Kraft Heinz decides to separate into two publicly traded companies

The Kraft Heinz Company (Kraft Heinz) announced in a recent press release that the company’s Board of Directors had unanimously approved a plan that would split the organization into two publicly traded and independent companies through a tax-free spin-off.¹ The objective from this decision is to help “maximize Kraft Heinz’s capabilities and brands while reducing complexity, allowing both new companies to more effectively deploy resources toward their distinct strategic priorities.”¹

With this split announced, the two companies’ names will be decided at a later time but for now will be¹:

• “Global Taste Elevation Co.” – will feature a diverse portfolio of brands, including, Heinz, Philadelphia, and Kraft Mac & Cheese, all of which are well-performing brands. It is anticipated that 75% of its net sales will stem from sauces, spreads, and seasonings. The company will have a strong international presence, with about 20% of its 2024 net sales from emerging markets as well as another 20% from the Away From Home sector.
• “North American Grocery Co.” – will consist of a portfolio of staple brands that have generated around $10.4 billion in net sales and $2.3 billion in Adjusted EBITDA in 2024. The company, will include iconic brands, such as Oscar Mayer, Kraft Singles, and Lunchables. With about 75% of its net sales coming from brands that are #1 or #2 in their categories, the company is well-positioned to drive reliable free cash flow through a focus on operational efficiency and growth opportunities both in and outside of its existing markets.

“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,” said Miguel Patricio, executive chair of the board for Kraft Heinz.¹ “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 Carlos and the Kraft Heinz team in the months ahead to prepare the organization for the separation.”

The press release mentioned that through this split, the companies will be able to¹:

• Dedicate the right level of attention and resources to all areas of the business, allowing each respective brand portfolio to reach its full potential.
• Reduce operational complexity, driving further efficiencies and industry-leading margins.
• Customize capital allocation based on the strategic ambition of each company, accelerating performance and retaining financial flexibility.

It is anticipated that both organizations will have access to “ample discretionary cash flow” which they plan to use to help make decisions on strategic transactions, invest in organic growth, as well as returning capital to shareholders.¹

Carlos Abrams-Rivera, Kraft Heinz CEO, mentioned¹, “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.”

Regarding management, it is planned for Carlos Abrams-Rivera to remain as CEO of Kraft Heinz and will then be the CEO of “North American Grocery Co.” once the separation of the companies has been completed. For Global Taste Elevation Co.”, the Board of Directors are utilizing a global executive search firm to help select potential candidates for the CEO position.¹ Currently, Kraft Heinz does not intend to change the location of their headquarter locations.

Jack Pope, Lead Director of the Board, said, “We believe these changes will best position us to execute on our plan to separate into two independent, publicly traded companies. Prior to the completion of the separation, our focus will continue to be on accelerating profitable growth and delivering shareholder value.”

In June 2025, Kraft Heinz announced that the company would be removing Food, Drug & Cosmetic (FD&C) colors from their current products on the market prior to the end of 2027.² Only a limited number of items in their product portfolio still contain FD&C coloring, while 90% of their US products have removed them from their labels.

Back in June 2022, the Kellog Company (Kellogg) revealed that they would be separating into three companies that would focus on cereals, snacks, and plant-based foods.³ The move was made to bring “an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities. In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth," said Steve Cahillane, Kellogg Company's chairman and chief executive officer, in the company’s’ press release.³

Reference

1. The Kraft Heinz Company announces plan to separate into two scaled, focused companies to accelerate profitable growth and unlock shareholder value https://www.businesswire.com/news/home/20250902318952/en/The-Kraft-Heinz-Company-Announces-Plan-to-Separate-into-Two-Scaled-Focused-Companies-to-Accelerate-Profitable-Growth-and-Unlock-Shareholder-Value (accessed Sep 2, 2025).
2. Colli, M. Kraft Heinz and General Mills to remove FD&C colors from product portfolios https://www.nutritionaloutlook.com/view/kraft-heinz-and-general-mills-to-remove-fd-c-colors-from-product-portfolios (accessed Sep 2, 2025).
3. Krawiec, S. Kellogg’s to split business in three companies that focus on snacks, cereal, and plant-based foods https://www.nutritionaloutlook.com/view/kellogg-to-split-business-in-three-companies-that-focus-on-snacks-cereal-and-plant-based-foods (accessed Sep 2, 2025).