THE maker of grocery favorites like Heinz Tomato Ketchup, Capri Sun and Kraft Mac & Cheese haven’t been doing too hot.
Kraft Heinz is weighing its options to stand out amid changing consumer habits and government regulations.
CEO Carlos Abrams-Rivera expressed in an earnings call Tuesday that splitting off part of the company into a new entity is on the table.
Kraft Heinz had previously announced that it was considering spinning off a chunk of its grocery segment – which includes many Kraft products – into a new unit, The Wall Street Journal reported.
But there’s nothing cheesy about it.
Insiders say the spinoff potentially valued at $20 billion would mark the biggest grocery deal in history.
While Heinz reiterated the idea during its earnings call, it maintains that it is “taking a rigorous review of a broad range of options.”
The company has not announced any timeline on any potential changes.
But people familiar with the matter told The Journal that “A split could be finalized in the coming weeks.”
Still, they stressed that the board hasn’t signed off on a final decision.
WEIGHING A BREAKUP
Kraft Heinz has found itself in a sticky situation considering consumer trends recently.
A spinoff could make way for increased interest.
The company reported losing $7.82 billion in the second quarter, per MarketWatch.
And as consumers struggle with inflation and tight budgets, the prices of its goods have increased by 0.7%.
At the same time, many Americans are ditching name brand goods in exchange for budget deals and more affordable alternatives.
But the price tag isn’t the only issue.
Brands operated by Kraft Heinz
A. 1. Bagel Bites Bakers Chocolate Capri Sun Classico Claussen Cool Whip Country Time Crystal Light Delimex Gevalia Grey Poupon Heinz Gravy Heinz Ketchup HeinzSeed Heinz Vinegar Jell-O Jet-Puffed Just Crack an Egg Kool-Aid Kraft Barbeque Sauce Kraft Foodservice Kraft Heinz Ingredients Kraft Mac and Cheese Kraft Salad Dressing Kraft Singles Lea & Perrins Lunchables Maxwell House Mio Miracle Whip Ore-Ida Oscar Meyer Philadelphia Primal Kitchen Shake N Bake Stove Top Sure-Jell Taco Bell TGI Fridays Velveeta Smart OnesHEALTH HANGUP
More health-conscious consumers are also turning their backs on processed foods and seeking healthier options.
And the government is on a roll to Make America Healthy Again.
Health & Human Services Secretary Robert F Kennedy Jr. is already cracking down on major food producers.
He’s particularly looking to wipe out food, drug, and cosmetic (FC&C) colors like Red Dye 40 from products.
Kraft Heinz’s North America president Pedro Savio said that the company will remove artificial dyes from every product.
However, the company says that won’t be a hassle.
“The vast majority of our products use natural or no colors, and we’ve been on a journey to reduce our use of FD&C colors across the remainder of our portfolio,” Navio said.
The companies that make products like Gatorade, Skittles, and M&M’s have also agreed to remove the dye.
Kraft Heinz also spoke out at the end of last year after removing Lunchables from from 29 million schools amid “health concerns.”
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