October 23, 2019 / 2:34 PM / 19 days ago

Kraft Heinz sees potential in baby food, will keep Plasmon

MILAN (Reuters) - Global packaged food group Kraft Heinz Co (KHC.O) will keep baby food line Plasmon and plans to leverage its ‘Made in Italy’ credentials to expand the brand abroad, Kraft Heinz Co’s general manager for Italy said.

FILE PHOTO: Plasmon products are seen on supermarket shelves in Milan, Italy, October 19, 2019. REUTERS/Francesca Landini

Earlier this year, the maker of Heinz ketchup explored the possibility of selling Italy-based Plasmon and other labels, as it grappled with write-downs for some of its brands and an investigation into its accounting policies.

A review has brought a change in strategy for Kraft Heinz Italia’s $210-million-revenue baby food business, which comprises Plasmon and smaller labels Nipiol, Cuore di Natura and Dieterba.

“The review has shown that Plasmon and the whole baby food business have growth potential to be exploited,” Kraft Heinz General Manager for Italy Felipe Della Negra told Reuters.

The world’s baby food sector is estimated to be worth $63 billion this year and is expected to grow annually by 5% between 2019 and 2023, according to market research company Statista.

The 117-year-old Plasmon sells a range of products including first milk, homogenized baby food, pasta and fruit compote for babies.

It is best known for its infant biscuits made with powdered milk, vitamins and minerals.

“We want to export more, banking on the fact that we are an Italian food company and we can guarantee a full disclosure over the ingredients of our baby food products,” Della Negra said in a phone interview.

He added the group was implementing a project to increase the use of Italian ingredients for Plasmon products under a deal signed with Italy’s agriculture ministry in May.

Currently, Kraft Heinz Italia makes only about 5% of its baby food revenue abroad, or $10 million, but the group’s ambition is to increase international sales 10 times in the next five years, Della Negra said, adding the group planned to expand in promising markets such as China.

Reporting by Francesca Landini; Editing by Mark Potter

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