Kraft Heinz Consider Split to Refocus Core Business

Source Credit : Portfolio Prints

August 30, 2025 — The Kraft Heinz Company is reportedly edging closer to a major corporate restructuring, potentially splitting itself into two independent entities as early as next week, sources indicate. The planned move would effectively reverse much of the 2015 merger orchestrated by Warren Buffett’s Berkshire Hathaway and 3G Capital.

What’s on the Table

• Grocery Spinoff: The proposed new company would encompass Kraft’s slower-growing grocery brands—such as Kraft cheese, Oscar Mayer, Maxwell House, Jell-O and related staples. This entity could be valued at up to USD 20 billion.


• Condiments & Sauces Core: The remaining business would concentrate on faster-growing, higher-margin categories like sauces, condiments, and spreads, including flagship names like Heinz Ketchup and Grey Poupon mustard.

Kraft Heinz executives believe that the combined worth of the two standalone companies could exceed the current market cap of around USD 33 billion.

Why Now?

• Eroding Performance: Since the 2015 merger, the company has struggled to keep pace with changes in consumer tastes. Kraft Heinz posted a substantial Q2 loss of USD 7.82 billion and continues to see weak sales of processed food items.


• Consumer Shift: Increasing demand for healthier, less processed foods has taken its toll on legacy grocery brands, prompting the company to explore strategic alternatives.


• Industry Momentum: Kraft Heinz follows a trend of food and beverage giants trimming portfolios. Competitors like Kellogg, Unilever, Mars, and Keurig Dr Pepper have undertaken similar structural shifts to drive growth and focus.


• Board Restructuring: Berkshire Hathaway relinquished its board seats earlier this year, signaling potential openness to bold strategic shifts.

TD Cowen analyst Robert Moskow argues that focused, category-leading companies often yield stronger long-term results than highly diversified conglomerates—a view that adds weight to strategic breakups like this one.

Risks & Ambiguities Ahead

• Decisions Pending: While the board is "working with urgency," no final approval or timeline has been confirmed. Sources caution that details could shift at the last minute.


• Complex Execution: Splitting operations, brands, supply chains, and finances is a daunting enterprise. Past divestment efforts—from Oscar Mayer to Maxwell House—have met with mixed success.


• Financial Health: Berkshire Hathaway’s recent earnings report included a USD 3.76 billion write-down on its Kraft Heinz stake—highlighting ongoing financial pressures and risks.

What This Means for Stakeholders

Stakeholder	Implication
Investors	Could unlock value through more transparent, focused businesses. Early optimism is reflected in share price increases following media reports.
Consumers	May see sharper brand identities and targeted marketing (e.g., healthier product lines).
Industry Peers	Sets a precedent for other CPG giants to re-evaluate sprawling portfolios.
Workforce & Supply Chain	Will likely face organizational realignment and transition challenges.

Final Thoughts

The potential breakup of Kraft Heinz marks a pivotal moment for a company once hailed as a masterstroke of consolidation. If executed well, it may revitalize focus, instill agility, and restore investor confidence. But as analysts and executives note, the complexity of disentangling a decade-old merged enterprise should not be underestimated.

As of now, we’re awaiting confirmation on the official structure, brand allocation, and timing of the split—possibly as soon as early September 2025.