A decade after the merger that created one of the world’s largest food manufacturers, Kraft Heinz announced it will divide into two separate businesses.
One unit, temporarily named Global Taste Elevation Co., will house faster-growing brands such as Heinz, Philadelphia cream cheese, and Kraft Mac & Cheese. The other, North American Grocery Co., will include slower-selling staples like Maxwell House, Oscar Mayer, Kraft Singles, and Lunchables. Official names will be revealed later.
The move follows a strategic review launched in May and is expected to be completed in the second half of 2026. Kraft Heinz, formed in 2015 to leverage scale, has since struggled to adapt as consumers increasingly favor healthier options. The company spent years focused on cutting costs, while competitors poured money into innovation to match shifting consumer preferences. Shoppers tightening their budgets have leaned toward store-brand packaged goods, while those willing to pay more often opt for fresher alternatives over processed foods. When announcing the split, executives also pointed to “historically low consumer sentiment” as a factor.
Kraft Foods and H.J. Heinz came together in 2015 through a megamerger engineered by Heinz’s backers, Warren Buffett’s Berkshire Hathaway and Brazilian private-equity firm 3G Capital. 3G, renowned for reviving Burger King and Anheuser-Busch with aggressive cost-cutting, applied the same formula at Kraft Heinz. But while it delivered layoffs and savings, it failed to generate lasting growth.
In 2019, the company stunned Wall Street with a $15 billion write-down of flagship brands Oscar Mayer and Kraft, triggering lawsuits and a federal probe. More losses followed: in July, Kraft Heinz reported a nearly $8 billion net loss, weighed down by a $9.3 billion impairment charge tied to its sinking share price. Berkshire Hathaway also marked down its own stake by $3.8 billion. By mid-2025, Kraft Heinz’s stock had fallen two-thirds from its post-merger high. News of the breakup pushed shares down another 7% on Tuesday.
“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas,” said Miguel Patricio, executive chair of the board for Kraft Heinz. “By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value.”
