Kraft Heinz Announces Split Two Years After Major Merger

NEW YORK – Kraft Heinz has decided to split, just two years after merging to form one of the largest food companies globally.

One entity will operate as Global Taste Elevation Co., encompassing well-known brands like Heinz, Philadelphia Cream Cheese, and Kraft Mac & Cheese. The other, identified as a North American grocery store, will include brands such as Oscar Mayer, Kraft Singles, and Lantable. Official names for both companies are set to be announced later.

In May, Kraft Heinz indicated a potential split following a strategic review of its operations.

The merger aimed to leverage large-scale operations initiated in 2015, but evolving consumer preferences towards healthier options complicated that vision. Both Kraft Heinz and other food manufacturers have had to adapt their products to fit this trend.

“While Kraft Heinz has iconic and beloved brands, the current structure adds complexity that makes capital allocation and initiative prioritization challenging,” the company noted.

The road to the merger began in 2013 when billionaire investor Warren Buffett collaborated with Brazilian firm 3G Capital to acquire HJ Heinz in a landmark $23 billion deal, the highest in the food sector.

3G Capital also played a key role in forming Restaurant Brands International, merging Burger King, Tim Hortons, and Popeyes, known for its strict cost management practices, including zero-based budgeting.

The merger aimed to help Heinz, established in 1869 in Pittsburgh, boost sales of seasonings and sauces in grocery stores, although this led to layoffs shortly after in efforts to cut costs.

At the same time, Chicago’s Kraft had been looking for partners post their separation from the snacks division in 2011.

In 2015, Buffett and 3G merged Heinz and Kraft, creating the fifth largest food and beverage company worldwide, with annual revenues of $28 billion. Both parties contributed $5 billion for special dividends to Kraft shareholders.

Despite significant layoffs and cost-cutting measures, the company faced challenges, especially as consumers began moving away from the highly processed foods that Kraft produced, such as Belveeta cheese and Kool-Aid.

Kraft Heinz found it hard to differentiate from cheaper store brands. For instance, a 14-ounce Heinz Ketchup bottle retails for $2.98, while Walmart’s Great Value brand offers a similar size for just 98 cents.

In 2019, Kraft Heinz reduced the value of Oscar Meyer and Kraft by $15.4 billion, pointing to operational costs and supply chain challenges. Investors have expressed dissatisfaction with the company’s management, claiming that excessive cost-cutting is stifling innovation.

In 2021, Kraft Heinz sold its Planters Nut Business and Natural Cheese Business and promised to reinvest in high-growth brands, like P3 protein snacks.

However, the company’s net revenue has been declining annually since 2020. In April, Kraft Heinz revised its yearly revenue predictions downward, citing reduced consumer spending in the U.S. and tariffs imposed during Donald Trump’s presidency.

Carlos Abrams-Rivera remains chief executive of Kraft Heinz and will take on the role of CEO for North American Grocery Co. following the split. Kraft Heinz has stated that the board is working with executive search firms to find potential candidates for the CEO position at Global Taste Elevation Co.

Currently, there are no plans to relocate the headquarters based in Chicago and Pittsburgh. The division is expected to finalize in the latter half of 2026.

Slightly before the market opened, Kraft Heinz shares saw a minor increase.