A New Chapter for Kraft Heinz: Splitting the Business to Spark Growth

Kraft Heinz US5007541064

The year 2026 marks a pivotal transition for Kraft Heinz. On January 1, Steve Cahillane formally assumed the role of Chief Executive Officer, stepping into a position that comes with an immediate and monumental challenge. His primary mandate is to execute one of the most significant restructurings in the recent history of the food industry: splitting the conglomerate into two separate, publicly traded companies. This strategic shift follows a difficult period for shareholders, with the stock closing out 2025 down approximately 21%.

The planned separation is designed to create two distinct entities, each with a clear strategic focus. One company will be built for international growth, while the other will be geared toward generating stable cash flow in a mature market.

Cahillane will lead the new Global Taste Elevation Co., which will house the iconic Heinz brand alongside other sauces and seasoning products. This portfolio, generating annual revenues of about $15.4 billion, is intended to be the growth engine, with a focus on global expansion.

The second entity, the North American Grocery Co., will encompass established staple brands such as Oscar Mayer, Lunchables, and Kraft Mac & Cheese. With roughly $10.4 billion in revenue, this company’s role is to provide consistent cash flow, though it faces intense pressure from lower-priced private-label competitors. The board is currently conducting a search for a dedicated CEO to lead this standalone business.

Navigating a Challenging Landscape

The company’s recent stock performance reflects a confluence of sector-wide and specific headwinds. Consumer spending has become increasingly price-sensitive following prolonged inflationary pressures, negatively impacting sales volumes across the industry. Furthermore, the growing popularity of GLP-1 weight-loss drugs has introduced an unexpected variable, suppressing demand for processed foods.

These challenges have contributed to Kraft Heinz’s valuation lagging behind rivals like Mondelez and PepsiCo. Reflecting the perceived risks associated with the complex corporate overhaul, the prevailing analyst recommendation for the stock is currently "Hold."

To ensure a smooth leadership transition, outgoing CEO Carlos Abrams-Rivera will remain in an advisory capacity until March 6, 2026.

Execution is Key to Regaining Confidence

Management has targeted the second half of 2026 to complete the separation. All eyes are now on Steve Cahillane, who brings relevant experience from overseeing a similar split during his tenure at Kellanova. His ability to transform two struggling divisions into two agile, high-performing companies will be the ultimate test.

The market awaits more concrete financial details, which are expected when Kraft Heinz reports its fourth-quarter 2025 results. Until then, the central question remains whether this radical new structure can successfully restore investor confidence and unlock latent value.