When Kraft Heinz announced it was splitting in two – with Heinz ketchup and Philadelphia cream cheese becoming ’Global Taste Elevation Co’ while Kraft Singles and Maxwell House were grouped into ’North American Grocery Co’ – it raised eyebrows across the industry. Back in 2015, Warren Buffett and 3G Capital had promised the ultimate food giant: leaner, meaner, and unstoppable. Cost efficiencies were made, portfolios streamlined, and for a time the model looked strong.
But brands don’t run on spreadsheets alone. They live in memory, trust, and emotion. Strip those away, and you strip away the very thing that makes people willing to pay more than the commodity price.
Nobody buys Kraft Singles for craftsmanship or Maxwell House for terroir. They buy them for comfort, nostalgia, reliability. These feelings aren’t decorative, they’re the asset. And when brands underinvest in them, the commercial impact is clear. Revenues across Kraft Heinz have declined since 2020, and the company’s stock price has dropped significantly since the merger.
The caution here isn’t that Kraft Heinz failed. It’s that even the biggest players are vulnerable if they mistake efficiency for value-creation.
The emotional difference
In categories where products look and taste similar, emotion is often the only true differentiator. Coke isn’t sugared water – it’s joy. Nespresso isn’t coffee – it’s everyday luxury. Häagen-Dazs isn’t ice cream – it’s indulgence. Functional differences are minimal; emotional ones are everything.
That’s why private label growth is so disruptive. Own label now accounts for more than half the market in some European categories. Retailer brands don’t need to inspire – they just need to deliver. But if branded products lose their emotional edge, shoppers will naturally trade down. Desire really is the most underpriced asset in grocery. Brands that spark it consistently outperform on pricing power, growth, and resilience.
The success stories prove the point. Tony’s Chocolonely has built loyalty not through deep discounts but through a mission people believe in. Oatly turned oat milk into a lifestyle choice. Graza made olive oil fun. These aren’t premium because of functional superiority alone; they’re premium because people feel something.
Cut too far and the opposite happens. shrinkflation, thinner slices, stretched mayo – shoppers don’t just notice, they feel short-changed. Neuroscience tells us emotion encodes memory. That betrayal lingers. It’s why emotionally connected brands generate 52% more customer value than those that only satisfy, according to Harvard Business Review.
Investing in growth
Smarter brands are already reframing their investments. In-store theatre and retail media are booming, projected to grow from £2.7bn today to £6.5bn by 2027. Even fleeting interactions matter: memory starts forming in as little as 2.5 seconds. A brief moment at the shelf can tip the scales between “good enough” and “worth paying more for.”
This is where brand performance comes into play. Strong emotional equity isn’t just a “soft” metric, it directly drives revenues, margins, and resilience. Landor’s global BrandAsset Valuator study shows that the top 10 most powerful brands outperform leading market indices by 300%. In other words, investing in emotion is not indulgent. It’s growth strategy.
The real takeaway for grocery is, don’t confuse cost-cutting with value-creation. Don’t leave emotion as an afterthought. Brands that endure are the ones that deliver a consistent feeling everywhere they show up, whether on pack, in store, or in culture.
Because ultimately, you can shuffle portfolios and spin decks endlessly, but if your brand no longer feels like something, then it’s nothing.
A Kraft Single is only worth more than a generic slice if it still feels like comfort. Strip that away, and the emperor has no cheese.
Aaron Shields, executive director of experience strategy at Landor
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