Kraft Heinz said Wednesday it’s pausing a planned split and launching a $600 million investment campaign to tackle what new CEO Steve Cahillane called “fixable” challenges.
The company announced in September it will divide its roughly 200 brands into one firm focused on high-performing sauces and spreads and another made up of less lucrative labels. That plan had Cahillane’s support when he took the top job at the company in January.
It’s now on hold indefinitely, Cahillane told analysts Wednesday, reflecting a somewhat unexpected shift for an executive who steered Kellogg’s through its 2023 breakup into separate cereal and snack food companies.
“What I’ve since learned is how much opportunity there is to fix the business in the short term,” Cahillane said in the earnings call to discuss year-end results.
Money will flow into sales and marketing, where the company is planning to bolster its staff, as well as reducing prices, improving packaging and doubling down on research and development.
Investments will disproportionately target the U.S. and some of the packaged food conglomerate’s struggling pantry staples, which the breakup plans lumped under the North American Grocery Co.
Cahillane said Heinz ketchup and Philadelphia cream cheese — slated to be flagships for the other spin-off, Global Taste Elevation Co. — have already shown improvement based on changes made before he joined the company.
Leadership expects sales to improve in the back half of this year and into 2027.
“My number one priority is returning the business to profitable growth, which will require ensuring all resources are fully focused on the execution of our operating plan,” Cahillane said in a statement.
Cahillane’s optimism was juxtaposed with some tough financial results for the company.
Kraft Heinz took a $4.7 billion operating loss last year, compared to a $1.7 billion operating gain in 2024. Sales fell by 3.5% last year as international growth failed to make up for declining consumer interest in North America.
Financial struggles have been a hallmark of the $23 billion marriage of Kraft and Heinz. The 2015 deal was promised to bust stagnant sales. Instead, they’ve continued to slide along with the company’s stock price, which is down 19% in the past year.
Cahillane’s approach, however, would reverse some of perceived missteps early on in the merger. Many of the areas targeted for investment were pared back by cost-cutting Brazilian private equity firm 3G Capital, which backed the deal alongside Berkshire Hathaway.
Warren Buffett, who masterminded the merger as head of Berkshire Hathaway, previously expressed disappointment in the plans to effectively undo his work. The massive holding company has since moved to unwind its 28% stake in Kraft Heinz.
3G exited the business in late 2023.
Correction: Steve Cahillane is the CEO of Kraft Heinz. An earlier version of this story misspelled his name.
