Kraft Heinz may be headed for a breakup.
The packaged food conglomerate is planning to spin off a large chunk of its grocery business, the Wall Street Journal reported Friday, effectively undoing a 2015 merger that’s now widely regarded as a strategic blunder.
Anonymous sources told the newspaper the new entity would take many Kraft products with it and could be valued at up to $20 billion. Heinz ketchup, Grey Poupon mustard and other iconic sauces and spreads would be housed in the remaining company, though the exact allocation of brands is still being finalized.
The split could happen in a matter of weeks.
A Kraft Heinz spokesperson declined to comment Friday on the specifics of the report, dismissing it as “rumors” and “speculation,” but told TribLive that “Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value.”
The deal, inked more than a decade ago with overwhelming shareholder approval, once promised to spur growth for some of America’s most recognizable grocery brands. A key selling point was the backing of Warren Buffett’s Berkshire Hathaway and 3G Capital, a Brazilian private equity firm known for its “zero-based budgeting,” where every expense must be justified each year.
Heinz’s base in Pittsburgh was kept as a co-headquarters with the Kraft office in Chicago.
But headwinds in the packaged food industry have only strengthened since then, with customers turning toward fresher, less processed foods and balking at prices for some of their name brand favorite snacks.
Grocery prices have risen by about 31% since the formation of Kraft Heinz, according to the U.S. Bureau of Labor Statistics, with a pronounced spike between 2020 and 2022.
“I think certainly what we’ve seen since the pandemic are more people gravitating toward private label,” meaning generic brands, said Phil Lempert, an analyst and editor at SupermarketGuru.com.
Kraft Heinz Chief Financial Officer Andre Maciel told investors earlier this year the company is aware it’s losing cash-strapped customers and will use promotions and price adjustments to win them back.
The company responded to health concerns in June by promising to eliminate artificial dyes from products in the U.S. And, in recent years, it has tried to take a bite out of the plant-based market with things like vegan mayo and mac and cheese.
It has also unsuccessfully tried to sell off some of its underperforming brands, like Oscar Meyer and Maxwell House.
Since the merger, the stock has fallen more than 60%, and some $57 billion in market value has been erased.
Shares jumped by about 2.5% following the Wall Street Journal report.
Jack Troy is a TribLive reporter covering business and health care. A Pittsburgh native, he joined the Trib in January 2024 after graduating from the University of Pittsburgh. He can be reached at
