Kraft Heinz has announced it will simplify its structure and separate its vast lineup of consumer packaged goods, from iconic ketchup condiments to boxed macaroni and cheese, into two new food companies.
The company's board of directors "unanimously" approved the separation into two independent, publicly traded companies, Kraft Heinz sad in a press release Tuesday.
The brands first came together in 2015 in a megamerger engineered by multi-billionaire investor Warren Buffett's Berkshire Hathaway and Brazilian investment firm 3G Capital, creating the fifth largest food and beverage company in the world.
The company said this week it hopes the decision will help maximize Kraft Heinz's capabilities and allow both new companies -- whose new names will be announced at a later date -- to "more effectively deploy resources toward their distinct strategic priorities."
The two resulting companies will be temporarily referred to as "Global Taste Elevation Co." and "North American Grocery Co."
Global Taste Elevation Co. will include shelf-stable meals and "taste elevators," which brought in approximately $15.4 billion in 2024 net sales, per Kraft Heinz. The roster of brands beneath this new company includes Heinz, Philadelphia and Kraft Mac & Cheese. Kraft Heinz said 75% of net sales for this half of the split come from "sauces, spreads and seasonings."
North American Grocery Co., which netted approximately $10.4 billion in 2024, will include three billion-dollar brands: Oscar Mayer, Kraft Singles and Lunchables. The company will be led by Carlos Abrams-Rivera, Kraft Heinz said.
Miguel Patricio, executive chair of Kraft Heinz's board of directors, said in a statement that the "complexity" of the company's current structure "makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas."
The move to separate, he said, will allow the new companies to allocate "the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value."
Kraft Heinz said the strategy will provide both companies an avenue for stronger performance "while preserving the scale to compete and win in today’s environment."
The Kraft Heinz split comes at a time when consumers are more conscious about their grocery store purchases, whether that involves the ingredients in their foods or watching their budgets amid rising grocery prices and buying fewer pre-made items.
In a statement included in Tuesday's press release, Kraft Heinz CEO Carlos Abrams-Rivera said, "This move will unleash the power of our brands and unlock the potential of our business. This next step in our transformation is only possible because of the commitment of our 36,000 talented employees who deliver quality and value for consumers every day. We will continue to operate as ‘one Kraft Heinz’ throughout the separation process."
