Kraft Heinz 4Q16 Earnings Call Notes

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Bernardo Vieira Hees

Persistent foreign exchange headwind

“Headwinds remain from highly competitive retail markets to persistent foreign exchange headwind, especially in Europe.”

George Zoghbi

Deflation should turn to inflation

“First, in measured channel, the negative impact from commodity deflation on category growth persisted during 2016 and longer than we originally thought, although, we currently expect that this is likely to turn to inflation as 2017 progresses. ”

Paulo Basilio

Reached bottom on commodities

” price was higher for the year and in Q4, despite persistent headwinds from deflation in key commodities. Although, it appears, we’ve now reached the bottom on commodities and are likely to have to contend with commodity inflation beginning in Q1 of this year. ”

2017 is likely to be an inflation year

“Hi, Jason, this is Paulo. So when we said in terms of the commodity, we said that in 2016 we had a deflationary year. We mentioned at the beginning – not the beginning, in the mid of the year that we would expect this benefit to stay but it didn’t. And in 2017, when we take a look at the spot and forward rates, we’re likely to see year-over-year inflation. And we’re already seeing that in cheese, coffee, bacon, as George mentioned. So that’s what we are today.