill it, charging him with consolidating Heinz broker sales organizations while acting as president of Heinz South America.

Mr. O'Neill was previously exec VP for Star-Kist and Heinz Pet Products.

"The major reorganization of Heinz's grocery and frozen food operations and various new initiatives toward a single sales force will add significantly to shareholder value and to our determination to be the premier-performing food company," Mr. Johnson said.

At the same time, Heinz named Joseph Jimenez, current president of ConAgra's Hunt-Wesson/Peter Pan Co. and Orville Redenbacher/Swiss Miss units, to be president-CEO of Heinz USA, a vacant post.

Mr. Jimenez, who recently led an agency review at Hunt-Wesson, is jumping ship from one trade promotion-driven company that has professed to return to advertising to another.


Peter Bowen was tapped as president-CEO of Heinz Pet Products, from president, Heinz USA Retail Products Group.

The combination of the frozen food lines is apparently the result of Heinz being unable to sell Weight Watchers' frozen foods, which has been on the block. But the creation of the $1 billion unit also raises some questions.

"This new consolidated affiliate will provide a single focus on the marketing and sales of our top frozen food brands," Mr. Harrison said.

Whether that will involve giving the brands to a single agency remains to be seen--agency reviews for both brands this year saw Weight Watchers go to DDB Needham Worldwide and Ore-Ida to Citron Haligman Bedecarre, both San Francisco.

Within the announcement, Heinz said it will roll out a microwaveable whipped potato line early next year and that it will exit the pocket sandwich business as part of a movement to jettison "non-strategic frozen food businesses."

Copyright November 1998, Crain Communications Inc.

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