Kraft Heinz announced Tuesday it will divide into two separate companies, according to the company’s press release.
The food giant will create two companies by the second half of 2026. Global Taste Elevation Co. will house shelf-stable brands including Heinz ketchup, Philadelphia cream cheese and Kraft Mac & Cheese, which generated approximately $15.4 billion in 2024 sales. North American Grocery Co. will control North American staples like Oscar Mayer, Kraft Singles and Lunchables, with roughly $10.4 billion in 2024 sales, according to Kraft Heinz’s press release.
“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,” Miguel Patricio, executive chair of Kraft Heinz’s board, stated in the press release. “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. I look forward to working closely with [Kraft Heinz CEO Carlos Abrams-Rivera] and the Kraft Heinz team in the months ahead to prepare the organization for the separation.”
The Kraft Heinz breakup is less about creating value and more about salvaging it. When scale becomes a burden instead of an advantage, the only path left is focus. This is the market finally admitting the 2015 megamerger was financial engineering, not strategy. $KHC pic.twitter.com/kF4w1sa6Hl
— Jim Osman (@EdgeCGroup) September 2, 2025
A 2015 deal that resulted in Kraft Heinz, engineered by Berkshire Hathaway and private equity firm 3G Capital, quickly soured, CNBC reported. The Securities and Exchange Commission (SEC) subpoenaed the company in February 2019 over accounting practices. Kraft Heinz then cut its dividend by 36% and “took a $15.4 billion write-down” on the Kraft and Oscar Mayer brands, according to CNBC. Warren Buffett told the outlet that Berkshire Hathaway had overpaid for Kraft.
The company’s stock has fallen roughly 60% since the merger closed. Management sold the cheese division to Lactalis and the Planters brand to Hormel while writing-down other brands including Maxwell House and Velveeta, according to the outlet. (RELATED: EXCLUSIVE: Americans Can Now See If Companies Are Actually Making Good On Food Dye Pledge)
Current CEO Carlos Abrams-Rivera will lead the grocery staples company, the press release stated. The board has engaged an executive search firm for the other company’s leadership.