Last year’s global lockdowns prompted many leading corporations across almost every industry to explore the D2C business model. With more people than ever shopping online and seeking deeper connections with their preferred vendors, brands like Disney, Pepsico and Sonos made their own D2C pivots - with stellar results.
Heinz to Home was one of the most inspiring corporate startup stories in 2020, having started as an effort to get much-needed pantry supplies to customers during the lockdown. The service made it possible for customers who wanted to limit their grocery store visits and had trouble getting deliveries, to get their orders directly through the Heinz to Home website instead.
By cutting out the middle-man and dealing directly with customers, these brands expanded their profit margins, increased brand loyalty, and gained access to valuable customer data.
This is our Corporate Startup of the week:
Let’s take a closer look at how the concept behind Heinz to Home was born and how a small team of intrapreneurs brought it to life in just three weeks.
About The Kraft Heinz Company (KHC)
Co-headquartered in Chicago and Pittsburgh and founded in 2015, Kraft Heinz is the culmination of a merger between Kraft Foods and Heinz. They’re currently active in over 40 countries with over 39.000 employees - all on a mission:
“To sustainably grow by delighting more consumers globally.”
Kraft Heinz offers its customers a variety of products, including:
- Condiments and sauces
- Cheese and dairy
- Packaged meals
- Beverages
- Infant and nutrition products
Their portfolio includes over 200 legacy and emerging brands like Philadelphia, Velveeta, Planters, Maxwell House, Capri Sun, Ore-Ida, Kool-Aid and Jell-O, just to name a few.
With global sales of over $26B in 2020, the company recently announced the re-organisation of its portfolio into the following platforms:
- Easy meals made better
- Real food snacking
- Fast, fresh meals
- Easy indulgent desserts
- Flavourful hydration
In an effort to innovate within each of these platforms, Kraft Heinz’s strategy includes getting closer to their customers to better understand their needs, preferences and pain points. As described by President of International Business, Rafael Oliveira:
“We are keen to be close to the consumer. To develop products and channels that make us consumer-centric. Do I think D2C is going to grow? Yes. But this is not only a sales channel. The most important thing is getting close to the consumer, the insights we gain and the communities we build, where we understand what they want, the benefits they see in our products. so we can drive much more agility in our innovations.”
Heinz to Home meets many of these innovation goals, enabling Kraft Heinz to get closer to their customers, learn from their feedback and test out a new sales channel with minimum risk.
Meet Heinz to Home
Under most circumstances, a pandemic would be one of the worst possible times to start a new business, that is unless it’s a new D2C platform that provides customers with their favourite packaged foods.
The effort to launch Heinz to Home was spearheaded by Kraft Heinz’s Head Of Ecommerce UK&I, Jean Philippe Nier, who saw an opportunity to:
- Help customers access their favourite packaged goods during the crisis
- Test Kraft Heinz’s first D2C venture concept
Since many people were already having trouble getting into grocery stores and accessing delivery slots, agility was a vital factor during the development phase. As explained by Nier:
“If you wait two or three months, your opportunity has gone...”
With time quickly ticking away, a small team of four, set about developing the concept with a deadline of three weeks to make it all happen. This entailed many different aspects including, building the website and ensuring that all the necessary capability and fulfilment requirements were in place.
Establishing the right partnerships was a crucial part of meeting the steep three-week deadline:
- Good Growth helped build the front-end of the website
- Clements Create helped with the fulfilment
- Blue Light Card helped ensure that all frontline workers received free packaging and priority shipments on all their orders.
Within three weeks, the site was up and running, and the positive response was immediate, with 80 million impressions during the first weekend alone. The initial value proposition consisted of a bundle containing sixteen cans of popular Heinz products (e.g. Heinz Cream of Tomato Soup, Heinz Beanz and Heinz Hoops) to be delivered within three days - all for £10 plus £3,50 for postage.
The idea was to start the service with a minimum viable product (MVP) and then work towards developing newer offerings based on customer feedback. As explained by Nier:
“Our goal was to launch with a simple proposition with speed and agility whilst continuously improving aspects of the site and showing eagerness to innovate with new products and marketing campaigns to drive traffic to the site."
How does Heinz to Home Work?
Since its launch in 2020, Heinz to Home has taken heed to the feedback received from its customers and used it to create a wide variety of new bundles. Each one designed to suit different segments of their customer base. In an article from earlier this year, Nier described the process for creating newer bundle options:
“We listened to what people were saying on social media channels, and they were saying: 'We would like to have a little more choice, we would like to access your sauces, we would like to access your baby products'. We listened to them and created two new bundles – one for our sauces and one for our baby range.”
Some of their current offerings include:
- Three different baby bundles, including starter, stage one and stage two
- The student bundle
- The vegan bundle
- The sauces bundle
- The soups bundle
They even have “no added sugar” bundles in 2 varieties: essentials and beanz for those looking for healthier options. Customers can place an order for one of the available bundle options, build their own bundle or send them as personalised gifts.
Flexible subscription options are also available, enabling customers to get orders automatically every one to eight weeks with free delivery.
The benefits for Kraft Heinz
Launching Heinz to Home was a great way for Kraft Heinz to further their ambition to get closer to customers and gain clearer insights into their needs and preferences. President of International Business, Rafael Oliveira described the venture as:
“giving us valuable insights into consumer behaviour, enabling us to quickly test and learn from innovations...”
Nier sees similar potential in the Heinz to Home venture, describing it as follows:
“We see real value in this channel to be an insight and data channel for us. It's amazing, the amount of data you can collect on your shopper – feedback from them on products they want to see – where we can test and learn. It could be trying new products, getting feedback from our consumers and then scaling it and launching it into the market.”
Additional benefits for Kraft Heinz include:
- The opportunity to tap into a new customer base through new or improved offerings.
- Increasing customer loyalty by going D2C and offering a flexible subscription option.
- Creating a quick, low-risk revenue stream with relatively low cost and effort.
- Effectively leveraging corporate assets like industry know-how, brand trust and partnerships.
What’s next?
Today, the Heinz to Home delivery service is available in the United Kingdom, Ireland and Australia, with plans for expansion to other countries.
Earlier this year, Head Of Ecommerce for the UK & Ireland, Jean Philippe Nier, shared a few tips for companies who want to experiment with the D2C model:
“First and foremost, I would say brands should think of their D2C channel as a marketing and data insights channel, rather than just a sales channel. In doing so, there is more long-term gain for your business. My second tip would be to remain obsessed with improving your channel and platform using the data gleaned to scale your business. Lastly, I would encourage brands to be brave and try whatever it is they may be thinking of trying, whilst learning from any mistakes made along the way.”
These tips will certainly come in handy as The Kraft Heinz Company continues to expand its D2C efforts with new and improved products.
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