Kraft Heinz is preparing to break itself up in what could be its most significant restructuring since the company’s formation in 2015, The Wall Street Journal reported on Friday.
Nearly a decade after the blockbuster merger between Kraft and Heinz—engineered by Warren Buffett’s Berkshire Hathaway and private equity firm 3G Capital—the packaged foods giant is now exploring plans to spin off a major chunk of its grocery business, the WSJ report said.
People familiar with the matter cited by the publication said the company is weighing a separation that would result in two distinct entities: one housing traditional Kraft-branded grocery staples such as processed cheese, cold cuts, and boxed dinners, and another retaining higher-growth segments like condiments, dressings, and international sauces, including its iconic Heinz ketchup and Grey Poupon mustard.
The proposed grocery spin-off could be valued at as much as $20 billion, and the company is hoping that a breakup would unlock greater shareholder value than its current $31 billion market capitalization suggests.
The move comes amid persistent pressure to align with changing consumer preferences, which have increasingly shifted away from processed foods toward fresher, more premium offerings.
Investors respond positively to news
Kraft Heinz has not made a final decision, and sources caution that other options remain under discussion with advisers.
The board has yet to approve the spin-off plan, and key details—such as the exact brand portfolio of the new entity—are still being determined.
The company’s stock rose 3.4% in intraday trading after news of the potential breakup surfaced, reflecting investor optimism about a leaner, more focused Kraft Heinz.
However, soon after, it gave up some of the gains and was trading higher by 2.09% at 1:55 pm.
A spokesperson for the company confirmed that Kraft Heinz has been “evaluating potential strategic transactions to unlock shareholder value,” a process that was first publicly disclosed in May.
Any formal announcement could come in the weeks ahead.
Sale of Italian baby food unit aligns with portfolio shift
The restructuring discussion comes on the heels of another strategic move: the sale of Kraft Heinz’s Italian infant and specialty nutrition businesses, including the well-known Plasmon brand, to Italian food group NewPrinces.
The deal, valued at €120 million ($140.7 million), includes other smaller brands and a manufacturing plant in Italy.
The business generated €170 million in revenue last year, with a core profit of €17 million.
Plasmon, best known for its baby biscuits, remains a household name in Italy but has seen its market potential shrink amid the country’s falling birth rates.
The divestiture underscores Kraft Heinz’s broader effort to focus on core growth areas while exiting categories with structural demographic headwinds.
The deal is expected to close by late 2025, subject to regulatory approvals.
Kraft Heinz is scheduled to release its second-quarter 2025 earnings on July 30, where investors and analysts will look for further clarity on the potential split and the company’s forward strategy.
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