{"id":13993,"date":"2019-08-12T09:00:30","date_gmt":"2019-08-12T13:00:30","guid":{"rendered":"https:\/\/www.vrg.org\/blog\/?p=13993"},"modified":"2019-08-07T14:11:07","modified_gmt":"2019-08-07T18:11:07","slug":"kraft-shareholder-resolution-protein-diversification","status":"publish","type":"post","link":"https:\/\/www.vrg.org\/blog\/2019\/08\/12\/kraft-shareholder-resolution-protein-diversification\/","title":{"rendered":"KRAFT SHAREHOLDER RESOLUTION \u2013 PROTEIN DIVERSIFICATION"},"content":{"rendered":"\n

A reader sent us this Kraft Shareholder proposal and Kraft’s response. If you are a Kraft shareholder, you may want to take a close look when you vote.

SHAREHOLDER PROPOSALS In accordance with SEC rules, we are including the following shareholder proposals (Proposals 4 and 5), along with the supporting statement of the shareholder proponents. Kraft Heinz is not responsible for any inaccuracies in the shareholder proposal and supporting statement. The Board recommends that you vote AGAINST such proposals for the reasons set forth in the Kraft Heinz\u2019s Statements in Opposition, which follows each of the Proposals 4 and 5 below. In accordance with Rule 14a-8(l)(1), the names, addresses and shareholdings of the filers of these proposals will be supplied upon request. ************************************************************************PROPOSAL 4. SHAREHOLDER PROPOSAL \u2013 PROTEIN DIVERSIFICATION WHEREAS: Consumers are eating less meat and demanding more plant proteins\u2014many out of concern for the environment, animal welfare, and\/or their own health. Companies with limited exposure to sustainable protein options may face a number of business risks including reputational damage due to changing consumer expectations and a loss of market share to competitors who have more rapidly adapted to an evolving market. Consider that: \u2022 In 2018, sales of plant-based meat alternatives increased 24% over the prior year, resulting in $3.3 billion in sales. Conversely, sales of animal-protein products increased only 2% during the same time frame. \u2022 Segment growth for plant-based products is expected to increase by 7.7% annually over next 5 years ii and is projected to make up one third of the protein market by 2054.iii \u2022 70% of omnivores are substituting a non-meat protein in meals at least once per week.iv Kraft Heinz notes in its 10-K that \u201cThe food and beverage industry is highly competitive across all of our product offerings… We may also need to increase or reallocate spending on marketing, retail trade incentives, materials, advertising, and new product innovation to maintain or increase market share.\u201d Given the competitive marketplace, many competitors are increasingly incorporating plant-based acquisitions and product reformulation within growth strategies. Unilever has a public strategy to offer more plant-based options, highlighted by the reformulation of iconic products such as Hellman\u2019s mayonnaise and Ben & Jerry\u2019s ice cream. Campbell\u2019s has joined the Plant Based Foods Association, a group that works to expand the market for plant-based foods, and CEO Mark Clouse specifically cited plant-based products within the strategy for growth, noting that \u201cOur engagement with consumers inspired us to evolve some of our traditional recipes, and we\u2019ve crafted new products that deliver more whole grains, vegetables, lean protein and plant-based options.\u201d Currently, Kraft Heinz mentions plant-based protein once within its publicly available materials as a component of the company\u2019s push towards \u201cBetter Nutrition\u201d. This page of the sustainability report simply i https:\/\/plantbasedfoods.org\/consumer-access\/nielsen-data-release-2018\/<\/a> ii https:\/\/www.alliedmarketresearch.com\/press-release\/globalmeat-substitute-market.html<\/a> iii https:\/\/www.globenewswire.com\/news-release\/2015\/02\/24\/920807\/0\/en\/Alternative-Proteins-to-Claim-aThird-of- the-Market-by-2054.html<\/a> iv https:\/\/chicagohealthonline.com\/shining-light-plant-proteins\/<\/a> 27 has pictures of products Kraft Heinz produces that fall under the category of plant-based without discussion of the Company\u2019s broader goals and strategies. Kraft Heinz\u2019s portfolio is largely reliant on products with animal-protein bases and has yet to reformulate to offer plant-based alternatives, positioning the firm behind some competitors. By increasing disclosure regarding Kraft Heinz\u2019s approach toward protein diversification, investors would be better positioned to evaluate the Company\u2019s direction within a rapidly evolving market. RESOLVED: Shareholders of Kraft Heinz request the Board to issue a report at reasonable cost, omitting confidential information, detailing the Company\u2019s long-term strategy towards protein diversification within its product catalogue. SUPPORTING STATEMENT: Although we defer to management for the precise contents, investors believe that meaningful disclosure within the report could include: \u2022 Quantitative metrics detailing the sales of alternative protein products; \u2022 Details regarding capital allocation for research and development; and \u2022 How these considerations inform the growth strategy of the Company, including quantitative company-wide goals to diversify protein sources and reformulate existing product offerings. KRAFT HEINZ\u2019S STATEMENT IN OPPOSITION TO PROPOSAL 4 At The Kraft Heinz Company, we believe in living our Vision \u2013 To Be the Best Food Company, Growing a Better World. From our quality controls to the relationships we have with our growers and suppliers, we are committed to responsible business practices extending to every facet of our business, and continuous evaluation to identify better and more sustainable ways to operate. We believe in making the foods people love even better. Finding ways to improve our products is something we do every day, because consumers should feel good about eating our products and serving them to their families. We remain committed to improving the nutrition and wellness profiles of our products to support consumers\u2019 wants and needs through product renovation, innovation and nutrition resources. Some of our efforts include: \u2022 Kraft Heinz follows guidelines for nutrition & wellness that focus on ingredients to limit, and will expand these nutrition guidelines globally with a target to achieve 70 percent compliance by 2023. We are also focused on increasing beneficial nutrients\/food groups\/ingredients and other wellness attributes to give consumers options that support a healthier lifestyle. \u2022 Kraft Heinz is committed to simplifying our ingredient lines by offering products with no artificial dyes, flavors and\/or preservatives, including: Oscar Mayer Hot Dogs, Kraft Macaroni and Cheese, Philadelphia Cream Cheese, Capri Sun Juice Drinks, Polly-O String Cheese, Oscar Mayer Natural Deli Meats, Jell-O Simply Good, and SmartMade meals. \u2022 We offer a variety of low or reduced-calorie products, including Capri Sun Roarin\u2019 Waters, SugarFree Jell-O Desserts, Philadelphia Light Cream Cheese, Kraft Fat-Free Mayonnaise, Fat-Free Miracle Whip, Kraft 2% Milk Cheeses, Kraft Lite and Fat-Free Salad Dressings and lean meat options including Oscar Mayer Lean Beef Hot Dogs and Deli Fresh Honey Smoked Turkey Breast. Additionally, our Smart Ones and SmartMade meals offer balanced options to help manage calories. <\/p>\n\n\n\n

With respect to\nsustainable protein supply chains, we are aware of increasing consumer demand\nfor plantbased protein options, and we continue to invest in and innovate our\nplant-based protein offerings. One example is through our BOCA brand. Founded\nin 1979 and acquired by us in 2000, BOCA products have a soy protein base and\nhelp consumers who desire meatless alternatives get protein, fiber and other\nnutrients from a competitively-priced brand. We have helped grow the BOCA\nbusiness through innovation, redesigned packaging, improved formulas and\nincreased consumer marketing. As a result, we have expanded the line of\nproducts from BOCA Meatless Burgers to a diverse family of products, including\nBOCA Veggie Ground Crumbles, BOCA Chik\u2019n Patties, BOCA Chik\u2019n Nuggets, BOCA\nFalafel Bites, BOCA Skillet Meals and other various vegan and non-GMO soy\noptions. <\/p>\n\n\n\n

Beyond our investment in\nthe BOCA business, we are supporting disruptive innovation to add more\nconvenience, variety, flavor to our portfolio. For example, Springboard, a\nplatform we launched in 2016 to nurture, scale and accelerate growth of\ndisruptive brands, recently graduated its second incubator program class, which\nincludes brands like BRAMI, a freshly marinated Italian lupini bean snack, KA POP!,\nancient grain popped chips and Tiny Giants, a plant-based yogurt. We believe\nsuch efforts, as well as those further described in the Kraft Heinz CSR Report\npublished in December 2017, reflect our commitment to improve and diversify our\nproduct categories to satisfy a broad spectrum of consumer preferences. Given\nour public statements, track record and current programs related to\ndiversification of our products, we believe the additional report requested by\nthis stockholder proposal is unnecessary, not in our stockholders\u2019 best\ninterests and redundant to our current practices and initiatives. For the\nforegoing reasons, the Board unanimously recommends that you vote AGAINST this\nproposal <\/p>\n","protected":false},"excerpt":{"rendered":"

A reader sent us this Kraft Shareholder proposal and Kraft’s response. If you are a Kraft shareholder, you may want to take a close look when you vote. SHAREHOLDER PROPOSALS In accordance with SEC rules, we are including the following shareholder proposals (Proposals 4 and 5), along with the supporting statement of the shareholder proponents. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-13993","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/posts\/13993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/comments?post=13993"}],"version-history":[{"count":1,"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/posts\/13993\/revisions"}],"predecessor-version":[{"id":13994,"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/posts\/13993\/revisions\/13994"}],"wp:attachment":[{"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/media?parent=13993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/categories?post=13993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vrg.org\/blog\/wp-json\/wp\/v2\/tags?post=13993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}