The US packaged food giant has announced it will divide into two publicly traded companies to sharpen brand focus and drive long-term growth.
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Kraft Heinz announce plans to split into two independent businesses, a decade after the 2015 merger of Kraft and Heinz created the $45bn packaged food giant.
The Chicago-based company said in a statement on Tuesday that its board had unanimously approved the separation, reversing the merger engineered by investor Warren Buffett and Brazilian private equity firm 3G Capital.
The move will create two publicly traded companies, each with a distinct focus and leadership team. However, Kraft Heinz has not yet decided on their names.
“Unleash the power of the brands”
One of the new companies, provisionally named Global Taste Elevation Co, will focus on sauces, spreads and seasonings, including Heinz, Philadelphia and Kraft Mac & Cheese. Based on 2024 figures, it is expected to generate annual sales of more than $15bn (£11bn). Kraft Heinz is actively seeking a chief executive to lead this unit.
The second company, North American Grocery Co, will concentrate on grocery staples such as Oscar Mayer meats, Lunchables boxed meals and Kraft Singles processed cheese, generating over $10bn in annual sales. This business will be led by current Kraft Heinz CEO Carlos Abrams-Rivera.
Miguel Patricio, Executive Chair of the Board, said:
Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in our most promising areas.
By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value. I look forward to working closely with Carlos and the Kraft Heinz team in the months ahead to prepare the organisation for the separation.”
Abrams-Rivera added:
This move will unleash the power of our brands and unlock the potential of our business. This next step in our transformation is only possible because of the commitment of our 36,000 talented employees who deliver quality and value for consumers every day. We will continue to operate as ‘one Kraft Heinz’ throughout the separation process.”
Response to ongoing pressures
The break-up comes as sales have been falling at the packaged food giant, with price rises driving away some customers and consumer taste shifting away from processed foods. Kraft Heinz is also responding to pressure from US regulators, including Health and Human Services Secretary Robert F. Kennedy Jr., to remove artificial flavours and other additives. In June, the company pledged to eliminate all artificial colours from its brands.
Kraft Heinz plans to complete the split in the second half of 2026, in a major strategic move to simplify operations, sharpen brand focus and unlock growth for its iconic products.
