Kraft Heinz to split into two companies to spur growth, shares edge higher
Investing.com -- Kraft Heinz announced on Tuesday that it will separate into two listed companies, one dedicated to sauces and the other to grocery products, in an effort to reignite growth after several years of sluggish sales.
The company’s shares edged slightly higher in premarket trading, but remain down roughly 21% over the past year and 9% year-to-date.
The sauces business, to be called Global Taste Elevation, will include brands such as Heinz, Philadelphia, and Kraft Mac & Cheese.
The grocery unit, North American Grocery, will house Oscar Mayer, Kraft Singles, and Lunchables.
In 2024, the sauces division generated roughly $15.4 billion in revenue, compared with about $10.4 billion for the grocery business.
“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,” said Miguel Patricio, executive chair of the company’s board.
The tax-free spinoff is expected to be completed in the second half of 2026.
The move follows Kraft Heinz’s statement in May that it was exploring acquisitions to strengthen shareholder returns. Like many packaged food makers, the company has faced headwinds as shoppers shift toward healthier and more affordable snacks and condiments.
The planned split reverses much of the 2015 Kraft-Heinz merger, a deal orchestrated by Warren Buffett and 3G Capital that has since been widely criticized.
It also reflects a broader wave of corporate breakups in the food and beverage sector. Kellogg separated last year into snack-focused Kellanova and cereal maker WK Kellogg, while Keurig Dr Pepper is in the process of undoing its 2018 tie-up.
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Kraft Heinz has faced persistent challenges as demand for products like Lunchables, Capri Sun, macaroni and cheese, and mayonnaise has softened. The company has been reshaping its portfolio and investing in healthier options to better match shifting consumer tastes.
In July, it reported a second-quarter loss tied to a $9.3 billion impairment charge, driven largely by the drop in its stock price and market value.
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