Kraft Heinz is splitting up, the company confirmed on Tuesday.
After the long Labor Day weekend and nearly two months after rumors of the split first began popping up, the food giant explained the reasons for separating into two companies and it comes down to "maximizing" brand capability while reducing "complexity."
What Is Kraft Heinz?
The Kraft Heinz Company is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world, managing eight individual brands valued at over $1 billion, according to a statement on its website.
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It was once two separate companies, before it merged as part of a big deal orchestrated by Warren Buffett's Berkshire Hathaway and Brazilian private-equity firm 3G Capital in July 2015. As NPR first reported, 3G's cost-cutting approach to retail brands helped Burger King and Anheuser-Busch, but it failed to prove successful at Kraft Heinz, and in recent years, the mega food giant has struggled with lost sales and mass layoffs, leading 3G to quietly pull out last year.
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The food and beverage industry titan oversees several makers of cult-favorite products around the globe, including these U.S. favorites:
Capri SunClassicoGrey PouponHeinz (ketchup, mustard, relish)Jell-OJet-PuffedKool-AidKraft (Mac & Cheese, Singles, barbecue sauce, salad dressing)LunchablesMaxwell HouseMioMiracle WhipOre-IdaOscar MayerPhiladelphia Cream CheeseShake N BakeSmart OnesStove TopTaco Bell retail productsTGI Friday's retailVelveetaWhy Is Kraft Heinz Splitting Up?
In short, the split is expected to make it easier for the new companies to better utilize resources and enable a "stronger performance" in the current market.
As Kraft Heinz CEO Carlos Abrams-Rivera explained in a Sept. 2 statement, “This move will unleash the power of our brands and unlock the potential of our business. This next step in our transformation is only possible because of the commitment of our 36,000 talented employees who deliver quality and value for consumers every day. We will continue to operate as ‘one Kraft Heinz’ throughout the separation process."
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The release suggested the separation would allow each of the companies to "reduce operational complexity" by minimizing the scope of what each business oversees, allowing the "right level of attention and resources" to be dedicated to the respective brand portfolios and support the "strategic ambition of each company."
Miguel Patricio, executive chair of the board for Kraft Heinz, noted that while "Kraft Heinz’s brands are iconic and beloved," the "complexity" of the current structure "makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas."
"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," Patricio shared.
Kraft Heinz currently expects the transaction to close in the second half of 2026, following completion of customary conditions like filing with the U.S. Securities and Exchange Commission and receiving board approval.
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There's been no set date shared publicly just yet, but this is only the beginning stages of this process.
Is Kraft Heinz Rebranding or Discontinuing Products?
The preliminary notice did not directly address whether the split would affect employees or retail products, but it did not explicitly suggest that any cuts would be coming.
As for what the new companies will look like, several questions remain, including whether they will be renamed and if the current lineup of offers will remain unchanged. From the looks of it, there will, at least, be some sort of rebranding process.
According to the Sept. 2 announcement, the names of the two companies resulting from the split have not yet been determined, but they will be shared at "a later date," as will the names of all the brands allocated to each of the new companies.
That said, the board does have a loose plan in place to divide the portfolios, using "Global Taste Elevation Co." to represent its brands focusing on shelf-stable sauces, spreads, seasonings and meals (like Heinz, Philadelphia and Kraft Mac & Cheese) and "North American Grocery Store Co." to refer to its North American market staples (which it said include Oscar Mayer, Kraft Singles and Lunchables) that will be run by Kraft Heinz' current CEO.
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