One of the world’s biggest food companies is about to separate its Lunchables from its Kraft Mac & Cheese.
Kraft Heinz announced on Sept. 2 that its board of directors has approved a plan to split into two independent, publicly traded companies through a spinoff.
The new companies, which have not been named yet, will include one that features signature brands like Heinz, Philadelphia and Kraft Mac & Cheese that had approximately $15.4 billion in net sales in 2024, according to Kraft Heinz. Approximately 75% of sales will come from “sauces, spreads and seasonings,” according to the announcement.
The other new company will feature North American-based brands like Oscar Mayer, Kraft Singles and Lunchables that had approximately $10.4 billion in net sales in 2024. That company will be led by Kraft Heinz CEO Carlos Abrams-Rivera.
Kraft Heinz said it expects the transaction to close in the second half of 2026.
“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas,” Miguel Patricio, executive chair of the board of directors for Kraft Heinz, said in a news release. “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.”
The split into two companies will unravel much of the 2015 merger between Kraft Foods and H.J. Heinz that created the current company. Shares of Kraft Heinz are down about 60% since the 2015 merger, according to CNBC.
Kraft Heinz sold off part of its cheese business to Lactalis in 2020 in a $3.2 billion deal to pay down debt and then sold its Planters brand to Spam maker Hormel in 2021 for $3.35 billion as part of its ongoing turnaround effort.
The Kraft Heinz split comes after Keurig Dr Pepper announced on Aug. 25 that it will buy JDE Peet’s, the owner of Peet’s Coffee, and then split into two separate companies after the acquisition is completed.
One company will be centered around popular soft drink brands like Dr Pepper and Canada Dry, while the other will focus on coffee.
