Kraft Heinz is set to divide into two separate entities following a decade since the merger that established one of the largest food conglomerates globally. The restructuring will result in the formation of two distinct companies, tentatively named Global Taste Elevation Co. and North American Grocery Co., each focusing on specific product categories and brands such as Heinz, Philadelphia cream cheese, and Kraft Mac & Cheese for the former, and Oscar Mayer, Kraft Singles, and Lunchables for the latter.
The decision to split comes after Kraft Heinz initiated a strategic review earlier in the year to assess its operational structure. The separation is expected to be finalized in the latter half of 2026. The move aims to address the evolving consumer preferences towards healthier food options and the need for more focused strategies to drive growth.
The origins of the merger trace back to 2013 when Warren Buffett and Brazilian investment firm 3G Capital collaborated to acquire H.J. Heinz Co. in a landmark $23 billion deal, marking a significant consolidation in the food industry. The subsequent merger of Heinz with Kraft in 2015 resulted in the creation of a major player in the food and beverage sector, with a combined annual revenue of $28 billion. However, challenges ensued as consumer trends shifted away from heavily processed foods, impacting the company’s performance.
Despite efforts to streamline operations and reduce costs, Kraft Heinz faced setbacks, including a decline in net revenue post-2020. The company has since divested certain businesses and realigned its focus towards higher-growth brands like P3 protein snacks and Lunchables. The separation into two entities is expected to provide a more tailored approach to product development and market positioning.
The current CEO, Carlos Abrams-Rivera, will lead the North American Grocery Co. post-split, while the search for a CEO for Global Taste Elevation Co. is ongoing. The headquarters in Chicago and Pittsburgh will remain unchanged, with a commitment to continue manufacturing key products in Canada. The move to separate into two entities is part of a broader trend in the food industry, with other major players also opting for strategic realignments to enhance competitiveness and drive innovation. Kraft Heinz shares experienced a three percent decline following the announcement of the split.
