A 10-year marriage ends in failure
It is wrapping up after a decade as of the largest food corporations in the world. Kraft Heinz is splitting into two. The news surfaced on Tuesday, the culmination of a gargantuan marriage that created one of the largest names in condiments, snacks, and shelf-stable foods.
The split will create two publicly traded companies. One, temporarily to be called Global Taste Elevation Co., will be focused on shelf-stable dinners and will include brands like Heinz, Philadelphia cream cheese, and Kraft Mac & Cheese. The other, temporarily to be called North American Grocery Co., will oversee brands like Oscar Mayer, Kraft Singles, and Lunchables. The full names of the companies will be announced later.
Why the split?
Kraft Heinz revealed the decision is made after a strategic review. Executive Chair Miguel Patricio explained that the current structure is too complex and it is hard to focus on the most attractive opportunities. CEO Carlos Abrams-Rivera added, “This move will unleash the power of our brands and unlock the potential of our business.”
The firm makes it clear that during the separation process, operations will remain as “one Kraft Heinz”. The companies are looking to split so that each can more directly concentrate on its brands, innovate quicker, and more effectively respond to the evolving tastes of consumers.
A quick look back: The 2015 merger
The history of Kraft Heinz began when billionaire investor Warren Buffett joined forces with 3G Capital to buy H.J. Heinz Co. in 2013. The $23 billion deal was the most expensive food industry takeover on record at the time.
Two years after that, Heinz merged with Kraft, which had separated from its snack division (Mondelez International) in 2011. The union formed the world’s fifth-largest food and beverage company, with $28 billion in yearly revenue. Buffett and 3G also paid a $5 billion special dividend to Kraft shareholders as part of the deal.
But the combined company didn’t do well. Shoppers turned away from processed staples like Velveeta and Kool-Aid, and store-brand equivalents were cheaper than name-brand staples like Heinz ketchup. Kraft Heinz in 2019 wrote down brand value by $15.4 billion, and the company failed to grow sales even as it reduced expenses.
The split is designed to maintain iconic brands. Heinz, Philadelphia, and Kraft Mac & Cheese will be retained in Global Taste Elevation Co., and Oscar Mayer, Kraft Singles, and Lunchables belong to North American Grocery Co.
There have also been other shifts that have already occurred over time. Kraft Heinz sold off Planters nuts and its natural cheese division in 2021 to focus on rapidly growing brands like P3 protein snacks and Lunchables. The deals demonstrate the company’s ongoing attempt to adapt to changing tastes and focus on profitable categories.
Looking ahead: Leadership and timing
Carlos Abrams-Rivera will be the CEO of Kraft Heinz and will lead North American Grocery Co. after the spin. Kraft Heinz is seeking a CEO of Global Taste Elevation Co.
No headquarters relocations are planned. The main offices will remain in Chicago and Pittsburgh, and the division is expected to be completed in the second half of 2026. Kraft Heinz shares rose modestly in initial trading following the announcement.
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Why it matters to you
For consumers, the divide won’t affect the quantity of your favourite foods. Instead, it could mean even more focus on innovation and product quality in the future. For investors and the food industry, it is a chance for Kraft Heinz to become more suited to a world where consumers want healthier, fresher, and more innovative food.
With this historical split, the iconic brands you love and trust are not disappearing, but the business they are affiliated with is poised to compete more intelligently, more efficiently, and with a sharper focus on growth.
