Kraft Heinz said it will separate into two independent, publicly traded companies, unwinding a 2015 tie-up forged by Warren Buffett’s Berkshire Hathaway and 3G Capital.
One business will focus on global sauces, spreads and seasonings under the “Global Taste Elevation” banner. The other will center on packaged staples in the U.S. and Canada as “North American Grocery Co.” Completion is targeted for the second half of 2026, pending approvals.
Two businesses, two strategies
“Taste Elevation” will house brands like Heinz ketchup, Philadelphia cream cheese and Kraft Mac & Cheese, with roughly $15 billion in annual sales and a global footprint. “North American Grocery” will include Kraft Singles, Lunchables and Oscar Mayer, at about $10 billion in sales, focused on the U.S. and Canada.
Timeline and mechanics
The board unanimously approved a tax-free spin-off structure. Management expects headquarters to remain in Chicago and Pittsburgh, with final names, tickers and distribution details to follow as the separation plan advances.
Carlos Abrams-Rivera, current Kraft Heinz CEO, is slated to lead North American Grocery. A search is underway for the leader of Global Taste Elevation.
Financial backdrop
The break-up follows a tough quarter: Kraft Heinz recorded a $9.3 billion non-cash impairment in Q2 2025 tied to a sustained decline in its market value, swinging to an $8.0 billion operating loss on GAAP. The company kept its 2025 outlook.
Management argues simpler, focused portfolios should accelerate growth and execution. The company aims to maintain dividends and investment-grade ratings across both entities, while acknowledging up to $300 million in potential “dis-synergies.” Execution risk is real given shared systems and integrated operations built since 2015.
Shares edged higher around the announcement. Expect volatility as investors handicap margins, growth, and capital structures for both companies into 2026.
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