At a tomato farm in Woodland, California, Kraft Heinz CEO Steve Cahillane sat down with NBC News to explain how the company is trying to keep its legacy brands within reach of shoppers whose grocery budgets have been squeezed by years of high inflation. The conversation, conducted by chief consumer investigative correspondent Vicky Nguyen with producer Jing Feng, focused on a central challenge: how to remain relevant when store-brand products have shed their old reputation for inferior quality.
The Private-Label Threat
Household budgets have been under pressure for years, and consumers have responded by rethinking what they put in their carts. A McKinsey study cited in the discussion found that shoppers are moving away from national brands, and 85% now regard private-label goods as equal to or better than their branded counterparts. That shift has made the supermarket aisle a tougher battlefield for companies like Kraft Heinz, which sells more than 200 brands, including Heinz ketchup, Kraft Mac & Cheese, Oscar Mayer, Capri Sun, Miracle Whip, Velveeta, Philadelphia and Kool-Aid.
The stakes are visible in the numbers. Kraft Heinz’s North America net sales fell about 5% last year, and Cahillane, who took the CEO role in January 2026, has been tasked with turning the business around. He acknowledged that a strong brand name alone no longer guarantees a spot in the shopping basket. “We have to earn the right to be in that basket,” he said, noting that consumers are working with limited food budgets.
Promotions With a Calendar Strategy
Rather than slashing list prices across the board, Kraft Heinz is leaning on promotions timed to the start of the month. That is when many households do their biggest grocery runs, Cahillane explained, because paychecks and SNAP benefits tend to arrive early in the month. The company coordinates these discounts with retail partners, aiming to capture shoppers at the moment they are most likely to stock up.
Erin Lash, a senior director at Morningstar, said such promotions can be effective at driving an initial purchase. But Mark Mayer, an associate professor at Indiana University, warned that they can become a slippery slope. If shoppers learn to buy only when a deal is available, the promotion defeats its own purpose by training customers to wait for discounts rather than building lasting loyalty.
Alexander Chernev, a professor at the Kellogg School, added that competing primarily on price is not a great position for established brands. Aggressive price cuts, he suggested, can erode the very brand identity that justifies a premium in the first place.
Coffee Cuts and Smaller Packs
Kraft Heinz is making its most significant price reductions in its coffee business, home to Maxwell House and Gevalia. The move comes as coffee futures have dropped 30% from a year ago, giving the company room to pass some relief to consumers. Cahillane was clear, however, that this does not signal a broad retreat on list prices. “We are not lowering list prices across the board,” he said.
Beyond discounts, the company is offering smaller package sizes. Cahillane rejected the label of shrinkflation, arguing that these options are designed to address the needs of smaller families or shoppers who want to avoid waste. A 32-ounce ketchup bottle, for example, may be too much for some households, while an 8-ounce bottle fits their needs and their budget. Other packaged food companies, including PepsiCo, Campbell’s and Mondelez, have also adopted smaller formats.
Quality as the Premium Argument
For Cahillane, the value proposition is not just about price. He maintains that quality justifies a premium, and that the company’s brands must deliver on that promise to remain competitive. The challenge is to balance affordability with the perception of superior taste and reliability that has historically set national brands apart.
As shoppers continue to weigh every dollar, Kraft Heinz is betting that a combination of well-timed promotions, flexible pack sizes, selective price cuts and a focus on quality will keep its legacy products in the basket. Whether that strategy can reverse the sales decline and fend off private-label rivals will depend on whether consumers agree that the brands are worth the premium.
