Kraft Heinz halts business split, plans US$600M investment to drive growth
New CEO aims to restore profitability through product and marketing investments.
USA – Kraft Heinz has decided to suspend its planned split of the company’s condiment and grocery businesses, with CEO Steve Cahillane describing the company’s challenges as manageable.
The company will allocate US$600 million to marketing, sales, research and development, and improving product quality, while exploring potential price adjustments to boost sales.
Cahillane, who became CEO on January 1, said his immediate focus is returning Kraft Heinz to profitable growth, particularly for iconic brands such as Heinz ketchup and Philadelphia cream cheese.
The decision reverses a September announcement that would have divided the company into a sauces-and-spreads unit and a grocery-staples unit, including products such as Oscar Mayer meats, Kraft Singles, and Lunchables.
The split was intended to create two independent businesses, but doubts quickly arose about whether the separation would address Kraft Heinz’s underlying issues, including declining sales in processed foods.
Investor Warren Buffett expressed disappointment at the proposed separation, demonstrating broader scepticism among shareholders regarding the strategy’s effectiveness.
Kraft Heinz has faced pressure from rising inflation and the growing popularity of GLP-1 weight-loss drugs, which have contributed to reduced consumer spending and lower packaged-food consumption.
The pause on the breakup is notable given Cahillane’s history in leading the separation of Kellogg’s cereal and snacks divisions, which were later sold at high valuations to Ferrero and Mars Wrigley.
The company’s chairman, John T. Cahill, said management believes concentrating resources on growth rather than separation is the correct strategy at this stage.
TD Cowen analyst Robert Moskow warned investors that halting the split could be viewed negatively, suggesting the divisions are not yet strong enough to operate independently.
Earlier this year, Kraft Heinz Middle East and Africa unveiled an expanded range of Heinz products at Gulfood 2026 in Dubai under its “Better For You” portfolio, including Heinz Organic Tomato Ketchup, Vegan Mayo, Tomato Ketchup Zero, and reduced sugar and salt ketchup.
The new offerings are part of ongoing reformulation efforts in the region, aimed at maintaining familiar taste while adapting recipes to meet growing demand for organic, plant-based, and lower-sugar options.
Mary Gukasyan, Managing Director for the Middle East and Africa at Kraft Heinz, said the company is taking a nutrition-focused approach, introducing clearer ingredient labels and expanding zero-sugar and reduced-sugar options.
The expansion reflects rising interest in health-conscious foods across the Middle East and North Africa, where the plant-based market is valued at more than US$977 million and projected to grow around 19% annually.
Kraft Heinz MEA also announced initiatives to reduce plastic usage by redesigning packaging and working with regional partners to implement more sustainable production and distribution practices.
This combined focus on product reformulation, marketing investment, and sustainability is part of the company’s broader effort to adapt to changing consumer preferences and reverse declining sales.
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