Workers at Kraft Heinz's plant in Montreal. The company is investing $250-million in the facility, which manufactures about half of the product sold in Canada.Supplied
Kraft Heinz Co. KHC-Q is making a multimillion dollar investment in its Montreal factory as the American food giant pushes to reshape its offerings and cement its Canadian operations at a time of rising consumer patriotism.
The Chicago-based multinational, known for its Kraft Dinner and Heinz ketchup, will spend $250-million to modernize equipment and infrastructure at the 70-year-old plant. The goal is to secure the reliability of the factory’s current output of 500 million pounds of product a year.
Kraft Heinz is aiming to boost capacity with the upgrades and expand its offerings with new product formulations and sizes. More than half of what the company sells in Canada is made at the Montreal site, a complex facility that employs 1,000 people running 41 manufacturing lines, pumping out everything from peanut butter to salad dressings.
“Our business in Canada is doing very well,” Simon Laroche, who leads Kraft Heinz in the country, said in an interview. “As we’re looking at our three to five year plans, what we have right now is not enough to meet Canadian demand and needs.”
Mr. Laroche said the company wants to boost the factory’s ability to make more Philadelphia Cream Cheese and Heinz ketchup, both hot sellers. It also wants to bring innovation to existing products to meet changing consumer preferences, including offering more packaging sizes to meet different shopper budgets.
Kraft Heinz employs about 1,000 people at the plant, which runs 41 manufacturing lines. The company is known for Kraft Dinner mac and cheese, shown here, as well Heinz ketchup and Philadelphia Cream Cheese.Supplied
The investment is part of a wider effort by new Kraft Heinz chief executive Steve Cahillane to reverse a sagging global performance that has seen the food maker post revenue declines every year since 2023. Last month, Mr. Cahillane cancelled a plan hatched by his predecessor to split the company into two, saying he wanted to put 100 per cent of its focus and resources into returning the company to profitable growth.
It also comes at a testy time for Canadian shoppers, who are paying more attention than ever to the provenance of their food and drink because of trade tension between Canada and the United States. In a survey released last fall by Dalhousie University’s Agri-Food Analytics Lab, 52 per cent of respondents said they always or often choose local food over other options, up from 34 per cent the year before.
Kraft Heinz has been highlighting its Canadian history since U.S. President Donald Trump was elected, taking out ads last year showcasing the Montreal factory and local ingredient sourcing, among other moves. It has also carved out sponsorships with the National Hockey League and Toronto Blue Jays.
The food maker had been experiencing market-share loss and declining sales in Canada but managed to turn the situation around in 2022, Mr. Cahillane said during a presentation to an industry conference in Orlando last month. The company is now trying to employ strategies it used here and in other pockets of the world to fix the overall business.
The Canadian unit, which represents about 7 per cent of Kraft Heinz’s net sales, is currently focused on two big bets, he said: “Winning with Heinz” by expanding healthy options, and making nutritional changes such as adding protein to macaroni and cheese and other staples.
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With the Montreal factory investment, “they’re trying to consolidate some of their assets across North America and committing to the Canadian market much more forcefully,” said Sylvain Charlebois, senior director of the Dalhousie agri-food lab. “Everything has fallen into place for Kraft Heinz in Canada” over the past year, he said.
Rivals are also repositioning themselves. Unilever Plc UL-N, the Anglo-Dutch maker of Hellmann’s mayonnaise, confirmed Friday that it is in talks to sell its food business to U.S. spice and sauce maker McCormick & Co. MKC-N
Heinz triggered a public relations storm in 2014 when it moved its Canadian ketchup production from Leamington, Ont., to the U.S., a decision that was met by a promotional response by rival French’s and turned the red condiment into an unlikely symbol of national pride. Heinz reversed course in 2020 and now makes ketchup in Montreal from tomatoes grown in Leamington.