Kraft Heinz Shelves Breakup Plan, Announces $600m Turnaround Investment

Kraft Heinz has abandoned plans to split its business in two, opting instead to keep its portfolio of brands under one roof as it works to revive slowing sales.

The food conglomerate, whose products include Kraft Mac & Cheese, Heinz Ketchup, Oscar Mayer and Philadelphia cream cheese, had announced last year that it intended to separate its faster-growing condiment division from legacy grocery brands that have struggled in recent years.

However, the company said worsening sales performance and shifting market conditions have made a spinoff less attractive. Chief executive Steve Cahillane, who assumed the role earlier this year after previously leading Kellogg, confirmed on Wednesday that the separation would be put on hold.

In a statement, Cahillane cited weakening consumer confidence, softer industry trends and geopolitical uncertainty as factors complicating the company’s recovery efforts.

Instead of pursuing a breakup, Kraft Heinz plans to invest $600 million into marketing, sales initiatives, and research and development in a bid to stabilise and grow the business. Cahillane said the company would reconsider structural changes once performance improves.

The decision marks another chapter in the company’s turbulent history since Kraft and Heinz merged in 2015 in a deal backed by Berkshire Hathaway and 3G Capital.

In recent years, several of its flagship products – including processed cheese and ready-to-eat meals – have faced declining popularity as consumers increasingly seek healthier and organic alternatives. Like many major food manufacturers, Kraft Heinz has also been contending with inflation-conscious shoppers trading down to store brands, as well as broader shifts in eating habits.

Despite the challenges, some analysts believe the renewed investment could help reposition the company. Bernstein analyst Alexia Howard said the spending plan may provide the reset needed after years of underperformance.

Kraft Heinz has not set a new timeline for revisiting the potential separation, indicating that any future decision will depend on improved financial momentum.