Kraft Heinz looks inside to tap new CFO Andre Maciel

Dive Brief:

The Kraft Heinz Company announced it has tapped Andre Maciel, currently U.S. CFO and head of digital transformation, to succeed Paulo Basilio as the food maker’s new global chief financial officer, effective March 2.
Basilio has been with the company since 2013 and served twice as CFO, most recently assuming the role in 2019. During his recent tenure he sold off its nuts business for $3.35 billion in 2021, brought down debt and led the company’s finances through the early pandemic demand surge, according to The Wall Street Journal.
In September, Kraft Heinz paid a $62 million fine to resolve a Securities and Exchange Commission (SEC) investigation that found the procurement team had doctored the language in some supplier agreements to show lower cost-of-goods sold (COGS) than actually existed, and led the finance and accounting team to misrepresent its financial performance. The company paid the penalty without admitting or denying the findings and said it has taken action to improve its internal policies, procedures and internal controls over financial reporting.

Dive Insight:

Under the announced CFO transition plan, Basilio will step down on March 1 and remain with the company as a strategic advisor through August 2022, supporting Maciel during the transition.

Basilio remains a partner at Brazilian-American private equity firm 3G Capital, which in 2015 joined with Warren Buffett’s Berkshire Hathaway to drive the merger of Kraft and Heinz to create the global food and beverage giant. He was seen as a "seasoned veteran" when he was tapped to replace then outgoing CFO David Knopf in a year of upheaval for the company that included the disclosure of a subpoena from the SEC related to the procurement scandal.

Maciel has been with the company since 2013 and has held such roles as VP of Global Financial Planning and Analysis for the H.J. Heinz Company, and was also managing director of Continental Europe where he was responsible for the Kraft Heinz business in Austria, France, Germany, Italy, Portugal, Spain and Switzerland. Maciel holds a bachelor’s degree in Industrial Engineering from Universidade de São Paulo as well as an MBA from INSEAD.

The company disclosed in an 8-K filing that the compensation committee approved an annual base salary of $650,000 for Maciel as part of his compensation package.

Maciel is also likely a good fit for 3G, which still has a stake in the company, according to Josh Crist, co-managing partner at executive search firm Crist | Kolder Associates. Maciel doesn’t have a direct affiliation with 3G "but he’s the type of profile culturally that they seek … and he has the strategic finance plus operational skill set that they love," Crist wrote in an email.

Kraft Heinz’s choice to promote from within also signifies that the company wants to stick with its current strategy. "Kraft is creeping back up to pre-pandemic financial status, so going in house can only be seen as 'keeping the train rolling,'" he wrote. It comes as external hiring of CFOs dipped last year to 38.5% from 43.1% in 2020, according to a recent study.

Inflation is one of the most pressing issues that Maciel will face as he takes the reins, according to Erin Lash, director of Consumer Equity Research at Morningstar. To address rising costs, the company will need to consider such steps as raising prices, achieving more cost efficiencies through consolidating vendors or adding automation or other means, she told CFO Dive.

Going forward the giant food company and others in the packaged sector will also have to navigate a changing landscape as "food consumption will revert such that a greater portion of budgets are expended outside of the home, in line with pre-pandemic levels," according to a Dec. 14 Morningstar report.

"The onus is on Kraft Heinz and others in the space as we emerge from the pandemic as to what extent their products will remain top of mind in a slowing demand environment," Lash said.

Concern among CFOs and accountants about surging operating costs has risen to the highest level since early 2019, as rebounding demand collides with a pandemic-induced disruption in supply chains and stokes inflation, the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA) found in a survey of 2,471 members, including 150 CFOs.