Kraft Heinz Split: Key Facts and Strategic Summary
- Kraft Heinz will separate into two independent publicly traded companies
- Global Taste Elevation Co will focus on international sauces and meals
- North American Grocery Co will target staple brands and cash efficiency
- Split aims to reduce complexity and sharpen strategic brand focus
- Combined 2024 net sales projected at over $25 billion across both entities
The food industry’s worst kept secret has finally been confirmed.
Kraft Heinz is to split into two separate entities.
In a statement released at 11am BST (6am ET) The Kraft Heinz Company announced that its Board of Directors has 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.
The separation will provide both companies with more strategic and operational focus.
“Kraft Heinz’s brands are iconic and beloved, but the complexity of our current structure makes it challenging to allocate capital effectively, prioritise initiatives and drive scale in our most promising areas,” says Miguel Patricio, executive chair of the board for Kraft Heinz.
“By separating into two companies, we can allocate the right level of attention and resources to unlock the potential of each brand to drive better performance and the creation of long-term shareholder value.”
Kraft Heinz has confirmed that the two resulting companies, whose names will be determined at a later date, 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.
Approximately 20% of 2024 net sales are in Emerging Markets and approximately 20% are in Away From Home.
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, which will be led by Carlos Abrams-Rivera, and will include a portfolio of brands, including Oscar Mayer, Kraft Singles and Lunchables.
Approximately 75% of net sales come from brands that are #1 or #2 in their respective categories. This company is expected to generate reliable free cash flow through operational efficiency across stable growth categories and through the pursuit of growth opportunities for its brands in existing categories, adjacencies and Away From Home.
More to follow
