- Kraft Heinz is launching a customizable sauce dispenser with more than 200 possible combinations for restaurants.
- The company hopes to appeal to consumers looking for more variety, spiciness and sweetness in their sauces and to learn what new condiments it should launch in grocery stores.
- Kraft Heinz has been leaning into its away-from-home segment to drive sales as part of its broader turnaround strategy.
For more than 125 years, Heinz bottles have touted "57 varieties," a number completely made up by its founder with little to no real-life application.
Now, Kraft Heinz wants to offer customers more than three times that number of condiment options through a new customizable sauce dispenser, created for food-service clients.
The machine, called the Heinz Remix, is the latest example of Kraft Heinz leaning into its away-from-home segment to grow sales. The company has expanded distribution in airports, launched a deluxe version of its mayonnaise for chefs and reformulated its Lunchables so they can be served in schools. In the first quarter, Kraft Heinz's North American food service division reported sales growth of more than 25%.
The company will unveil the Remix at the National Restaurant Association Show, which kicks off Saturday in Chicago. It plans to pilot the dispenser in restaurants as soon as the end of this year.
"We are very, very clear that away-from-home and foodservice gives us an opportunity to test, to learn, to understand and to build trends much earlier than we have done historically," said Peter Hall, Kraft Heinz's head of its North American food service division.
Hall said the company is still working through the specific business model for the Heinz Remix. It's also looking at how the dispenser could be used for drive-thru orders, he said. But the machine requires more time and effort than throwing a handful of ketchup packets in a takeout bag, which will likely pose a challenge for speed-focused drive-thru lanes.
To make a customized sauce, consumers will use the touchscreen to select a base of either ketchup, ranch, 57 Sauce or BBQ sauce; add in "enhancers" that include jalapeno, smoky chipotle, buffalo and mango; and set one of three intensity levels.
Alan Kleinerman, head of disruption at Kraft Heinz, told CNBC his favorite combination is ranch dressing, with a heavy dose of jalapeno and a lighter infusion of smoky chipotle. But a dark horse — mango ketchup — generated the most buzz around Kraft Heinz's office recently, he said.
The company created the Heinz Remix in just six months, with helping hands from Microsoft, device engineers and internet-of-things developers.
"We've been on this journey to make innovation the number one growth driver across our business," Kleinerman said. "To do that, we knew we needed to operate differently than we had in the past, to think bigger, to be more consumer-centric."
The Oscar Mayer owner is in the middle of a turnaround after its former management's focus on cost-cutting led to eroding sales in North America. Its troubles culminated in 2019 as it disclosed $16.6 billion in write-downs on iconic brands, such as Cool Whip and Kraft, and an SEC probe into its accounting.
In its latest quarter, Kraft Heinz reported North American sales grew by 6.2% as higher prices offset shrinking demand from inflation-weary shoppers. Shares of Kraft Heinz have fallen 3% this year, giving it a market value of $48.5 billion. Shares of the S&P 500 have risen 7% in the same time.
While the Heinz Remix is new, its design feels familiar, thanks to its resemblance to the Coca-Cola Freestyle machine, which was launched nearly 15 years ago.
Today, Coke's touchscreen drink dispensers can be found in more than 50,000 locations, including McDonald's restaurants, AMC movie theaters and Target stores. Customers' favorite custom orders from Freestyle machines have inspired the beverage giant to introduce new bottled drinks, such as Sprite Cherry and Coke with Cherry and Vanilla.
"They showed the power of iteration and innovating as they received feedback," Kleinerman said of Coca-Cola.
But he added that consumers and food service operators were the primary inspiration for the Heinz Remix.
"I think it's easy enough to draw the parallels, but this was an opportunity born through the original insights that came through and our desire to really change and build on the experience that consumers have today," Kleinerman told CNBC.
Customers have been asking Kraft Heinz for condiments that are spicier or that mix sweet and savory, while restaurant operators told the company they wanted more variety, according to Kleinerman.
Like Coca-Cola, Kraft Heinz also plans to use the data from its sauce dispenser to decide what new products to release in grocery stores. The hope is that the Heinz Remix will drive new products that customers actually want, rather than those they say they want — but never buy.
In recent years, Heinz has already released a number of condiments inspired by combining its most-popular sauces, including "mayochup," "kranch" and "buffaranch."