Kraft Heinz is poised to undergo a significant restructuring, announcing plans to split into two distinct companies focused on separate product lines—one emphasizing groceries and the other dedicated to sauces and spreads. This decision, revealed on Tuesday, comes a decade after the company was formed through a merger aimed at expanding its market presence and driving growth.
The anticipated spinoff is set to close in the latter half of 2026 and represents a broader trend among major global consumer brands. Many of these companies, which have traditionally relied on conglomerate structures, are now reassessing their business models in response to challenges such as stagnant sales and changing consumer preferences. The complex landscape has prompted firms to streamline their operations to better position themselves in a competitive marketplace.
The division of Kraft Heinz will lead to the creation of two entities, tentatively named Global Taste Elevation Co. and North American Grocery Co. The former is expected to include established brands like Heinz, Philadelphia cream cheese, and Kraft Mac & Cheese, while the latter will encompass legacy names such as Maxwell House, Oscar Mayer, Kraft Singles, and Lunchables. Official brand names for these new companies have yet to be disclosed.
Market analysts have been closely monitoring Kraft Heinz’s performance, particularly since the company indicated in May that it was exploring strategies to enhance shareholder value. However, recent trading data indicated a decline of over 5 percent in the company’s stock, highlighting investor concerns.
The 2015 merger, orchestrated with the support of Warren Buffett’s Berkshire Hathaway and Brazilian private equity firm 3G Capital, initially created a market capitalization of billion. Its goal was to cut costs and stimulate growth for iconic products such as Heinz Beanz and Jell-O. Unfortunately, the anticipated growth did not materialize, as stock values plummeted by approximately 60 percent, largely attributed to changing consumer spending habits exacerbated by the COVID-19 pandemic.
Recent strategic moves by Kraft Heinz, including the sale of its Planters nut business and its natural cheese division, aimed to redirect resources towards higher-growth products. Nevertheless, the company experienced a 3 percent decline in net sales in 2024, further compounding its challenges.
As the company prepares for this significant transition, Suzy Davidkhanian, an analyst at eMarketer, notes that while the split could unlock some short-term value for investors, execution risks remain prominent. Both entities will need to invest in innovation and counter the rising presence of private-label products to ensure sustained growth.
Carlos Abrams-Rivera, currently the CEO of Kraft Heinz, will lead the grocery division, while the hunt for a new CEO for the sauces segment is ongoing. The restructuring could incur costs as high as 0 million, but the company anticipates mitigating these expenses swiftly.
In another notable industry development, last week, the U.S.-based beverage giant Keurig Dr Pepper announced an billion acquisition of JDE Peet’s, resulting in a similar operational split aimed at enhancing value and efficiency.
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