Kraft Heinz to Split Into Two Companies, Ending 2015 Mega Merger
In a bold move to streamline operations and unlock growth potential, Kraft Heinz has announced plans to split into two independent, publicly traded companies by the second half of 2026. The decision, approved by the board of directors on September 2, will effectively unravel much of the 2015 merger between Kraft Foods and H.J. Heinz—an ambitious deal that failed to deliver the long-term results investors once envisioned.
Reason for Kraft Heinz Splitting
The company has struggled with growth since its $49 billion merger nearly a decade ago. Shares of Kraft Heinz have dropped about 60% since then, weighed down by debt and an inability to maximize the performance of its diverse portfolio. Executive Chair Miguel Patricio explained that the current structure makes it difficult to prioritize investments, allocate resources effectively, and scale in the most promising categories.
“By separating into two companies, we can devote focused attention to each portfolio,” Patricio said. “This strategy will allow both businesses to thrive, improve performance, and create long-term shareholder value.”
The Shape of the Two New Companies
Although names have not yet been revealed, Kraft Heinz confirmed how the portfolios will be divided.
Global Condiments & Spreads Company: This entity will include powerhouse brands such as Heinz, Philadelphia, and Kraft Mac & Cheese. With around $15.4 billion in net sales reported in 2024, about three-quarters of its revenue comes from sauces, spreads, and seasonings. This segment aims to expand its international footprint and capitalize on growing demand for globally recognized household staples.
North America Food & Snacking Company: Led by Kraft Heinz CEO Carlos Abrams-Rivera, this company will house iconic brands like Oscar Mayer, Kraft Singles, and Lunchables. In 2024, it generated approximately $10.4 billion in net sales. The division will focus primarily on North American markets, leveraging consumer loyalty in categories such as convenient meals and packaged foods.
A History of Restructuring Moves
The planned spinoff follows a series of strategic divestitures over the past few years. In 2020, Kraft Heinz sold part of its cheese business to French dairy giant Lactalis for $3.2 billion to reduce debt. The following year, it sold its Planters nut business to Hormel Foods, maker of Spam, for $3.35 billion. These moves reflect an ongoing effort to simplify operations and refocus on core brands.
The announcement also comes on the heels of broader industry shake-ups. Just days earlier, Keurig Dr Pepper revealed its plan to acquire JDE Peet’s, owner of Peet’s Coffee, before itself splitting into two separate businesses—one dedicated to soft drinks like Dr Pepper and Canada Dry, and the other to coffee.
The Effect on Investors and Consumers
For investors, the spinoff represents an attempt to unlock value that has remained stagnant for nearly a decade. By creating two specialized companies, Kraft Heinz hopes to attract distinct investor bases—those interested in global brand expansion and those focused on stable, North American food staples.
Consumers, on the other hand, are unlikely to notice dramatic changes in the short term. Lunchables, Kraft Singles, and Heinz ketchup will still line grocery store shelves. What could change, however, is the innovation pipeline. By freeing each company from the constraints of a sprawling parent structure, management expects to bring more targeted products and marketing campaigns to market.
Moving Forward
If completed as planned in 2026, the Kraft Heinz breakup will be one of the most significant corporate restructurings in the food industry in recent years. While it marks the end of a merger once hailed as transformative, the move reflects a broader trend among food and beverage giants: leaner, more focused companies are better positioned to compete in an evolving global marketplace.
Whether the split restores investor confidence remains to be seen, but one thing is clear—Kraft Heinz is betting that its iconic brands will shine brighter when given room to grow independently.
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