Summary of Kraft Heinz demerger and future outlook
- Kraft Heinz will split into two independent companies in 2026
- Global Taste Elevation Co will focus on sauces and shelf-stable meals
- North American Grocery Co will manage staples like Oscar Mayer and Lunchables
- Analysts expect stronger growth for sauces business versus grocery division
- Success depends on execution, R&D investment, and retailer relationships
News that one of the biggest mergers in food and beverage history had collapsed shocked the industry, when it was announced back in September 2025.
In a statement released by the multinational it revealed the Board of Directors had unanimously approved a plan to separate into two independent, publicly traded companies through a tax-free spin-off.
The separation, said the statement, 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.
What we know so far ?
Kraft Heinz has confirmed the company will be divided as follows:
Global Taste Elevation Co.
A global leader in Taste Elevation and shelf-stable meals with approximately $15.4bn (€13.2bn) in 2024 net sales and approximately $4.0bn in 2024 Adjusted EBITDA.
Its brand portfolio will include Heinz, Philadelphia and Kraft Mac & Cheese, with approximately 75% of net sales coming from sauces, spreads and seasonings.
North American Grocery Co.
A scaled portfolio of North America staples with approximately $10.4bn in 2024 net sales and approximately $2.3bn in 2024 Adjusted EBITDA.
This company will include a portfolio of brands, including Oscar Mayer, Kraft Singles and Lunchables.
But while that went some way to outlining the structure of the demerged company, little has been disclosed since, other than of course the appointment of Steve Cahillane as CEO of the newly-formed Global Taste Elevation Co.
So how will the separation of the $28.7bn (€24.6bn) food giant actually work?
Why is Kraft Heinz separating?
“Kraft Heinz has failed to ignite sales growth,” says Erin Lash, CFA director of consumer equity research at financial services firm Morningstar.
The problem, she explains, has been exacerbated by weak consumer spending, increased regulatory oversight, and heightened demand for healthier products.
The company has argued that the separation will allow each business to sharpen its strategic focus and stabilise brand equity.
Morningstar’s Lash isn’t convinced.
“We believe the primary motivation is to unlock a higher multiple for the higher-margin, faster-growing sauces business.”
This move, she says, mirrors similar simplification actions from WK Kellogg/Kellanova, Kraft/Mondelez, Conagra/Lamb Weston, Sara Lee, Fortune Brands, and others over the past 10-15 years.
Successful demerger
Establishing two independent, fully functioning businesses is inherently complex, involving operational disentanglement, IT systems separation, talent allocation, and the creation of distinct governance structures.
These challenges often introduce transitional inefficiencies and execution risks, particularly around shared services and supply chain integration.
However, Kraft Heinz appears well-positioned to navigate this process thanks to leadership experience. The newly appointed CEO brings direct expertise from Kellogg’s 2022–2023 split into WK Kellogg and Kellanova, a precedent that required similar strategic and operational rigor.
This background should provide valuable insights into sequencing, stakeholder communication, and mitigating disruption, which could