In a surprising wind-down to a decade-old consumer brand merger, the Kraft Heinz Corporation has decided to split into two companies, one focusing on groceries, the other on sauces and spreads.
The breakup dismantles a packaged goods giant that seemed unthinkable 10 years ago, when the mega-merger created one of the biggest food manufacturers on the planet.
The separation, which will conclude in the second half of fiscal year 2026, is the latest in a series of big-business rearrangements of major consumer brands that are drifting away from the conglomerate model.
As a packaged goods giant, Kraft Heinz never achieved the growth that was expected a decade ago, when Warren Buffett’s Berkshire Hathaway, along with private equity firm 3G Capital, created the $45 billion colossus, with a focus on cutting costs and building iconic brands such as Heinz beans, Jell-O and Philadelphia cream cheese.
The same firm is now worth just $33 billion.
Buffett expressed disappointment in the split publicly on CNBC, while Berkshire Hathaway took a $3.76 billion write-down on its 27.4% stake in the company and relinquished its board seats.
In retrospect, the merger has not turned out to be the brilliant idea that was anticipated.
Shares have lost 60% since the merger, as consumers have reined in spending, particularly in the wake of the COVID-19 pandemic, and as consumer preferences have shifted.
The coming separation will split the corporate giant into two companies, one focused on sauces and spreads, such as Heinz, Philadelphia and Kraft Mac & Cheese, which had sales of about $15.4 billion in 2024, and the other focused on ready-meal brands, including Oscar Mayer, Maxwell House and Lunchables, which had about $10.4 billion in sales last year.
The grocery unit will be headed by current Kraft Heinz top boss Carlos Abrams-Rivera, while the sauces unit will be searching for a new CEO.
The company expects the split to cost as much as $300 million, but it expects to reduce much of that expense quickly.
The two entities will be provisionally named Global Taste Elevation Co., for the sauces and condiments company, and North American Grocery, centered on its grocery portfolio.
Global Taste Elevation will retain Kraft Heinz’s iconic global brands and focus on high-growth platforms such as condiments, sauces and flavor enhancers.
The newly formed North American Grocery will be focused on the grocery business, built around long-standing household staples such as Kraft Mac & Cheese, Oscar Mayer and Lunchables.
The permanent names will likely be revealed later in the year.
The company has been reshaping its portfolio to realign itself with consumer preferences for healthier, less processed foods.
The separation will allow each business to operate with strategies tailored to its distinct market dynamics—the grocery unit focusing on cost efficiency and consolidating the value segment, while the growth condiment division can prioritize global expansion and targeted capital investment.
One major move recently is the trend toward eliminating the use of artificial dyes from U.S. products and divesting underperforming brands.
The Kraft Heinz restructuring mirrors a similar 2023 split of Kellogg’s into Kellanova and WK Kellogg, which helped both companies grow independently.
Long known for its iconic brands, Kraft Heinz operates under three strategic geographic segments: North America, International Developed Markets and Emerging Markets.
The company’s brand portfolio includes globally recognized names such as Kraft, Heinz, Oscar Mayer, Philadelphia, Velveeta and Lunchables.
In Q2 2025, total revenue fell by 1.9% year-over-year to $6.3 billion, primarily due to volume declines in North America and International Developed Markets, principally in cold cuts, Lunchables, frozen snacks and powdered beverages.
This followed a 3% year-over-year drop in total revenue, to $25.8 billion, in fiscal year 2024, once again due to weak demand for key products such as Lunchables and Kraft Macaroni & Cheese.
Initial investor reaction to the separation has been positive, as Morgan Stanley upgraded the company’s stock upon announcement of the move.
The Kraft Heinz portfolio contained 56 categories, making it more than a little unwieldy from a management standpoint.
Though the split may simplify operations, it is not without its hazards.
Perhaps the most obvious hazard would be in supply chains, which are already stressed due to looming tariffs, geopolitical tensions and climate
