Ketchup maker Heinz refuses to split business into two companies

Kraft Heinz, the maker of Heinz ketchup and Kraft cheese, has halted plans to split the business into two divisions by 2026. The company plans to increase spending on new product development by 20% and review its pricing policy for consumers, Reuters reported.

New CEO Steve Cahillaine, who took office in January, said: “My top priority is to return the business to profitable growth, which will require a full focus on executing our operating plan. We believe it is appropriate to suspend the work related to the separation,” Cahillaine said, adding that “most of the issues can be resolved and are within our control.”

The decision will avoid additional costs of $300 million related to the dyssynergy process in 2026.

Kraft Heinz shares fell 6% after the decision was announced. Market analysts, including Andrew Lazard of Barclays, note: “We clearly see the plan for more significant reinvestment and the suspension of the planned separation as the right set of first steps, but we understand that reversing the trend of long-term market share decline is likely to take some time.”

An additional factor of pressure on the shares was information about the possible exit of Berkshire Hathaway from the shareholders (share 27.5%).

To overcome weak demand and the outflow of customers to cheaper analogues, Kraft Heinz is implementing the following steps:

• investing $ 600 million to stimulate business in the US;
• increasing the budget for research and development (R&D) of new products by 20% in 2026;
• introducing more affordable prices for consumers.

According to KPMG, the rejection of the separation of Kraft Heinz is rare for the corporate sector, as only one in ten companies usually cancel the separation of divisions that have already been announced.

About Kraft Heinz

Kraft Heinz is an American food company formed in 2015 by the merger of Kraft Foods and Heinz. It is the third-largest food and beverage company in North America and the fifth-largest in the world with annual revenue of over $26 billion as of 2018.

In addition to the Kraft and Heinz brands, the company also owns over 20 other brands, including Boca Burger, Gevalia coffee, Grey Poupon, That’s Good!, Oscar Mayer and others. The manufacturer ranked 114th on the Fortune 500 list of the largest US corporations in 2018 by total revenue.

As a reminder, on September 2, 2025, Kraft Heinz announced plans to split its business into two separate companies. The decision would undo a deal made about a decade ago that created one of the largest packaged food sellers in the world.

Tags: Heinz, кетчуп