Prevedere's forecast accuracy resulted in millions in cost savings and revenue growth.
The Kraft Heinz Company partnered with Prevedere to modernize its forecasting, planning processes, and culture to respond to shifts in consumer behavior and significant market volatility due to COVID and increasing external disruption.
01The Cliff's Notes
Kraft Heinz has transformed its go to market strategy.
By working with Prevedere's global data, Advanced Predictive Planning platform, and expert in-house economists—the Kraft Heinz Company (KHC) is realizing both tactical and strategic advantages, including:
- Forecast accuracy, where a 1% improvement results in millions of dollars of cost savings or revenue growth.
- A new layer of understanding, with data driven predictions, to help drive supply chain decisions.
- Ability to attain insights and discover new and impactful consumer-level drivers.
- Ability to attain CAGRs, market size projections, and other financial metrics that were previously difficult to produce.
- No more surprises or market blind spots, with a new confidence and ability to plan for future opportunity and risk.
All retailers and CPGs should consider macroeconomic factors to improve their business planning.
Not only will forecasting accuracy improve, but go to-market planners will be fully educated as to what external factors are important to their markets.
Start considering macroeconomic factors in your business planning.
Add Prevedere's Advanced Predictive Planning platform to your FP&A stack.
02The Kraft Heinz Story
Operating in volatile global markets
The Kraft Heinz Company (KHC) is one of the largest CPG organizations in the world with over $26 billion in annual revenue. They manufacture and sell products worldwide within 80 food and beverage categories, and has a consumer penetration rate of 97% in the US.
Forecasting and planning is a critical function, performed on a monthly, quarterly, and annual basis by teams around the world. Budgets and resources are constantly re-assessed.
In 2020 KHC reorganized and regrouped its categories into 6 new product platforms, based around consumer behavior, supporting a transformational new growth strategy.
COVID rocked even their most stable categories, and triggered a new initiative to commence all planning with macro economic views and predictions within each of their key markets.
03Opportunities & Goals
Shifts in Consumer Behavior
Gain Predictive Insight
In 2019 KHC saw that consumer behavior in their markets was shifting, even before COVID. An increase in eCommerce, a desire for greater convenience, more snacking and mini-meals and a willingness to experiment with taste. KHC saw a real opportunity to reorganize and focus on a new growth strategy.
KHC decided to regroup its categories into consumer behavior-based platforms, and to develop objectives, plans, and marketing around these new trends. They really needed visibility and intelligence around these go to market platforms, especially regarding CAGR predictions, in order to optimize forecasts, budgets and resources.
In order to be able to optimize resources for growth, KHC needed to gain predictive insight into the new consumer-behavior based platforms.
COVID + Volatility
And then COVID struck...
In 2020 the business world was shaken by the pandemic as every industry was impacted in varying ways. KHC experienced a surge in demand and their teams adjusted the best they could. It was clear that forecasting based on historical performance and internal projections was not going to cut it anymore.
This was the realization that strategic planning and ongoing forecasting needed to incorporate external market dynamics, and to quantify the unique set of market drivers for each platform and market.
KHC needed to incorporate market volatility into their planning and forecasting processes, and create top-down macro views of the markets in which they operate.
04The Prevedere Solution
Proof of Concept
KHC discussed with Prevedere their desire to incorporate macroeconomic views into forecasting and planning.
An initial project that targeted one of its key consumer platforms was executed.
The goal was to identify contributing market drivers, then create economic-based forecasts and industry outlooks from econometric predictive models.
The Kraft Heinz team now had a platform forecast validated by correlated economic data and macro predictions.
Prevedere's Global Roll-out
After a successful pilot resulting in a much higher degree of forecast accuracy and market visibility, KHC dramatically expanded the number of predictive models, driven by Prevedere's Advanced Predictive Planning platform, across the organization—including Canada and 80 other international territories.
Senior financial leadership at KHC realized that they needed to supplement each planner's own internal knowledge with a better understanding of established and emerging market drivers.
Kraft Heinz forecast accuracy improved and global market planning confidence skyrocketed with Prevedere economic forecasts and scenarios.
Economic baseline forecasts and scenarios combined with market assessments by Prevedere's economists provide critical intelligence and the ultimate safety net for KHC planners.
Planners and leaders at Kraft Heinz now understand what really drives their business units, and are far more knowiedgeable about the economic impact on supply and demand.
Prevedere helped Kraft Heinz enable transformation and growth, manage volatility and risk in uncertain times.
Want to protect your business in these uncertain times?
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