Kraft Heinz to Restructure as Two Separate Companies After a Decade of Decline

Kraft Heinz, the Nasdaq-listed food giant behind household names such as Philadelphia cheese and Heinz tomato ketchup, has unveiled plans to split into two publicly traded businesses. This strategic overhaul comes a decade after the $45 billion merger engineered by Warren Buffett and 3G Capital and aims to revive performance amid persistent sales challenges and shifting consumer preferences.

The separation is scheduled for completion in the second half of 2026 and will dismantle the structure established through the Kraft and Heinz tie-up in 2015. The decision is a response to disappointing recent sales, as well as the need for greater clarity and simplicity in allocating capital and driving growth in priority sectors. Kraft Heinz shares have dropped by a fifth in New York during the last five years, pressured by rising costs and evolving appetites, with more consumers turning away from established brands and processed foods.

Recent years have seen several major US food conglomerates embark on similar break-ups, including Kellogg and Keurig Dr Pepper, who have responded to inflationary concerns and changing consumer demands by reshaping their business portfolios. The anticipation of the Kraft Heinz split had grown since May, when the group announced a strategic review to lift its sagging share price. By the close of recent trading, Kraft Heinz’s shares had declined 7 percent to 26 dollars, putting the company’s current valuation at approximately 31 billion dollars.

One of the future companies will be built around sauces, spreads and seasonings—highlighting iconic brands such as Heinz, Philadelphia and Kraft Mac & Cheese—and is expected to generate annual sales of 15 billion dollars. The second company, set to remain under the leadership of current chief executive Carlos Abrams-Rivera, will focus on grocery lines with revenues surpassing 10 billion dollars each year.

Executive chairman Miguel Patricio referenced the challenge of complexity within the existing business, emphasising that streamlining the company structure will allow tailored resource allocation and better unlocking of each brand’s potential. Kraft Heinz, which dates back to 1869, now employs around 36,000 staff and its 200 brands are present in 55 food categories across 150 countries. The group has indicated that current headquarters in Pittsburgh and Chicago are to remain unaffected by the breakup.

Despite facing up to 300 million dollars in projected dis-synergies from the split, company leaders believe there are clear opportunities to alleviate a substantial proportion of these impacts in the near term. Berkshire Hathaway, a key shareholder, has already absorbed recent writedowns and admitted to overpaying during the original merger. The outlined split marks a decisive move to navigate tough market conditions and unlock new pathways for investor value.