Kraft Heinz Plans to Split into Two Separate Companies

PITTSBURGH, Pa. — Kraft Heinz is set to split into two independent companies, reversing a merger that created one of the world’s largest food companies nearly a decade ago. The split will be finalized and announced by next week, according to reports.

The first entity will focus on shelf-stable meals and include brands such as Heinz, Philadelphia, and Kraft mac and cheese. Kraft Heinz projects this company will generate $15.4 billion in net sales by 2024, with about 75% of revenue coming from sauces and spreads.

The second company will encompass a portfolio of North American staples, featuring products like Oscar Mayer, Kraft Singles, and Lunchables, with expected net sales of approximately $10.4 billion in 2024.

“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively,” said Miguel Patricio, executive chair of the board. “By separating into two companies, we can focus on each brand’s potential to drive better performance.”

This split marks a significant shift as Kraft Heinz tries to enhance its performance after various challenges post-merger, such as declining U.S. sales and scrutiny from the Securities and Exchange Commission. The company recently faced a $15.4 billion write-down and a dividend cut of 36%.

analysts suggest that the new grocery company could be valued at around $20 billion, exceeding Kraft Heinz’s current market capitalization of about $33 billion. The move reflects a growing trend among major food companies seeking to streamline operations and focus on high-growth categories.

In recent months, Kraft Heinz has also been working on strategic transactions to unlock shareholder value and boost its brands, including Lunchables and Capri Sun. The new structure aims to better position itself with increasing investor expectations as well.