Branded Consumer Goods Companies Face Turmoil Amid Falling Share Prices

Branded consumer goods companies, including Nestle, Kraft Heinz, Unilever, Pepsi, and Coca-Cola, are under siege amid falling or stalling share prices. The firms are breaking up to release value, with some selling off subsidiaries and others proposing splits. This trend is reminiscent of the mid-1980s and 1990s break-ups of conglomerates, driven by the use of cheap debt to take out quoted firms and split them into component parts. The current break-ups are driven by a desire to focus on core brands and a shift in consumer demand.

Amidst falling or stalling share prices, major branded consumer goods companies are exploring strategic splits and sales of subsidiaries to unlock value and adapt to shifting consumer demands. This trend echoes the mid-1980s and 1990s break-ups of conglomerates, driven by a focus on core brands and a desire to streamline operations.

Kraft Heinz Co. has announced a plan to separate into two publicly traded companies, with one unit focusing on sauces, spreads, and boxed meals like Heinz ketchup and Kraft Mac & Cheese, and the other on grocery products such as Oscar Mayer hotdogs and Lunchables [1]. This move aims to streamline operations and provide greater resources to individual brands, potentially driving profit. The split will occur through a tax-free spinoff, with the companies' names to be determined later.

Unilever, Nestlé, PepsiCo, and Coca-Cola are also considering similar strategies. PepsiCo, for instance, is facing a major activist campaign by Elliott Investment Management, which has built a $4 billion stake in the company. Elliott is advocating for a potential re-franchising of the North American bottling business and a review of the brand portfolio [2].

These strategic moves come as consumers increasingly demand personalized, value-driven experiences and frictionless buying processes. According to a recent Forbes Business Council survey, consumers are more likely to engage with brands that offer immediate, authentic, and transparent interactions [3].

The shift in consumer behavior is also driving a preference for AI-driven platforms and curated solutions. Companies are adapting by investing in technology to enhance responsiveness and efficiency, aligning with the evolving expectations of modern consumers.

The current market conditions and consumer behavior trends are prompting these companies to reassess their business models and focus on their core strengths. By breaking up into more manageable units, these firms hope to better meet consumer demands and unlock new value.

References:
[1] https://news.bloomberglaw.com/mergers-and-acquisitions/kraft-heinz-to-separate-into-two-publicly-traded-companies
[2] https://finance.yahoo.com/news/top-midday-stories-kraft-heinz-154125107.html
[3] https://www.forbes.com/councils/forbesbusinesscouncil/2025/09/02/20-recent-shifts-in-consumer-behavior-and-how-to-adapt-as-a-business/