Miguel Patricio, Kraft Heinz’s incoming chief executive, is prepared to stand up for his brands. He was working for AmBev in Brazil when Arnold Schwarzenegger appeared at an event the brewer put on for the Rio Carnival. The muscle-bound actor was supposed to wear a top emblazoned with the company’s Brahma beer logo but had shown up without one.
“I went and said ‘Look my friend, these are the rules’,” the 52-year-old recalled in an interview. “‘If you are not going to put the jersey on, you are not welcome in this place’. He said, ‘I’m not going to put it on. I’m going to leave’. I said, ‘OK, leave.’”
Fifteen years later, Mr Patricio also appears undaunted by the task facing him at Kraft Heinz, the Warren Buffett-backed food group that has become one of corporate America’s biggest turnround jobs.
The Chicago-based company behind Kraft macaroni and cheese, Heinz salad cream and Amoy soy sauce, was forced to take a $15bn writedown this year as more shoppers shunned its brands.
This week Kraft Heinz restated almost three years worth of earnings after an internal investigation uncovered errors in the way it had accounted for supplier contracts. The US Securities and Exchange Commission is investigating.
Bernardo Hees, who led the 2015 combination of Kraft and Heinz in a deal engineered by the investment firm 3G Capital, will stand aside as chief executive at the end of June.
Mr Patricio is connected to 3G through his lengthy career at AmBev, which turned into Anheuser-Busch InBev through several large mergers and acquisitions orchestrated by the same trio of Brazilian billionaires who founded 3G.
But the new Kraft Heinz boss brushes aside concerns that his appointment is not enough of a break from 3G, whose management style and relentless focus on costs have been blamed in some quarters for many of the company’s problems.
I’m not 3G’s man,” he says. “I’m not a partner at 3G, I don’t have investments with 3G, and by the way, ABI is not part of 3G.”
[Kraft Heinz later said Mr Patricio had mispoken and he had a small investment in one of the 3G funds.]
Born and brought up in Lisbon, the Benfica fan moved to Brazil when he was a teenager. He took a business degree in São Paulo and simultaneously studied history at night school. “I like [working] the two sides of the brain,” he explained. “I love math, but I love the creative part as well.” He soon found a sweet spot in marketing consumer goods.
Mr Patricio got his start in Brazil at Johnson & Johnson, which moved him to New Jersey five years later. He left to work in marketing for Coca-Cola at its Atlanta headquarters, before the cigarette company Philip Morris lured him back to Brazil.
He joined AmBev soon after and climbed up the ranks of the brewer for two decades, with postings from Luxemburg to Shanghai, before Alex Behring, co-founder of 3G and Kraft Heinz’s chairman, approached him this year to make the move to Chicago.
As ABI’s chief marketing officer for six years, Mr Patricio had a portfolio of some of the world’s biggest beer brands, including Budweiser, Corona and Stella Artois.
Jason DeLand, founding partner of the Anomaly marketing agency, said marketing “had been seen as an expense, not an investment” at ABI before Mr Patricio. “He convinced the organisation to focus on creativity as the number one mechanism to fuel organic growth,” Mr DeLand said.
“He’s not a sit-back kind of guy,” said Dave Luhr of the ad agency Wieden+Kennedy. “He likes action.”
Kraft Heinz, whose shares have lost almost a quarter of their value so far this year, is certainly in need of a shake-up. The accounting problems have already caused it to miss a submission deadline for its 2018 annual report, and this week the company said its SEC filing for the first quarter of 2019 would also be delayed.
Asked about his accounting and financial experience, Mr Patricio makes clear he should not be seen as just an advertising guy. He was president of “some of the biggest” divisions of ABI, including Asia-Pacific, and is credited with rapid expansion in emerging markets.
Mr Patricio does not take the hot seat at Kraft Heinz until the start of July, but has already moved to Chicago to learn the ropes. His wife, who once worked for Kraft in Brazil, will follow from Connecticut with the couple’s three teenage daughters.
As well as taking the daughters to football and ballet, he spends his time outside work cooking, a helpful pastime given his new role at the helm of one of the world’s biggest food companies. “I’m in the right business, finally,” he joked.
He has yet to set out his strategy for Kraft Heinz, but thinks the big challenge will be navigating a changing industry. “Everything is changing: retail, private label, even [consumer] values, health and wellbeing. But at the same time that it’s a big transformation, it’s a big opportunity.”
Describing himself as a “brand builder”, he said Kraft Heinz had “very good, iconic, brands . . . Some shining, some are not. But, you know, we can make them [all] shine.”
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