Kraft Heinz announced plans to divide into two independent businesses, reshaping one of the biggest food makers in the world. The Kraft Heinz split comes a decade after the massive merger that formed the current company.
One company, temporarily called Global Taste Elevation Co., will focus on sauces and shelf-stable meals. Its brands will include Heinz, Philadelphia Cream Cheese, and Kraft Mac & Cheese. The other company, North American Grocery Co., will manage Oscar Mayer, Kraft Singles, and Lunchables. Official names will follow later.
Executives emphasized that the Kraft Heinz split will allow both firms to focus more clearly on growth. Chair Miguel Patricio explained that the combined structure made it harder to invest effectively and prioritize key opportunities. By separating, each company can streamline operations and direct capital toward faster-growing categories.
The merger history began in 2013 when Warren Buffett and 3G Capital acquired Heinz for $23 billion. In 2015, they merged Heinz with Kraft, creating the fifth-largest food and beverage company worldwide. Initial revenues topped $28 billion, but the business soon struggled with changing consumer habits.
Shoppers increasingly preferred fresh and healthier options. As a result, many Kraft Heinz staples, such as Velveeta and Kool-Aid, lost traction. The company also faced challenges from cheaper private-label products. For instance, a Heinz ketchup bottle sells for nearly triple the price of Walmart’s own brand.
To adapt, Kraft Heinz sold its Planters nut business and its natural cheese line, reinvesting into higher-growth products like Lunchables and P3 protein snacks. Yet net revenue has fallen steadily since 2020, aside from a temporary pandemic boost. Investors have long criticized management’s focus on cost-cutting instead of brand innovation.
In 2019, Kraft Heinz reduced the value of its Oscar Mayer and Kraft trademarks by $15.4 billion, citing supply chain costs. More recently, tariffs and weak U.S. spending forced another downgrade to sales guidance. Analysts said the split now represents a reset and a chance to improve strategy.
Carlos Abrams-Rivera will stay on as CEO until the transaction closes. He will then lead North American Grocery Co. Meanwhile, the board will appoint a new chief executive for Global Taste Elevation Co. Headquarters in Chicago and Pittsburgh will remain unchanged.
Investors welcomed the news, with shares rising slightly before markets opened. Analysts said the Kraft Heinz split could unlock shareholder value by giving each company a sharper focus. Both new firms plan to pursue tailored growth strategies designed to rebuild momentum and brand strength.
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