Kraft Heinz Seeks to Reduce Carbon Emissions by Over 99% Across 10 U.S. Plants With Help from a $170 Million Investment from U.S. Department of Energy

Rhea-AI Summary

Kraft Heinz secures up to $170 million in federal funding from the U.S. Department of Energy for clean energy projects at 10 U.S. plants. The investment aims to reduce emissions by over 99% from 2022 levels, supporting the Company's goal of achieving net-zero carbon emissions by 2050.

Insights

Environmental Sustainability Analyst

The engagement of Kraft Heinz with the U.S. Department of Energy's Office of Clean Energy Demonstration represents a strategic move towards environmental sustainability, which is increasingly becoming a focal point for investors who are concerned with corporate responsibility and long-term viability. The projected reduction in annual emissions by over 99% from 2022 levels at 10 of the company's U.S. plants is a testament to the company's commitment to its net-zero target by 2050. This transition to clean energy technologies such as heat pumps, electric heaters and solar photovoltaic not only aligns with global efforts to combat climate change but also offers a competitive edge as consumers and investors alike favor environmentally conscious companies.

Moreover, the anticipated 23% decline in overall energy use and 97% reduction in natural gas use will likely translate into significant cost savings in the long run, despite the initial investment. These savings could improve the company's bottom line and potentially increase shareholder value. The reduction in total water use by 3% also demonstrates a holistic approach to resource efficiency. However, it is important to monitor the implementation of these technologies to ensure that the forecasted environmental and financial benefits are realized.

Renewable Energy Technology Specialist

The adoption of a diverse range of clean energy technologies by Kraft Heinz showcases the company's innovative approach to decarbonization. The integration of anaerobic digesters and biogas boilers, for instance, not only reduces reliance on fossil fuels but also processes waste into renewable energy, creating a circular economy within the plants. The use of thermal energy storage can further enhance energy efficiency by balancing load and supply, leading to more stable energy costs.

However, the scalability and replicability of these technologies across different food and beverage manufacturers could be challenging due to varying operational demands and regional differences. It is promising to see that Kraft Heinz plans to use these sites as a model for future upgrades, potentially setting industry benchmarks. The creation of 500 construction jobs and the focus on skill development for employees suggest a positive socioeconomic impact, aligning workforce capabilities with future industry needs.

Financial Analyst

From a financial perspective, the federal funding of up to $170 million is a substantial capital influx for Kraft Heinz, which could mitigate the risks associated with the capital-intensive nature of clean energy projects. This funding could serve as a lever to attract further investment, both public and private, in the company's sustainability initiatives. Investors should note the potential for enhanced brand reputation and consumer loyalty as a result of these eco-friendly measures, which could drive sales growth.

However, investors should also be aware of the risks involved in the implementation of new technologies, such as potential delays or cost overruns. The long-term financial benefits hinge on the successful and timely execution of these projects. It will be important to track the progress of these initiatives and their impact on Kraft Heinz's operational efficiency and profitability. The company's engagement with entities like ENGIE for strategic consulting indicates a methodical approach, but the actual return on investment will be critical to evaluate in the coming years.

Funding marks the Company’s first selection for federal funding to focus on implementing clean energy projects, supporting its ambition of net-zero carbon emissions by 2050

PITTSBURGH & CHICAGO--(BUSINESS WIRE)-- Today, The Kraft Heinz Company (Nasdaq: KHC) (the “Company” or “Kraft Heinz”) announced it has been selected for award negotiations to receive up to $170 million from the U.S. Department of Energy’s Office of Clean Energy Demonstration to support the implementation of clean energy projects at 10 of the Company’s U.S. plants. These plants produce various food products, and these new projects’ technologies can be replicated across a wide range of food and beverage manufacturers. This investment will fund part of “The Delicious Decarbonization Through Integrated Electrification and Energy Storage” project, helping these locations reduce annual emissions by more than 99% from 2022 levels – a significant step forward in the Company’s global net-zero ambitions.

“At Kraft Heinz, we’re on a journey to achieve net-zero greenhouse gas emissions by 2050,” said Marcos Eloi Lima, Chief Procurement and Sustainability Officer at Kraft Heinz. “This investment will give us critical resources to make necessary improvements in our plants to help increase their energy efficiency and reduce emissions. This investment recognizes our continued efforts to reduce our environmental footprint, and we’re eager to get started.”

Kraft Heinz will use the funds to install a range of technologies, including heat pumps, electric heaters, electric boilers, anaerobic digestors, biogas boilers, solar thermal, solar photovoltaic, and thermal energy storage. The Company anticipates the project will create an estimated 500 construction jobs across the 10 plant sites, providing opportunities for employees to receive additional training and develop new skills related to the new technologies.

“The infrastructure changes made at these 10 plants will allow us to replicate successful technologies and processes across our remaining U.S. plants and globally, making us more efficient as we continue to make upgrades to more locations,” said Helen Davis, SVP and Head of North America Operations at Kraft Heinz. “I’m proud of the impact this project and award will have on our facilities, but also on our current and future workforce and the communities that surround our operations.”

The 10 sites include Champaign, Ill.; Columbia, Mo.; Fremont, Ohio; Holland, Mich.; Kendallville, Ind.; Lowville, N.Y.; Mason City, Iowa; Muscatine, Iowa; New Ulm, Minn.; and Winchester, Va.

The project will significantly benefit these 10 plants by 2030, as estimated below (compared to 2022 levels):

• Overall energy use after the implementation of energy efficiency measures, electrification and onsite generation will decline by 23% (from 1043 GWh/y to 801 GWh/year).
• Natural gas use will decline by 97%, with the remaining 3% being used for standby equipment.
• Total water use will be reduced by 3%.

To develop the application, Kraft Heinz engaged ENGIE, a company that provides strategic consulting, global reporting and implementation support to corporations, governmental organizations, and municipalities on their net-zero journeys.

As part of the Company’s ongoing work with the U.S. Department of Energy, Kraft Heinz joined its Better Climate Challenge and Renewable Thermal Collaborative to work across industries to exchange ideas and share repeatable models that can help accelerate decarbonization.

Learn more about Kraft Heinz’s broader ESG goals in the Company’s 2023 ESG Report.

About The Kraft Heinz Company

We are driving transformation at The Kraft Heinz Company (Nasdaq: KHC), inspired by our Purpose, Let's Make Life Delicious. Consumers are at the center of everything we do. With 2023 net sales of approximately $27 billion, we are committed to growing our iconic and emerging food and beverage brands on a global scale. We leverage our scale and agility to unleash the full power of Kraft Heinz across a portfolio of six consumer-driven product platforms. As global citizens, we're dedicated to making a sustainable, ethical impact while helping feed the world in healthy, responsible ways. Learn more about our journey by visiting www.kraftheinzcompany.com or following us on LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240325069585/en/

Media Contact:

Chelsea Slaggert

chelsea.slaggert@kraftheinz.com

Investor Contact:

Anne-Marie Megela:

anne-marie.megela@kraftheinz.com

Source: The Kraft Heinz Company

FAQ

What is the purpose of Kraft Heinz receiving up to $170 million in federal funding?

Kraft Heinz will use the funding to implement clean energy projects at 10 of its U.S. plants to reduce emissions and increase energy efficiency.

How will the clean energy projects benefit Kraft Heinz's plants?

The projects aim to reduce annual emissions by more than 99% from 2022 levels and decrease overall energy use by 23% by 2030.

Which technologies will Kraft Heinz utilize with the funding received?

The Company plans to install technologies such as heat pumps, electric heaters, electric boilers, solar thermal, solar photovoltaic, and more.

How many construction jobs are estimated to be created across the 10 plant sites?

Kraft Heinz anticipates creating around 500 construction jobs as part of the clean energy projects.

Which company did Kraft Heinz engage for support in developing the clean energy projects?

Kraft Heinz partnered with ENGIE, a company providing strategic consulting and implementation support for corporations on their net-zero journeys.