The food company will be the exclusive provider of certain condiments, mac and cheese, and cream cheese at Disney's North American parks and cruise line
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Kraft Heinz $KHC struck a multiyear partnership with Disney $DIS that makes it the exclusive provider of certain condiments, macaroni and cheese, and cream cheese at Disney's North American parks, resorts, and cruise line, while also allowing the food company to feature Disney characters on products sold in stores.
Ten Kraft Heinz brands fall under the agreement, among them Heinz, Philadelphia, and Kraft Mac & Cheese, according to the Wall Street Journal. Beyond parks and stores, the arrangement reaches into Disney's studios and streaming platforms, with Kraft Heinz putting money behind content that the two companies will develop together.
Nicolas Amaya, Kraft Heinz's new head of its North America business, described some of the possibilities the deal could produce: condiment stations at Disneyland with ketchup dispensers shaped like Star Wars lightsabers, Cinderella-branded mac and cheese, or Jet-Puffed marshmallows featuring Olaf from Frozen. "That's what marketing is about today," Amaya told the Wall Street Journal. "It's about creating experiences that are memorable."
For Kraft Heinz, the partnership fits into a wider campaign to arrest a prolonged slide in sales and reinvigorate its portfolio of brands. Kraft Heinz described the deal as a move to push its products into experiential commerce rather than relying solely on traditional retail channels. Amaya noted that many food trends originate in restaurants and entertainment venues. "A lot of the things that happen here actually translate to retail," he said.
Kraft Heinz Chief Executive Steve Cahillane, who took over earlier this year, said the company plans to spend $600 million on marketing, sales, research and development, and related areas to support a recovery in its U.S. business. The Disney deal will draw on those funds.
The Disney pact is not the first such arrangement Kraft Heinz has pursued; earlier this year the company reached an agreement with the National Football League to expand Heinz condiments' footprint at stadiums nationwide and to incorporate NFL branding into its own promotional efforts.
Rather than proceeding with the anticipated restructuring, Cahillane reversed direction not long after his arrival, deciding that the stronger path was to address Kraft Heinz's underlying challenges from within. He then appointed Amaya, a former colleague from cereal maker Kellogg $K and its spinoff snack business Kellanova, to lead the North America operation. Disney operates two major U.S. resort complexes, in Anaheim, California, and Orlando, Florida, each containing theme parks, hotels, and restaurants.
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