Kraft Heinz Announces Plan to Split Into 2 Companies

Since 2024, the company’s quarterly sales have consistently registered year-over-year declines.

Kraft-Heinz products on a grocery store shelf in New York City, on March 25, 2015. Brendan McDermid/Reuters

Multinational food corporation The Kraft Heinz Company will split into two companies in a bid to boost profits and unlock shareholder value, the company said in a Sept. 2 statement.

Kraft Heinz was formed in 2015 by the merger of Kraft Foods and H.J. Heinz.

Since 2024, the company’s quarterly sales have consistently registered year-over-year declines, raising questions about its financial performance.

Kraft Heinz said that the decision to split into two independent, publicly traded companies was taken to enable stronger performance.

One of the spin-off companies will include brands such as Heinz, Philadelphia, and Kraft Mac & Cheese, with 75 percent of net sales coming from sauces, spreads, and seasonings. This group had combined net sales of $15.4 billion in 2024.

The second spin-off company will carry brands such as Oscar Mayer, Kraft Singles, and Lunchables, with the portfolio generating $10.4 billion in net sales last year.

According to Kraft Heinz, the separation plan has been “unanimously approved” by the company’s board of directors.

“The complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives, and drive scale in our most promising areas,” Miguel Patricio, executive chair of the board for Kraft Heinz, said.

“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.”

Buffett’s Response, Shares Fall

Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital were behind the merger back in 2015.

Buffett said in a Kraft statement at the time, “This is my kind of transaction, uniting two world-class organizations and delivering shareholder value.”

Following the latest announcement, Buffett said in an interview with CNBC that he was “disappointed” in the split. He said that he does not believe taking apart the company will fix its problems.

As of June 30, Berkshire Hathaway owns about a 28 percent stake in Kraft Heinz.

Shares of Kraft Heinz fell by more than 5 percent following Buffett’s comments.

On Tuesday, Kraft Heinz shares opened at $27.76, 0.75 percent lower than Friday.

Kraft Heinz said its board has created a separation committee to oversee the separation process.

The proposed split will be a tax-free process for Kraft Heinz and its shareholders and is expected to be completed in the second half of 2026.

“The transaction will follow the satisfaction of customary conditions, including final approval by the Kraft Heinz Board of Directors, receipt of a tax opinion with respect to the tax-free nature of the separation and effectiveness of appropriate filings with the U.S. Securities and Exchange Commission,” the company said in its statement.

“Capital structure, and certain other matters for each business, such as board composition, company name and brand allocation, will be announced at a later date.”

Kraft Heinz had announced back in May that its board and executive leadership team were looking at strategic transactions to unlock shareholder value.

The company decided that splitting into two entities was the most optimal choice, it said.

Kraft Heinz, headquartered in Chicago, employs more than 37,000 workers. According to the company, it is the fifth-largest food and beverage company globally and the third biggest in North America.

In May, Kraft Heinz announced that it planned on spending $3 billion to upgrade domestic manufacturing, a decision aimed at lowering the cost of operations and tackling the impact of the Trump administration’s import tariffs.

In an April press release, Kraft Heinz CEO Carlos Abrams-Rivera said that the company was lowering its full-year outlook in a bid to “better reflect potential outcomes.”

“We’re closely monitoring the potential impacts from macro-economic pressures such as tariffs and inflation,” he said at the time.

Kraft Heinz is also aligning with the Trump administration’s push to ensure a healthy food supply chain in the United States.

On June 17, the company announced it would no longer launch any new products in the United States containing artificial colors. It also committed to removing such additives from its existing portfolio by the end of 2027.

The decision followed the Department of Health and Human Services (HHS) and the Food and Drug Administration’s call for phasing out petroleum-based synthetic dyes from foods.

“For too long, some food producers have been feeding Americans petroleum-based chemicals without their knowledge or consent,” Health Secretary Robert F. Kennedy Jr. said in an April 22 statement.

He said the department was working with the industry to get rid of the “toxic dyes” from the food supply.