Kraft Heinz CEO stepping down, successor named

Kraft Heinz Co. has named a new CEO as it struggles to remain relevant amid changing American tastes.

The company said Monday that Miguel Patricio, a longtime executive at Anheuser-Busch InBev, will replace outgoing CEO Bernardo Hees in July.

Patricio, a native of Portugal, served as InBev's chief marketing officer from 2012 to 2018, its Asia Pacific president from 2008 to 2012 and its North America president from 2006 to 2008. He has also worked at Philip Morris, Coca-Cola and Johnson & Johnson.

"Miguel is a proven business leader with a distinguished track record of building iconic consumer brands around the globe," said Alex Behring, chairman of Kraft Heinz's board of directors, in a statement.

Kraft Heinz, which is based in Pittsburgh and Chicago, has been hurting as consumers looking for fresher, healthier food pivot away from its familiar stable of brands such as Jell-O, Kool-Aid and Velveeta. In February, the company slashed the value of its Oscar Meyer and Kraft brands by $15.4 billion.

Investors have also questioned moves by 3G Capital, the Brazilian investment firm that engineered Kraft's tie-up with Heinz in 2015 along with Warren Buffett's Berkshire Hathaway. The firm has cut costs at Kraft Heinz, but some analysts say it hasn't invested enough in product development.

Kraft Heinz lost $12.6 billion in the fourth quarter and said its net sales were flat from the prior year. It also slashed its dividend and recorded a $25 million charge after a U.S. Securities and Exchange Commission investigation found problems with its procurement reporting.

"This set of disappointing results dampened management's credibility with investors and might have prompted the board to initiate the CEO change," Bernstein analyst Alexia Howard said in a note to investors.

Howard said the selection of Patricio indicated 3G's merger and cost savings phase had ended and the board was looking for managers with more marketing and operational experience. 3G was also behind the 2008 merger of InBev and Anheuser-Busch. But unlike Hees, who is a partner at 3G, Patricio is not directly involved with the investment firm.

Patricio's experience overseas could also help the company expand in new markets, Howard said. The U.S. accounted for 70% of the company's net sales in the fourth quarter.