Kraft Heinz, the multinational food conglomerate formed in 2015 through the merger of Kraft Foods and H.J. Heinz, announced that it will separate into two independent publicly traded companies. The move ends one of the most high-profile consumer goods mergers of the past decade, which was originally backed by 3G Capital and Warren Buffett’s Berkshire Hathaway.
The first company, tentatively named Global Taste Elevation Co., will control iconic international brands such as Heinz ketchup, Philadelphia cream cheese, and Kraft Mac & Cheese. It will concentrate on condiments, sauces, and meals that have broad global distribution. The second entity, provisionally called North American Grocery Co., will manage well-known household names including Oscar Mayer, Maxwell House, Kraft Singles, and Lunchables, focusing primarily on the United States and Canada.
Executives stated that dividing the company will allow each business to allocate capital more effectively and pursue tailored strategies. Carlos Abrams-Rivera, the current chief executive officer of Kraft Heinz, is expected to lead the North American division, while a search continues for a CEO to run the global arm.
Shifting Consumer Trends And Sales Pressures
The breakup follows years of sluggish performance. Despite its powerful brand portfolio, Kraft Heinz has struggled with changes in consumer behavior, particularly a growing preference for fresh, organic, and less processed foods. Traditional packaged goods such as boxed dinners and processed meats have faced declining demand.
In 2024, Kraft Heinz reported that net sales fell by 3 percent, reflecting weakening appetite for its legacy products. Executives acknowledged that the combined structure made it difficult to respond quickly to market trends. Miguel Patricio, executive chair of Kraft Heinz, said the complexity of the merged business had hindered innovation and growth.
The company also lags behind rivals that have diversified more successfully. Competitors including Nestlé and PepsiCo have capitalized on categories like plant-based protein and ready-to-drink beverages, while Kraft Heinz has relied heavily on brands that peaked in popularity decades ago. Analysts suggest that separating into two focused companies could give investors clearer visibility into performance and unlock growth potential in faster-moving categories.
Industry Context And Strategic Comparisons
The decision mirrors broader restructuring trends in the packaged food sector. In recent years, companies like Kellogg, which split into Kellanova and WK Kellogg Co., and Keurig Dr Pepper, which reorganized parts of its portfolio, have sought similar breakups to streamline operations. Investors increasingly view leaner, more targeted companies as better positioned to adapt to rapidly changing consumer demands.
Food inflation, supply chain disruptions, and higher interest rates have also pressured large multinationals to simplify their structures. For Kraft Heinz, maintaining two distinct businesses could help each respond to regional challenges. The global company will prioritize international growth, where Heinz and Philadelphia already enjoy strong brand recognition. Meanwhile, the North American unit will concentrate on defending its market share against both private-label competition and premium newcomers in categories like coffee and ready-to-eat meals.
Some analysts, however, caution that the split is not guaranteed to resolve long-term challenges. Demand erosion in processed food categories remains a structural issue, and both new companies will need significant innovation to maintain relevance.
Leadership, Financial Impact, And Timeline
The split is scheduled to be completed in the second half of 2026, pending regulatory approvals. Once finalized, shareholders of Kraft Heinz will receive stakes in both new companies. Carlos Abrams-Rivera will lead North American Grocery Co., while a leadership appointment for Global Taste Elevation Co. is expected in the coming months.
Financially, the breakup will incur substantial costs. Executives estimate approximately $300 million in one-time expenses related to separation, including legal, advisory, and restructuring fees. Despite these costs, the board of directors argues that the move will create long-term value.
The announcement also reignited focus on Kraft Heinz’s stock performance. Since the 2015 merger, shares have declined by nearly 70 percent, erasing billions in market capitalization. Once regarded as a stable dividend payer with global growth prospects, the company has instead delivered years of underperformance.
Key shareholder Warren Buffett, whose Berkshire Hathaway retains roughly a 27 percent stake, expressed disappointment with how the merger unfolded. In previous public remarks, Buffett acknowledged that the 2015 deal was too expensive and did not generate the growth that had been expected. He described Kraft Heinz as an investment “that did not work out as planned.”
Looking ahead, investors will closely monitor whether the separation enables stronger financial results. For Kraft Heinz, the dismantling of its high-profile merger marks both the end of a corporate experiment and the beginning of a new strategic phase for some of the world’s most recognizable food brands.