A view of the Heinz Remix dispenser
Source: Kraft Heinz
For more than 125 years, Heinz bottles have touted “57 varieties,” a number entirely made up by the founder with little to no real application.
Now, Kraft Heinz aims to offer customers more than three times the condiment options through a new customizable sauce dispenser, made for foodservice customers.
The machine, dubbed the Heinz Remix, is the latest example of Kraft Heinz tending to grow sales in its away-from-home segment. The company has expanded distribution in airports, launched a deluxe version of its mayonnaise for chefs, and reformulated its Lunchables so they can be served in schools. In the first quarter, Kraft Heinz’s North American foodservice division reported revenue growth of more than 25%.
The company will unveil the Remix at the National Restaurant Association Show, which kicks off Saturday in Chicago. It plans to test the dispenser in restaurants by the end of this year.
“We are very, very clear that the out-of-home and food service gives us the opportunity to test, learn, understand and build trends much sooner than we have in the past,” said Peter Hall, head of division North by Kraft Heinz. American foodservice division.
Hall said the company is still working on the specific business model for the Heinz Remix. It is also looking at how the dispenser can be used for drive-thru orders, he said. But the machine requires more time and effort than throwing a handful of ketchup packets into a takeout bag, which will likely pose a challenge for speed-oriented drive-thru jobs.
To customize a sauce, consumers use the touch screen to select a base of ketchup, ranch, 57 Sauce, or BBQ sauce; add “enhancers” including jalapeno, smoky chipotle, buffalo, and mango; and set one of three intensity levels.
Alan Kleinerman, head of disruption at Kraft Heinz, told CNBC that his favorite combination is ranch dressing, with a heavy dose of jalapeno and a lighter infusion of smoky chipotle. But one dark horse — mango ketchup — has been generating the most buzz around Kraft Heinz’s office lately, he said.
The company created the Heinz Remix in just six months, with the helping hands of Microsoft, device engineers and internet-of-things developers.
“We have been on this journey to make innovation the main growth engine in our company,” said Kleinerman. “To do that, we knew we had to work differently than in the past, think bigger, be more consumer-focused.”
Oscar Mayer’s owner is in the midst of a turnaround after the former management’s focus on cost cutting led to declining sales in North America. The troubles culminated in 2019 when it disclosed $16.6 billion in write-downs on iconic brands, such as Cool Whip and Kraft, and an SEC investigation into its accounting.
In the last quarter, Kraft Heinz reported that sales in North America grew 6.2% as higher prices offset shrinking demand from inflation-weary buyers. Shares of Kraft Heinz are down 3% this year, giving it a market value of $48.5 billion. Shares of the S&P 500 are up 7% in the same time.
Tasting new products
Although the Heinz Remix is new, its design feels familiar thanks to its resemblance to the Coca-Cola Freestyle machine, which was launched almost 15 years ago.
Today, Coke’s touchscreen beverage dispensers can be found in over 50,000 locations, including McDonald’s restaurants, AMC cinemas and Goal stores. Customers’ favorite custom orders from Freestyle machines have inspired the beverage giant to introduce new bottled drinks such as Sprite Cherry and Coke with Cherry and Vanilla.
“They showed the power of iteration and innovation when they got feedback,” Kleinerman said of Coca-Cola.
But he added that consumers and food service operators were the main inspiration for the Heinz Remix.
“I think it’s easy enough to draw the parallels, but this was an opportunity that came from the original insights that emerged and our desire to really change and build on the experience consumers have today,” he said. Kleinerman to CNBC.
Customers have asked Kraft Heinz for spices that are spicier or that combine sweet and savory, while restaurateurs told the company they wanted more variety, Kleinerman said.
Like Coca-Cola, Kraft Heinz also plans to use its sauce dispenser data to decide which new products to release in supermarkets. The hope is that the Heinz Remix will deliver new products that customers really want, rather than the ones they say they want but never buy.
In recent years, Heinz has already released a number of condiments inspired by combining its most popular sauces, including ‘mayochup’, ‘kranch’ and ‘buffaranch’.