In Focus

Ketching Up with HJ Heinz

Go figure. The pregnant Chick can't stop talking about food. I wish I could say I was really watching my weight and that I was only going to gain twenty pounds. But with this being my third child and my will power at it's all-time low, I'm just going to have to start lying. And all you Chicks who have had kids know what I'm talking about when I talk cravings. It's that whole "I gotta have it and I gotta have now" frame of mind. You become edgy, practically violent, if you can't get what you desire. And if they know what is good for them, anyone in your vicinity will do everything short of breaking the law to satisfy you.

This particular second trimester of pregnancy has been all about tuna fish. I found a place where I could get Asiago cheese bagels with tomato and tuna on top and it's been magnificent. But the problem arose when the cravings would come after store hours. So the next best thing was to make my own tuna mixture, and buy the bagels in bulk. The bagel guy knows what I want when I come in (a dozen bagels and a tuna on Asiago to go) and the makers of Star Kist tuna can't keep enough cans of their product on the shelves of West Chester grocery stores. Now hang on while I wipe my mayonnaise-laden fingers enough to keep them from messing up my keyboard. This company that produces my favorite tuna is definitely worth researching!

HJ Heinz (NYSE:HNZ) is more known for its terrific ketchup than it is for my current fixation, tuna. Its ketchup carries over 50% of that market and with summer coming up and BBQ's aflame, most of us will have to keep bottle or two in our fridges at all times. What may surprise you even more about this company is the number of other familiar products manufactured and marketed by HJ Heinz.

With over 150 number one and number two brands worldwide, you can imagine the list is way too long for me to cover right here, right now. For a full list of their products you can always go to their website and check it out. But for the purpose of giving you a taste right now, some of their more popular products include: Ore-Ida frozen potatoes, Star Kist tuna, 9-lives, Weight Watchers Foods, Smart Ones, Bagel Bites, College Inn, Farley's, Skippy, and Pupperoni. And that is just some of what they have under non-Heinz name brands (which, by the way, makes up 70% of their sales!) Their original motto of having "57" products falls way short of their true number, an astounding 5700! They seem to have the whole food industry... and the world... covered!

One half of HNZ sales come from overseas. Their non-U.S. operations are in Australia, Canada, the UK, and Northern Europe, which gives them huge market leadership, but also has its downside. Especially now. With the current brutal foreign exchange rates the business overseas hasn't failed, but it has more than affected their bottom line. If you figure the sales without exchange issues, they're up 3.7% over the last year. But in truth, the 39 weeks ending1/31/01 showed a marked decrease in revenues of 1% down to $6.72 billion. Yuck.

The good news, reported on March 15, 2001, showed Fiscal 3rd quarter earnings that met estimates. Per share, earnings were up 65 cents/share from 63 cents/share the previous year in the same period. The company announced they would achieve growth estimates of 4 to 5% in sales and 9 to 10% in earnings. Surprisingly, to this tuna-focused Chick, their tuna fish growth has struggled lately (Hey -- I'm doing my part, but I can only eat so much!), along with their pet food, and they have decided to streamline the businesses. They feel that this move, which ultimately will result in a restructuring and a loss of approximately 1900 jobs, will show a cost savings of $25 million by next year, and $60 million annually by the year 2004.

Henry John Heinz began this company back in the 1800s. At age 25, in 1869, he put out his first product: his mom's grated horseradish marketed in a clear bottle so consumers could see its purity. Heinz had standards like no others. He invented the first public factory tour to show that his condiments were made with the finest ingredients, in the cleanest factories around. His motto was that "Heart power is better than horse power" and "quality to a product is what character is to a man." Heinz's belief that treating his employees well was the best way to motivate them gave him the excellent reputation that has always been synonymous with his name. Today, Heinz is run by President and CEO William R. Johnson. Under his guidance, the 150-year-old company has continued its success. HNZ stock has increased its dividends each year since 1967 and has split eight times since 1961. Currently, HJ Heinz is a $9.4 billion business.

It totally cracks me up that now that I'm a Chick, tuna cravings lead me to cravings of a completely different nature: the research of the company behind the craving! Thank goodness for all parties that in this case, the pregnant Chick was left feeling pretty satisfied.

Stay tuned for the third trimester food of choice -- and pray that they're public!