Kraft Heinz Co. (Nasdaq: KHC) is exploring the breakup of its business operations, considering spinning off grocery brands into a separate company worth as much as $20 billion, the Wall Street Journal said Friday, citing people familiar with the matter.
The plan would separate many traditional Kraft-branded products into a new public company. This would allow Kraft Heinz to focus on faster-growing segments like sauces and condiments, including its flagship Heinz ketchup, as the food giant seeks to reverse years of declining sales.
Shares rose 2.5% Friday, giving the company a market value of about $31 billion. However, the stock has lost nearly two-thirds of its value since the 2015 merger that created Kraft Heinz.
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“As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value,” a company spokesperson said. The structure could change, and there’s no guarantee the company will proceed with any deal, the people said.
The potential breakup follows struggles with shifting consumer preferences toward fresher, less processed foods and mounting cost pressures. Net sales dropped 6.4% in the first quarter of 2025, while full-year 2024 sales declined 3%.
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The move would echo Kellogg Co.‘s 2023 decision to spin off its declining cereal business, which was later acquired by Italy’s Ferrero for $3.1 billion.
Kraft Heinz emerged from a 2015 merger orchestrated by Warren Buffett’s Berkshire Hathaway and Brazilian private equity firm 3G Capital, which joined Kraft Foods with H.J. Heinz. The merger aimed to cut costs and boost profits, but has proven disappointing for Berkshire, which recently gave up its board seats.
CEO Carlos Abrams-Rivera has acknowledged being “acutely aware of the building pressures across food,” including inflation and consumer anxiety affecting demand for the company’s packaged products.
The company recently announced it would eliminate artificial food coloring from US products by 2027, responding to health officials’ concerns about synthetic dyes.
Any split could be announced soon, though details remain under discussion, the sources said. Kraft Heinz is scheduled to report second-quarter results on July 30.
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