Kraft Heinz plans US$950M capital spending in 2026
Kraft Heinz expects to save US$300 million in costs this year by pausing the split while increasing overall investment.
USA – Kraft Heinz said that it plans to spend around US$950 million on capital expenditures in 2026, up from US$801 million last year.
The announcement followed the company’s decision on Wednesday to pause its efforts to split into two separate businesses, citing deteriorating conditions in the food industry.
CEO Steve Cahillane described the challenges facing Kraft Heinz as manageable and within the company’s control, leaving open the possibility of a later split.
The company said it will allocate US$600 million to marketing, sales, research and development, and product quality improvements to support recovery in its U.S. business, which has struggled with weak demand.
Kraft Heinz initially proposed a split last September, planning to create one company for groceries and another for sauces and spreads, after a decade of slower-than-expected growth following the merger that formed the company.
Shares of Kraft Heinz fell about 1% in premarket trading following the announcement, reflecting investor caution over the company’s strategy.
As part of cost-cutting efforts, the company expects to reduce approximately 60 positions by December 27, mostly outside the U.S. and Canada, following the elimination of roughly 600 jobs last year.
Earlier reports indicated that the pause on the separation is designed to redirect focus toward improving core operations rather than creating two independent units.
Cahillane, who became CEO on January 1, emphasized that his immediate goal is to return the company to profitable growth, with particular attention on flagship products like Heinz ketchup and Philadelphia cream cheese.
The planned split would have separated the sauces-and-spreads business from the grocery-staples segment, which includes products such as Oscar Mayer meats, Kraft Singles, and Lunchables, but investors questioned whether it would address underlying declines in processed food sales.
Investor Warren Buffett publicly expressed disappointment in the proposed split, reflecting wider shareholder skepticism about its potential effectiveness in reversing the company’s challenges.
Kraft Heinz faces headwinds from rising inflation and the growing popularity of GLP-1 weight-loss medications, which have reduced consumer spending on packaged foods.
The company also indicated that it may consider price adjustments to drive sales as part of a broader effort to stabilize revenue and strengthen its U.S. business operations.
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