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Kraft Heinz Spins Into Separate Sauces and Grocery Business Units

  • The sauces unit did US$15.4B in 2024 sales; the grocery unit generated US$10.4B.

Kraft Heinz (NASDAQ: KHC) will split into two publicly listed companies in a tax-free deal targeted for the second half of 2026, separating sauces from grocery to restart growth after years of soft sales and recent guidance cuts.

The new “Global Taste Elevation Co.” will house brands including Heinz, Philadelphia and Kraft Mac & Cheese, while “North American Grocery Co.” will include Oscar Mayer, Kraft Singles and Lunchables. Official names for both companies will be announced later.

Kraft Heinz said the sauces-focused unit delivered about US$15.4 billion in 2024 sales, while the grocery unit produced about US$10.4 billion. The company has no plans to change its headquarters in Chicago and Pittsburgh.

“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas,” Executive Chair Miguel Patricio said.

CEO Carlos Abrams-Rivera will become CEO of North American Grocery Co. after the separation while the board has engaged an executive search firm to identify a CEO for Global Taste Elevation Co.

The move follows a strategic review announced in May and years of portfolio reshaping: a US$15.4 billion write-down of Oscar Mayer/Kraft in 2019, the 2021 sales of Planters and the natural cheese business, and reinvestment into higher-growth labels like Lunchables and P3. Net revenue has declined each year since its 2020 pandemic bump, and in April the company lowered full-year sales and earnings guidance, citing weaker US spending and the impact of Trump-era tariffs.

The split unwinds parts of a scale strategy born of the 2015 Kraft-Heinz merger—then the world’s fifth-largest food and beverage company at around US$28 billion in annual revenue—following the 2013 US$23 billion Heinz buyout led by Warren Buffett and 3G Capital, whose cost-discipline playbook included zero-based budgeting and layoffs.

Brand pressure from shifting tastes and private-label pricing also weighed on performance; for example, a 14-ounce Heinz ketchup at Walmart lists at US$2.98 versus US$0.98 for Great Value.


Information for this story was found via The Globe And Mail, City News, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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