Kraft Heinz and Dollar General Build Shared Data Strategy to Meet Consumer Value Mentality
The Kraft Heinz Company has been pivoting its approach to retailer relationships, moving away from an “I win, you lose” ideology to instead forming a mutually beneficial collaboration built on trust. As a result, the company has been able to get closer to consumers through its value strategy with Dollar General.
During the recent Bernstein’s conference, CEO Carlos Abrams-Rivera shared details on the effort, which he said is one of the biggest changes the company has seen.
A Shared-Data Strategy
“We're in a place much stronger than we've ever been,” he said, reflecting on Kraft Heinz’s ability to ingest data directly from Dolla General in order to better service stores.
Kraft Heinz distribution with the company has grown about 10% compared to last year — a result of shared retailer data within a virtual merchandising environment to help turn insights into actionable strategies.
Kraft Heinz guided Dollar General on the type of environment consumers are willing to shop in — how the store needs to be set up and how Kraft Heinz, in turn, could increase distribution, within a particular channel.
“We can then deploy our products directly, not just to their warehouse, but to the actual stores that they may need the product [in],” he said. “We can also better understand, based on what consumer patterns are doing, when in the month they need different types of products.”
Kraft Heinz has extended to other key major retailers across the U.S.
What Sparked This Change?
It’s unsurprising that Kraft Heinz’s foray into this shared data strategy began with Dollar General, considering the current value mentality among today’s consumers.
“I think what's happening is that there is a high-end consumer that even though they're doing well, they're still going to be shopping more and looking for more places in which they can satisfy the value mentality,” said Abrams-Rivera. “In fact, half of consumers believe that we're in a recession.”
In order to strengthen the value for consumers, pricing can only be part of the strategy, he said. The total value equation needs to include investment in quality products, providing the key attributes that consumers care about, and being present in the channels that consumers are continuing to push — and that’s where the data is needed.
For Kraft Heinz, this has meant expanding its presence in Dollar General, along with club stores, in order to be agnostic about where its consumers are shopping.
Siloed Efforts vs Collaborative Changes
The strategy aligns with the company’s ongoing multi-year transformation, which is knocking down siloed efforts to build in a more holistic approach to operations and introducing collaboration across the enterprise.
It’s also being supported by an AI-powered RGM roadmap that more effectively measures promotion impact and improves ROI by identifying the right product mix for a retail location or region.
During the conference, Abrams-Rivera touched on some of the digital tools being used in this respect, including virtual reality and photographic evidence for what wins out in on-shelf assortment optimization.
