Kraft Heinz looks to the school lunch market for growth
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Kraft Heinz Company (NASDAQ:KHC) sees a new revenue stream in offering lunch at schools in the U.S. Some school cafeterias are expected to start offering prepackaged meal kits as early as this fall, according to The Wall Street Journal, although there has been some pushback from parent groups and nutrition advocates about adding processed, branded foods to school menus.
The food giant has a broad strategy to introduce its brands to a new generation of consumers after losing ground to health-focused brands and private labels. Current Kraft CEO Miguel Patricio and Carlos Abrams-Rivera, the CEO successor in 2024, stated in an interview that the company identified schools as a key way to expand its food-service division and help drive grocery store sales as well. Lunchables is seen as a strategic way to enter the school lunch market. "The kids have it and then they go to retail and they see it...[It's] a penetration machine," stated the execs to the WSJ.
During the company's earnings call (transcript), Kraft (KHC) execs highlighted that the company is taking Lunchables and Capri Sun products into the school lunch market. Earlier this year, Kraft Heinz unveiled new versions of its turkey-and-cheese and pizza Lunchables, re-engineered to comply with federal guidelines for the National School Lunch Program.
For Q2, Kraft Heinz Company (KHC) reported organic sales rose 4.0%, with an 11.0% rise in pricing offsetting a sharp 7.0% decline in volume. The organic sales tally was short of the consensus estimate of +4.6%. Organic sales were up 1.3% for the North America business and rose 13.2% for the international business. Total sales increased 2.6% year-over-year during the quarter to $6.72B, including a negative 1.2 percentage point impact from foreign currency and a negative 0.2 percentage point impact from acquisitions and divestitures. Adjusted EBITDA increased 6.0% year-over-year to $1.6B, primarily driven by higher pricing and efficiency gains. Adjusted EPS was up 12.9% to $0.79 to top the consensus mark of $0.76.
Shares of Kraft Heinz (KHC) were up 0.40% in premarket trading on Monday. The packaged food stock is down 17.46% on a year-to-date basis.

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