Kraft Heinz says it will divide into two publicly listed companies, restructuring to focus separately on sauces and groceries. The split will create Global Taste Elevation Co., which will house Heinz, Philadelphia, and Kraft Mac & Cheese, and North American Grocery Co., which will include Oscar Mayer, Kraft Singles, and Lunchables.
In 2024, the sauces arm generated about $15.4 billion in sales, while the grocery business brought in roughly $10.4 billion. Kraft Heinz’s leadership says the current, combined structure makes it difficult to allocate capital efficiently, prioritize initiatives, and scale in its strongest growth areas. The company expects a tax-free spin-off to close in the second half of 2026.
The move comes as Kraft Heinz, like many packaged-food makers, faces slowing growth amid shifting consumer preferences toward healthier and more affordable condiments and snacks. After flagging potential mergers and acquisitions in May to shore up value for shareholders, the company’s stock traded about 1% higher in premarket trading, though it has fallen about 21% over the past year.
What to watch next: the two new firms will operate as independent entities, each pursuing its own strategic priorities and capital allocation. The spin-off will be tax-free for shareholders and designed to unlock value by allowing each business to tailor investments and growth strategies to its specific market dynamics.
Summary: Kraft Heinz plans a tax-free split into two focused units—Global Taste Elevation Co. for sauces and North American Grocery Co. for groceries—targeting a clearer path to growth and capital efficiency. The move signals a broader trend of large consumer brands pursuing pure-play structures to appeal to different investor audiences and optimize operations, with a planned close in late 2026. Positive outlook: the separation could sharpen focus on core brands and enable more agile investment in innovation and market expansion.