Kraft Heinz to split into two companies a decade after merger

On 2 September 2025, Kraft Heinz, the Chicago-based packaged food group, announced that it will separate into two independent, publicly traded companies through a tax-free spin-off, a decade after the 2015 merger that created a $45bn multinational. The breakup is intended to reduce complexity and improve financial performance after years of falling sales.

Two companies, two portfolios

The first business, provisionally named Global Taste Elevation Co, will focus on sauces, spreads and seasonings. It will bring together brands such as Heinz tomato ketchup, Philadelphia cheese and Kraft Mac & Cheese, and is expected to generate annual sales of more than $15bn (£11bn) based on 2024 figures. The group is currently seeking a chief executive to lead this company.

The second business, provisionally named North American Grocery Co, will concentrate on grocery staples including Oscar Mayer meats, Lunchables boxed meals and Kraft Singles processed cheese, with annual sales of more than $10bn. It will be led by Kraft Heinz's current chief executive, Carlos Abrams-Rivera.

• Global Taste Elevation Co — Heinz, Philadelphia, Kraft Mac & Cheese; more than $15bn in annual sales.
• North American Grocery Co — Oscar Mayer, Lunchables, Kraft Singles; more than $10bn in annual sales.
• Completion of the separation is expected in the second half of 2026.

Kraft Heinz said the complexity of its current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in its most promising areas, which is why the two companies will operate independently once the separation is complete.

Market reaction and context

The shares rose by 2.7% in pre-market trading after the announcement, though the stock has lost more than a fifth of its value over the past 12 months and has slumped by about 75% since the July 2015 merger. The group has been hit by a consumer shift towards healthier and more affordable snacks and condiments, as well as by high food ingredient costs.

The move follows similar demergers by other large US companies this decade, including Kellogg Company in 2023, as well as Warner Bros Discovery, Honeywell and General Electric. Russ Mould, investment director at the stockbroker AJ Bell, said the Kellogg demerger had unlocked some value and that Kraft Heinz may be looking to do something similar after the long slide in its share price.

A decade after the Buffett-backed merger

The 2015 merger was engineered by the veteran US investor Warren Buffett and the Brazilian private equity firm 3G Capital, two years after the pair had taken Heinz private. Three years before the merger, Kraft had spun off its snack division, which was renamed Mondelez International. Heinz was founded in Pittsburgh in 1869 by Henry J Heinz, while Kraft grew out of a Chicago wholesale cheese business set up by James L Kraft in 1903. Buffett later admitted he had been wrong in a couple of ways on Kraft Heinz and had overpaid for Kraft.

Executive chair Miguel Patricio said: "Kraft Heinz's brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in our most promising areas." The announcement was reported by The Guardian (theguardian.com).

Company details

Kraft Heinz is a packaged food company headquartered in Chicago, Illinois. Its official website is kraftheinzcompany.com.