Kraft Heinz to Split into Two Companies, Ending Big Food Era

Kraft Heinz Company is breaking up into two separate publicly traded companies, reversing a 2015 merger that failed to deliver favorable long-term results. The two companies will feature shelf-stable meals and North American staples, with brands including Heinz, Kraft Mac & Cheese, and Oscar Mayer. The split is intended to be tax-free and is expected to close in the second half of 2026.

Kraft Heinz Company, a prominent player in the packaged food industry, has announced its decision to split into two separate publicly traded companies. This move, effective in the second half of 2026, reverses a 2015 merger that aimed to create the third-largest food company in North America but ultimately failed to deliver favorable long-term results [1].

The new companies will focus on distinct market segments. One will concentrate on fast-growing categories such as sauces, pastas, and ready-to-eat meals, including brands like Heinz, Philadelphia, and Kraft Mac & Cheese. The other company will focus on everyday consumer staples and away-from-home products, including Oscar Mayer, Kraft Singles, and Lunchables [1][2].

Miguel Patricio, the executive chair of Kraft Heinz, stated that the current structure of the company has made it challenging to allocate capital efficiently and prioritize initiatives effectively. The split aims to ensure that each brand receives the right level of attention and resources to unlock its full potential, thereby enhancing performance and creating long-term value for shareholders [1][2].

The decision to split the company follows a period of declining sales and stock value. Kraft Heinz’s sales have dropped by 1.9% in the most recent quarter, marking the seventh consecutive quarter of decline. Shares of the company have plunged more than 68% since the merger was completed in 2015 [1].

Warren Buffett, who was disappointed by the split, acknowledged that Berkshire Hathaway had overpaid for Kraft in 2019 after a $15 billion write-down in the value of both Kraft and Oscar Meyer brands. Berkshire Hathaway remains the largest shareholder but has no intention of actively blocking the split [1].

Like many large food manufacturers, Kraft Heinz has faced inflationary pressure, with consumers cutting back on spending or switching to cheaper brands. Additionally, the rise of GLP-1 drugs has reduced demand for snack foods, and regulatory pressure to remove artificial flavors and additives has also impacted the company [1][2].

The split is expected to be tax-free and is part of a broader strategy to simplify the company's structure and improve operational efficiency. Analysts suggest that this move could help Kraft Heinz replicate the success of another packaged food giant, Kellogg, which split off its more popular brands into a new company in 2023 [1][2].

References:
[1] https://www.cnn.com/2025/09/02/business/kraft-heinz-breakup
[2] https://mezha.net/eng/bukvy/kraft-heinz-to-split-into-two-public-companies-by-2026/