Kraft Heinz to break up after a decade, will now operate as two separate companies

The food giant plans a major corporate breakup to focus on faster-growing products and streamline operations.

Kraft Heinz, the global food giant formed by the 2015 merger of Kraft and Heinz, announced plans to split into two separate companies, a decade after the blockbuster $46 billion deal. The move aims to give each business more focus and resources, according to company executives, New York Times reported.

Kraft Heinz to split after a decade. (Reuters)

Grocery staples to become an independent entity

Kraft Heinz plans to spin off its slower-growing grocery business, which includes well-known products like Oscar Mayer, Kraft Singles, and Lunchables. The grocery unit generated approximately $10 billion in sales last year. CEO Carlos Abrams-Rivera will lead this new company, which is expected to continue catering primarily to North American consumers. The split is designed to allow dedicated attention to brands and unlock their growth potential.

Sauces and condiments to lead global expansion

As reported by CNBC, the second company will focus on faster-growing products such as Heinz ketchup, Philadelphia cream cheese, and Kraft Mac & Cheese. This business generated around $15.4 billion in net sales in 2024, with roughly 75% of revenue coming from sauces, spreads, and seasonings. Kraft Heinz’s board is working with an executive search firm to find a CEO for this global company, which will have a broad international reach, including emerging markets. The deal is expected to close second half of 2026.

Industry challenges and strategic shift

The New York Times notes that many big food companies are under pressure as consumers move away from highly processed foods and towards fresher, cheaper options after years of inflation. Kraft Heinz has sold off parts of its cheese and nuts business in recent years and invested in stronger-performing brands. Global net sales were down 2% in Q2 vs last year, with declines in categories like cold cuts, coffee, frozen snacks, and powdered beverages.

Unwinding a megamerger

As per the Wall Street Journal, this is a reversal of the 2015 merger plan. It’s a broader industry trend as well, as companies like Kellogg and Keurig Dr Pepper have recently spun off slower-growing businesses to focus on higher growth ones.

This will give Kraft Heinz’s brands more attention and long-term shareholder value as each company can focus on its strengths.

FAQs:

Q1: Why is Kraft Heinz splitting into two companies?

A: Kraft Heinz is splitting to give each business more focus and resources. The grocery brands like Oscar Mayer and Lunchables will operate separately from faster-growing products like Heinz ketchup and Kraft Mac & Cheese, helping both sides perform better.

Q2: When will the split happen?

A: The company expects the deal to close in the second half of 2026, subject to regulatory approvals.

Q3: Who will lead the new companies?

A: CEO Carlos Abrams-Rivera will lead the new grocery-focused company. The board is searching for a CEO to lead the faster-growing sauces and condiments business.