Heinz Microeconomic Analysis

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  • Topic: H. J. Heinz Company, Ketchup, Del Monte Foods
  • Pages : 8 (2400 words )
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  • Published : June 19, 2011
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Heinz Analysis|
A Microeconomic Analysis|
[Estela Trejo]|

Term Paper: Microeconomic Analysis


Company Synopsis
H. J. Heinz Company was founded back in 1869 in Sharpsburg, Pennsylvania, by Henry John Heinz. Its first product was horseradish, although ketchup has now taken the spotlight. In 1926, Heinz celebrated its 57th Anniversary. In 1914, Heinz invented Heinz Salad Cream in England, which remains England’s favorite still today. Also during 1914, one of Britain’s favorite, Heinz Cream of Tomato was first introduced. In 1939, thousands of Heinz’s employees gathered throughout seventy U.S. cities to celebrate its 70th Anniversary. Later, in 1946, Heinz acquired StarKist, nearly twenty years later, Ore Ida was acquired, and then transformed into the leading frozen potato brand in the U.S. it is today. During 1972, Heinz proudly reaches the billion-dollar mark of sales. Just six years later in 1978, Heinz acquires Weight Watchers International, now the largest weight loss program in the United States. During 2002, Heinz begins producing its sauces, dressings, and toppings to support the growth of its foodservice business. Also in 2002, Heinz sells StarKist, amongst other brands, to Del Monte Foods Company in an all-stock transaction. Today, Heinz is a publicly traded company in the New York Stock Exchange, its ticker symbols are HNZ for common stocks, and HNZ PR for third cumulative preferred shares. Headquartered in Pittsburg, Pennsylvania, Heinz is now a leader of the food processing industry and it serves not only the United States, but the worldwide market too. Heinz now serves 200 hundred countries and it currently holds the number-one or the number-two market position in 50 of those countries. Heinz is considered the most global of U.S. based food companies. Its key products are ketchup, sauces, frozen foods, soups, beans, pasta meals, infant food and other processed foods. Heinz markets are segmented as Asia- Pacific, North American Consumer Products, Europe, U.S. Foodservice, and Rest of World. Some of its key brands are Heinz Ketchup, Classico, Ore-Ida, Heinz Beans, Bagel Bites, T.G.I. Friday’s, and Weight Watcher’s Smart Ones to name a few. Heinz manufactures and markets its food products for consumers, foodservice distributors, and institutional customers such as hotels, restaurants, hospitals and a variety of government agencies like the military; but it’s also known for leasing facilities. The facilities range from office spaces, to warehouses and distribution centers. Sales of its products are conducted through independent brokers, agents, and its sales organizations. Also through distributors to grocery accounts, convenience stores, pharmacies, and club stores. With all these business strategies and segment operations it is no surprise Heinz, a leader in its industry, is a global $10 billion company. Impressively, in the fiscal year ended April 29, 2009, full-year net income increased to $923 million and earnings per share rose to $2.90, from $2.63 a year ago. It’s not a shock either that it sells over 650 million bottles of ketchup a year, “and approximately two single-serve packets of ketchup for every man, woman and child on the planet,” as posted on Heinz.com. Market Structure

H. J. Heinz Company is part of the global market, and it has organized its product categories by geography and/or market in North America, Europe, Australia/New Zealand, and emerging markets in selected countries in Asia and Eastern Europe. While these business divisions have the essential traits of local focus, they essentially work together for employing the company’s global stratagem. H.J. Heinz, holding a market share of 60%, is characterized as one of the firms that makes up on oligopoly in the “Ketchup-Industry”. ConAgra’s Hunt’s Ketchup, enjoy 16% of market share, and Del Monte’s share is just 5.3%, while private-label brands hold the remaining percentile....
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