3G to streamline operations after Kraft, Heinz merger

New York

WHEN Kraft Foods Group merges with HJ Heinz Co, they will share a name, a central place in the American kitchen and two headquarters near Chicago and Pittsburgh.

But that dual office structure may soon change, according to some industry watchers. If history is any guide, their new owners will wrest an expected US$1.5 billion in annual cost savings by 2017 by removing duplicate operations, slashing perks such as the use of private jets, while scrutinising even the most mundane expenses. "There is going to be a lot of headcount reduction," said Bob Goldin, executive vice-president of food consultancy Technomic. "You will see some portfolio pruning. They aren't going to have two headquarters for long." Heinz's backer, Brazilian private equity firm 3G Capital Partners, has made a name for itself by aggressively trimming the fat from food and beer companies struggling for growth.