Kraft Heinz to Split, Unwinding Decade-Old Mega-Merger
The food giant will separate its faster-growing global sauces unit from its North American grocery staples to create two focused public companies.
The Kraft Heinz Company announced it will split into two independent public companies, a strategic reversal that dismantles the food giant formed a decade ago. The move aims to separate its higher-growth global condiments and sauces business from its portfolio of North American grocery staples.
The separation, expected to be completed in the second half of 2026, will create two distinct entities. The first, 'Global Taste Elevation Co.', will house iconic brands like Heinz ketchup and Philadelphia cream cheese, representing about $15.4 billion in annual revenue. The second, 'North American Grocery Co.', will focus on processed staples such as Oscar Mayer meats and Lunchables, with roughly $10.4 billion in annual sales.
This decision marks a significant unwinding of the , a deal that failed to deliver on its promise of sustained growth. Since the merger, the company's shares have lost approximately 60% of their value amid shifting consumer tastes and operational struggles. Executive Chair Miguel Patricio stated that the complexity of the current structure makes it "challenging to allocate capital effectively."
Investors reacted with caution, as following the announcement. The move also drew a critical response from its most famous investor, Warren Buffett, whose Berkshire Hathaway is the largest shareholder. Buffett expressed his disappointment, telling reporters that while the original merger "didn’t turn out to be a brilliant idea," he believes "taking the company apart will not fix its problems."
The breakup reflects a broader industry trend of in favor of more focused and agile business structures. By creating two specialized companies, Kraft Heinz leadership hopes each can pursue more tailored strategies—allowing the global sauces unit to focus on innovation and international expansion, while the grocery business concentrates on cash flow and margin expansion in the mature North American market.