Kraft Heinz’s new boss has called off the food giant’s break-up, surprising markets in a pre-Valentine’s Day update.
CEO Steve Cahillane, who joined the company only six weeks ago from Kellanova, told investors the company’s opportunities were “larger than expected” and many of its challenges were “fixable and within [its] control”.
Announcing a $600m (£440.5m) investment package in marketing, sales and R&D, alongside “product superiority and select pricing”, he added his top priority was “returning the business to profitable growth”.
“[This] will require ensuring all resources are fully focused on the execution of our operating plan,” he said.
“As a result, we believe it is prudent to pause work related to the separation and we will no longer incur related dis-synergies this year.”
Up to $300m of dis-synergies had been expected from the company’s break-up.
Approved by the board in early September, Kraft Heinz’s split would have refocused the business into two multibillion-dollar entities, one supplying sauces, spreads and seasonings, and the other producing foods under brands such as Oscar Mayer, Kraft Singles, and Lunchables.
At the time, the separation was deemed necessary to “dedicate the right level of attention and resources to all areas of the business”, “reduce operational complexity”, and unlock better value for shareholders.
The shock decision was revealed alongside Kraft Heinz’s full-year results, which showed a 3.4% decline in organic net sales to $24.9bn.
Organic sales in the company’s $18.6bn North America division fell 4.7%, as volumes slumped 5%.
And despite a profitable Q4 – operating income jumped from a loss of $40m in Q4 2024 to a profit of $1.1bn in the same quarter of 2025 – Kraft Heinz slumped to a $4.7bn operating loss in the full year, as the company wrote $9.3bn off the value of its assets.
Underlying operating income fell 11.5% in the year to $4.7bn, thanks largely to supply chain inflation and falling volumes.
Cahillane insisted, however, that the company could achieve profitable growth through its new investment plan, as free cashflow increased 15.9% to $3.7bn.
“Thanks to disciplined financial stewardship, our balance sheet is strong and our free cashflow capabilities robust – positioning us well to fund these investments and execute on the plan, while still generating excess cash,” he said.
“We are confident in the opportunity ahead and believe this investment will accelerate our return to profitable growth.”
“Kraft Heinz is already seeing the benefit of Steve’s deep industry experience and proven track record of building brands and leading large-scale transformations,” said Kraft Heinz chairman John Cahill.
“From day one, he has brought a fresh, consumer-first perspective that we believe creates a clear glidepath back to profitable growth.
“We are confident our decision to pause the work related to the separation and fully focusing our resources in service of growth is the right move at this time. We remain excited about the road ahead for Kraft Heinz.”
Kraft Heinz was formed in 2015 when Warren Buffett’s investment firm Berkshire Hathaway and Brazilian PE firm 3G Capital oversaw a merger. It followed the pair’s $28bn buyout of Heinz two years earlier.
Shares in the combined entity have fallen two-thirds since the merger, with the failed takeover of Unilever in 2017 weighing heavily on the stock.
Berkshire Hathaway has now swallowed $7.8bn in losses on its 27% stake in Kraft Heinz. Buffett has since admitted he had “overpaid for Kraft” and been “wrong in a couple of ways” about the combined group.
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