The operator introduces the Kraft Heinz Company's Q4 results conference call and hands it over to Anne-Marie Megela, who is the Head of Global Investor Relations. She mentions that forward-looking statements will be made and cautions about potential risks and uncertainties. Non-GAAP financial measures may also be referenced. Carlos Abrams-Rivera, the new CEO, will give opening comments and host his first earnings update.

The speaker thanks their colleagues for a solid 2023 and discusses the future plans for Kraft Heinz. They expect to drive growth, return to positive volumes, and reinvest in the business. They then open the call for questions, with the first one asking about the expected slowdown in organic sales in the first quarter. The speaker explains that while the numbers may be similar to the fourth quarter, the drivers behind them are different, with factors such as trade timing and retail inventory deload impacting the North America and emerging market businesses.

In the third quarter, the company expects better performance in North America due to no repeat of trade timing and inventory deload. They anticipate healthy sellout levels and possibly even better results in the first quarter. However, there may be a shipment phasing in emerging markets that could affect growth, with the region expected to grow in the mid single digit range. The fourth quarter saw pressure in the Easy Meals platform, particularly in the mac & cheese business due to SNAP exposure. However, the company plans to invest in new campaigns and innovation to improve the trajectory going forward.

The company's Foodservice division saw a deceleration in North America compared to previous quarters and underperformed relative to the industry. There may be a trade or inventory deload happening in Foodservice, and the company is seeing mixed performance in different channels within the division. The company expects Foodservice to be in line with their algorithm for the year, but there is uncertainty due to potential trade and inventory impacts.

Carlos Abrams-Rivera clarifies that their Foodservice business is growing ahead of the industry in both North America and International. They expect this trend to continue in 2024 with high single-digit growth. They plan to further drive growth by entering new channels and leveraging technology and iconic brands. Bryan Spillane questions their performance compared to the industry, but Abrams-Rivera assures him that they are actually performing well and offers to follow up with him.

In response to a question about Coca-Cola's expected return to growth, Carlos Abrams-Rivera, the company's CEO, explains that there were specific factors that affected their performance in the fourth quarter, but those will not be repeated in the future. He also mentions their plans to continue investing in emerging markets and their Foodservice business, as well as their expected recovery of market share in North America through innovation and strong partnerships with retailers.

The speaker is confident that the company's top line will improve in the second half of the year due to a return to historical activity levels, investments in innovation, and the absence of certain headwinds. They also expect free cash flow conversion to improve slightly in 2024, but it will still be in the 80s due to continued investments in CapEx and taxes.

The company's working capital is expected to improve due to their investments. They plan to discuss these investments further at an upcoming conference. The company is not currently seeing any slowdown in consumer demand, and is actually seeing positive growth in their away-from-home business. They are also expanding into new channels to drive growth.

The speaker discusses the company's plan to expand its away-from-home business and drive growth through multiple channels. They also mention the expected increase in gross margin for the year, driven by COGS efficiencies and revenue growth management. The speaker also addresses a question about the drivers behind the company's Q4 results in North America and how they plan to sustain those factors in the future.

Carlos Abrams-Rivera explains that regardless of income levels, consumers are looking for value and are under pressure. They are making smaller trips to stretch their dollar and are shopping at places like Dollar Stores or club stores. To address this, the company is intentionally investing in their brands and expanding distribution channels, such as introducing new brands and innovation in club channels. In 2024, they plan to have 20% more offerings in club channels than in 2023.

The company is focusing on improving their assortment of barbecue, mustard, crab, mayo, and salad dressing in Dollar Stores. They currently have over 300 SKUs and plan to increase by 10% year-over-year. They are also investing in innovation to cater to different shopping behaviors and occasions. In North America, net sales declined due to a trade accrual release from the previous year and inventory deload. However, this was mainly due to a stronger than expected impact of SNAP in Q4, which is expected to continue in Q1 of 2024.

In the fourth quarter, there was a higher concentration of emergency SNAP allotments, leading to a greater headwind for the company. This was underestimated due to the elasticity of the situation. In terms of commodity exposure, there is deflation running through on the ingredient and packaging side, but other factors such as conversion costs make it a continued inflationary year. The company also had a $25 million write-down for systems related to their modernization efforts.

The speaker discusses the impact of commodity inflation, which is mainly driven by labor costs and transportation expenses. They also mention a $25 million investment write-off, which was redirected towards technology that will be more relevant for the company's future. The speaker emphasizes the company's focus on technology as a competitive advantage and their willingness to make decisions that benefit the business in the long-term. Lastly, they are asked about the outlook for efficiency improvements and mention over-delivery in 2023, but do not provide specifics for 2024. They mention potential savings from automation and fixed assets.

The speaker explains that the company expects to see benefits from efficiency improvements in 2023 and 2024 due to changes in supply chain and the impact of the pandemic. They also mention various initiatives and partnerships in place to further improve efficiency and create future benefits.

The speaker discusses the impact of being together in Florida on the company's performance. They also mention the solid performance in emerging markets and the focus on value in both the US and Europe. They highlight specific products that are meeting consumer demand for value and innovation.

The speaker discusses their approach to the market in the U.S., which involves ensuring they have the right products and focusing on their benefits. They thank the participants and announce the end of the call.

This summary was generated with AI and may contain some inaccuracies.