Kraft Heinz Engages in $3B Upgrade

Kraft Heinz (NASDAQ:KHC) shares settled Wednesday, amid word the food giant is spending $3 billion to upgrade its U.S. factories, its largest investment in its plants in a decade, even as executives say consumer sentiment is at its second-lowest point in 70 years, and it has cut sales and profit forecasts.

The upgrades will help lower costs by making the plants more efficient, which in turn may help offset President Donald Trump’s tariffs, which factored into the company’s decision to make the investment, said Pedro Navio, Kraft Heinz’s president of North America, in an interview with Reuters.

The investment also allows the packaged food maker to come up with and sell new products faster, he said.

Kraft Heinz manufactures its market-leading Heinz ketchup, Kraft macaroni and cheese and Philadelphia cream cheese, among other products, at 30 plants across the United States. Kraft Heinz told Wall Street analysts last month that tariffs were adding to its costs and that consumers were buying less due to economic uncertainty.

But the company is moving forward and making the new investment now to defend its market share, Navio said.

“It goes beyond just efficiencies or dealing with the current tariff challenges,” he said, saying the investment allows Kraft Heinz to produce food for the long term.

KHC shares dropped 24 cents to $27.36.