Kraft Heinz announces split

The Kraft Heinz Company (Kraft Heinz) has announced that its Board of Directors has unanimously approved a plan to separate the company into two independent, publicly traded companies.

The separation is designed to maximise Kraft Heinz’s capabilities and brands while reducing complexity, allowing both new companies to more effectively deploy resources towards their distinct strategic priorities. This focus is intended to enable stronger performance while preserving the scale to compete and win in today’s environment.

The two resulting companies, whose names will be determined at a later date, will be:

1. ‘Global Taste Elevation Co.’ — a global leader in taste elevation and shelf-stable meals with approximately $15.4 billion in 2024 net sales and approximately $4.0 billion in 2024 adjusted EBITDA.
   
   This company will include a roster of brands — including Heinz, Philadelphia and Kraft Mac & Cheese  — with approximately 75% of net sales coming from sauces, spreads and seasonings. Approximately 20% of 2024 net sales are in Emerging Markets and approximately 20% are in Away From Home.
    
2. ‘North American Grocery Co.’ — a scaled portfolio of North America staples with approximately $10.4 billion in 2024 net sales and approximately $2.3 billion in 2024 adjusted EBITDA.
   
   This company, which will be led by Carlos Abrams-Rivera, will include a portfolio of brands — including Oscar Mayer, Kraft Singles and Lunchables. Approximately 75% of net sales come from brands that are #1 or #2 in their respective categories.

“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in our most promising areas,” said Miguel Patricio, Executive Chair of the Board for Kraft Heinz.

“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 organisation for the separation.”

Abrams-Rivera, Kraft Heinz CEO, said, “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.”

Image caption: The Kraft Heinz Canada head office in North York, Toronto. Image credit: iStock.com/JHVEPhoto