Kraft Heinz: Inside Its Enduring Post-COVID Expansion
COVID-19 profoundly impacted global manufacturing, disrupting supply chains, changing the landscape of consumer demand and prompting operational shifts to comply with social distancing guidelines.
We saw the US auto industry experience a notable downturn, with car sales as of yet not returning to 2019 levels.
In Germany, almost 250,000 manufacturing jobs were lost as industries invested heavily in automation.
For Kraft Heinz, the pandemic presented opportunities and challenges.
It mandated social distancing guidelines and pursued key protocols to reduce the spread of the disease, whilst working to strategically adapt to dramatic changes in demand.
With the shift to a 'stay at home' economy and the rise of consumer panic buying in preparation for lockdowns, the manufacturer experienced an unprecedented surge in demand for products like Kraft Macaroni & Cheese, Philadelphia Cream Cheese, Heinz Ketchup, Maxwell House Coffee and Oscar Mayer hot dogs.
To meet this demand, Kraft Heinz adapted and enhanced its resiliency.
All US factories operated 24 hours a day, seven days a week to produce the aforementioned products- an unprecedented level of operation, far greater than typical seasonal demand.
This was possible due to Kraft Heinz's workforce, who showed up ensure a steady food supply during the crisis- employee attendance rates at the manufacturer's factories were among the best in recent years.
The result was that factories like Kraft Heinz's Iowa plant, responsible for producing Oscar Mayer cold cuts, achieved record outputs during the pandemic.
Kraft Heinz has since built on this growth by enhancing its production capabilities and modernising its manufacturing and distribution centres.
This expansion, growing since 2020, is also a reflection of Kraft Heinz's strategic adoption of Industry 4.0 technologies like automation and AI.
Here are just a few examples of how Kraft Heinz has successfully grown since the pandemic.
2021: Modernising the Kitt Green facility
In 2021 Manufacturing Digital reported on Kraft Heinz's £140 million ( US$189m) investment in its Kitt Green plant near Wigan, UK, Europe's largest food manufacturing facility.
Last year this factory - in a project pursued in collaboration with Carlton Power - became a green hydrogen project, enabling Kraft Heinz to fuel over 50% of the site using hydrogen.
This project is anticipated to finish in 2026.
Kraft Heinz's 2021 investment was the company's most substantial investment in an existing manufacturing site outside the United States in over two decades.
The Kitt Green facility produces approximately 1.3 billion cans of food annually, including iconic products like Heinz Beanz, soups and pasta, with 94% consumed within the UK.
The investment aimed to modernise the site's manufacturing capabilities over four years, focusing on three key areas:
Repatriating sauce production: Bringing the manufacturing of Heinz sauces such as ketchup, mayonnaise and salad cream back to the UK to enhance European capacity.
Upgrading machinery: Implementing state-of-the-art equipment to improve efficiency and product quality.
Enhancing sustainability: Aligning with environmental, social and corporate governance (ESG) commitments by reducing the use of non-renewable resources and lowering the facility's carbon footprint.
This modernisation was expected to created 50 new full-time positions and provide upskilling opportunities for existing staff.
The initiative underscored Kraft Heinz's confidence in the UK's post-Brexit economy and its commitment to supporting local manufacturing, inspiring further expansion abroad.
2022: Expansion in Texas & Spain
In 2022, Kraft Heinz embarked on a significant expansion project at its manufacturing facility in Garland, Texas, USA.
This initiative involved a capital investment of US$143m, aimed at modernising and upgrading the plant's production capabilities. #
The expansion plans included the addition of two to three new production lines and the modernisation of existing ones.
This development was projected to create approximately 200 new jobs, increasing the facility's workforce to around 1,500 employees.
The project was scheduled to span three years, commencing in 2022 and concluding in 2026.
Kraft Heinz also began a €70 million (US$82.6m) expansion of its manufacturing site in Alfaro, La Rioja, Spain in 2021.
This investment increased the factory's capacity by 50%, enhancing its position as one of the company's most efficient facilities in Europe.
The expansion included the addition of a state-of-the-art processing plant and was expected to generate 39 new permanent jobs in the region.
The Alfaro plant produces a range of Heinz sauces for both local and European markets and processes approximately 25,000 tonnes of locally grown tomatoes annually for the company's Orlando brand.
In 2022, Kraft Heinz also expanded its global operations by acquiring an 85% stake in Germany-based Just Spices GmbH.
Established in 2014, Just Spices is a direct-to-consumer company offering over 170 products, including spice blends, salad dressings and organic options.
Approximately 70% of its sales are online, with the remainder through retailers in Germany, Spain, Austria and Switzerland.
This acquisition aligned with Kraft Heinz's strategy to enhance its direct-to-consumer capabilities and strengthen its presence in the taste elevation market, enabling the company to greater diversify.
2023: Growing in Ilinois
In July 2023, Kraft Heinz announced a substantial investment exceeding US$400m to construct a 775,000 square-foot automated distribution centre in DeKalb, Illinois.
This facility was designed to enhance supply chain efficiencies and expedite product distribution to retail and foodservice customers across North America.
Equipped with state-of-the-art automation technology and national railway access, the centre handles more than 60% of the company's foodservice business and approximately 30% of all dry goods.
The project created more than 150 jobs in the region and aligns with Kraft Heinz's environmental, social and corporate governance (ESG) goals by implementing sustainable technologies to minimise environmental impact.
2024: Continued partnership in Canada
In May 2024, Kraft Heinz Canada and Highbury Canco extended their partnership agreement for another four years, ensuring continued production at the Leamington, Ontario facility until the end of 2027.
This extension marked the third consecutive renewal of their collaboration, underscoring the importance of the Leamington plant in Kraft Heinz's operations.
The 2.1-million-square-foot facility employs over 600 Canadians and produces popular products such as Heinz beans, Heinz tomato juice and Classico pasta sauce.
The estimated retail value of products to be produced at this facility over the next four years exceeds US$1bn.
In 2024, Kraft Heinz reported progress in its transformation journey, emphasising innovation in flavour, snacking and easy meals.
The manufacturer introduced new ketchup flavours, including a spicy variant in the US and a pickle-infused option for a tangy taste.
Additionally, Kraft Heinz expanded the use of its condiments beyond traditional pairings, targeting foods like burritos and tacos.
In the easy meals segment, the company launched Heinz Curry Beanz, which generated 60% incrementality and attracted new customers to the category.
Convenience was further enhanced with Heinz Beans snap-pots for microwave use and frozen Kraft Mac & Cheese options.
These initiatives aimed to meet modern consumer demands and strengthen Kraft Heinz's market position.
2025: Expansion in Alfaro
This year Kraft Heinz celebrates the completion of the expansion at its Alfaro factory in Spain.
“The expansion of our Alfaro factory marks an important step in our journey to become Europe’s number one player in sauces, in and out of home,” says Willem Brandt, President of the company’s European and Pacific Developed Markets (EPDM).
“With increased capacity and new, cutting-edge technology, we’ll be able to respond more readily to evolving culinary trends and tastes – including the demand for healthier versions of fan favourites, like Heinz mayonnaise.”
The expansion project has created a truly state-of-the-art processing plant, with high-speed filling lines and a brand-new pilot plant located at the food company’s Nijmegen R&D centre.
The investments strengthen the site’s position as one of the most efficient Kraft Heinz factories in Europe, enabling the company to keep up with rising demand for its expanding range of Heinz sauces.
This sizable investment reflects the strategic importance of Heinz within the company’s ambitious growth plans and will help leverage the company’s scale to boost the brand’s presence in Europe.
The creation of this new plant will also generate 39 new permanent jobs in La Rioja.
In addition to producing a range of Heinz sauces for local and European consumption, the Alfaro plant processes around 25,000 tons of locally grown tomatoes each year for the company’s market-leading Orlando brand.
Spain is a key production centre for Heinz in Europe and boosting capability in the region brings the company closer to its ambition to lead the future of food.
This journey not only highlights Kraft Heinz's successful manufacturing strategy of continual expansion and diversification, but also how critical their response was during the pandemic.
By capitalising on opportunity and emerging technologies, they put themselves in a enviable position that created a robust foundation for future growth.
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