Kraft Heinz Faces Declining Market Share in Mac & Cheese
Kraft Heinz has long been the go-to brand for macaroni and cheese in the U.S. However, that dominance seems to be slipping away.
The Chicago-based company is experiencing a decline in its market position as newer competitor Goodles has gained traction among consumers with its premium Cheddy Mac offerings.
Data from Circana shows that Kraft’s mac & cheese market share plummeted from 45% in 2022 to around 39%. This decline, as reported by the Wall Street Journal, highlights the pressure on the brand.
Kraft Mac & Cheese has struggled in a challenging space: it’s not quite premium enough to draw in upscale buyers, yet it’s too pricey to compete effectively with store-brand alternatives.
Goodles, established in November 2021, carved a niche by marketing comfort food that doesn’t skimp on nutrition. Co-founded by CEO Jen Zeszut, the brand has positioned itself as a modern, high-protein, high-fiber alternative, featuring a vibrant identity aimed at standing out from the classic blue box.
Initially, Goodles focused on direct-to-consumer sales to build demand before branching out to larger retailers like Target. The company has since expanded its product range to 12 SKUs and delved into pasta.
Goodles reported remarkable growth: 33 times in 2022, with sales tripling in 2023 and doubling again in 2024. They secured $13 million in a Series A funding round in September 2023, which was led by L Catterton.
Inside Kraft Heinz, employees recognized that they needed to rethink their market-leading Blue Box offering.
After Goodles debuted, Kraft Heinz employees tried the product and noted certain shortcomings, which hinted at future challenges. Despite this, executives hesitated to make changes, primarily because Kraft Mac & Cheese still generated around $1 billion in annual sales. For years, internal conversations swirled about possible improvements, like enhancing protein content, introducing new flavors, or altering the cheese profile.
This indecision worsened after the tumultuous 2015 merger of Kraft and Heinz. As competitors gained ground and Kraft Mac & Cheese slowly surrendered market share, the company was bogged down by aggressive cost-cutting, underinvestment in products, and frequent management turnovers, which slowed decision-making.
Kraft Heinz must now tackle competition on two fronts: premium brands like Goodles and Annie’s, the latter of which was acquired by General Mills for $820 million in 2014, and private label store brands, which are steadily gaining appeal as consumers look for more affordable options due to rising prices.
According to industry data, macaroni and cheese products sold by Walmart and Aldi now comprise 14% of the market, up by 3 percentage points since 2021.
Other retailers are also adapting. Trader Joe’s offers various exclusive store-brand mac and cheese options, while Target is introducing a Good & Gather version focused on cleaner ingredients and updated packaging. This shift aligns with a broader trend that has seen store-brand food sales soar to $271 billion in 2024.
Faced with these pressures, Kraft Heinz announced a significant restructuring in September. The company will split into two publicly traded entities, effectively undoing the 2015 merger. This separation, anticipated to be finalized in the second half of 2026, will differentiate the part of the company that focuses on global sauces and foods, including Kraft mac & cheese, from its slower-growing North American grocery sector.
Efforts for further comment from Kraft Heinz are pending.
