With these aspects, 3G Capital, Brazil’s buyout fund company, employs the method in the new corporation, Kraft-Heinz. Kraft Heinz is the quintessential "Buffett" stock. Let's review the basic investment case for each to determine which of these two dominant food giants is the better buy. The Kraft Heinz Company and Mondelez International (NASDAQ:MDLZ)are home to iconic grocery brands, but both companies have struggled to find meaningful growth lately due to a sluggish sales environment throughout the industry.However, both management teams are focused on what they can control by cutting unnecessary costs, boosting earnings performance, and continuing to innovate with … On the bottom line, however, better cost management led to a huge boost in earnings per share of 52.1% (excluding currency and costs associated with the merger in 2015). … The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Mondelez's cost of revenue for the past four quarters is 61% while operating expenses eat … The company has tried to spruce up its brands, offering organic Capri Sun drinks and all-natural Oscar Mayer hot dogs, but consumers aren't biting. Heinz Company to form The Kraft Heinz Company, the world’s fifth-largest food and beverage company. As for valuation, Kraft Heinz is more expensive with a trailing price-to-earnings ratio of 24 compared to Mondelez's 21. All Rights Reserved. The industry is not growing at a rapid pace. As Kraft Heinz's profit margins have fallen â and its competitors have caught up with them â it's become simply one of the many Big Food companies struggling with slowing sales and rising costs. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. This highlights an interesting phenomenon taking shape in the food and beverage industry right now. In 2016, organic net revenue grew only 1.3%, but adjusted earnings grew much faster at 24.1%. Mondelez, the maker of Oreo, Ritz and Chips Ahoy, has also struggled with sales over the last five years. Kraft Heinz Company (), now the fifth-largest food and beverage company in the world, is the result of decades of takeovers in a growth strategy that shows no signs of slowing down. Kraft Heinz has lost the one thing that distinguished it from General Mills and Mondelez Published Fri, Feb 22 2019 4:32 PM EST Updated Fri, Feb 22 … Since it hauled in net revenue of $8.83 billion in the fourth quarter of 2014, sales at the company have continued to slip. The North American grocery business will continue to carry the name Kraft and … A spokeswoman for Kraft Heinz and a spokesman for Mondelez declined to comment. Management already made a move for Unilever earlier this year, and rumors are already swirling as to what company Kraft Heinz will attempt to court next. Kraft Foods decided to spin off its global snack business in March. The one thing Kraft Heinz had going for it was its profit margins. Let's conquer your financial goals together...faster. That company, called Mondelez International, will be home to global brands including Oreo, Cadbury and Nabisco. Compare working at Kraft Heinz Company vs Mondelez International Compare company reviews, salaries and ratings to find out if Kraft Heinz Company or Mondelez International is right for you. Plus, Kraft may have a slightly easier road to growth by introducing existing products to new markets, as opposed to Mondelez's path of revamping its products to fit consumer preference. • List of KHC Competitors The firm was initially set up to execute on a rollup strategy in the fragmented United States ice cream industry. Kraft Heinz is the third-largest food and beverage company in North America and the fifth-largest in the world with $25.0 billion in annual sales as of 2019. The Kraft Heinz Company (KHC), commonly known as Kraft Heinz, is an American food company formed by the merger of Kraft Foods and Heinz and is co-headquartered in Chicago, Illinois, and Pittsburgh, Pennsylvania. Comparing the results to its competitors, Kraft Heinz Co reported Total Revenue increase in the 3 quarter 2020 by 6.01 % year on year. As for valuation, Kraft Heinz is more expensive with a trailing price-to-earnings ratio of 24 compared to Mondelez's 21. Sales growth has been slow lately -- which has been the case throughout the industry -- with Kraft Heinz's 2016 organic net sales moving at a snail's pace of 0.3%. John covers consumer goods and technology companies for Fool.com. Although Kraft is slightly more expensive valuation-wise, I believe the higher P/E of Kraft Heinz is fully justified by the involvement of two long-term, shareholder-friendly owners like Berkshire Hathaway and 3G Capital having a voice on the future direction of the business. Both companies were listed on the NASDAQ exchange. The new Kraft Foods Group’s mission was focused mainly on grocery products for the North American market while Mondelēz was to focus on international confectionery and snack brands.