Fix the Business. Then Split It.
- Julio Hernandez
- Apr 6
- 2 min read
Updated: Apr 7
Kraft Heinz just made one of the most honest calls in CPG in years. A new CEO arrived, looked at the foundation, and decided that no structural changes work for a business that hasn't stabilized. The rest of the industry is still asking itself the same question.
Six months ago, Kraft Heinz had a plan. Split into two independent publicly traded companies. Global Taste Elevation on one side, home to Heinz, Philadelphia, and Kraft Mac & Cheese. North American Grocery on the other hand, carries Oscar Mayer, Kraft Singles, and Lunchables.
Then the new CEO arrived. And tore up the playbook on day one.
Steve Cahillane, who took the helm on January 1 after leading Kellanova, was direct on his first earnings call. The organization was "not yet healthy enough to stand alone as two separate entities." Full-year 2025 net sales fell 3.5%, with nine consecutive quarters of declining revenue. Volume and mix dropped 4.1 percentage points in 2025. And the company's largest investor, Berkshire Hathaway, moved to exit its 27.5% stake.
Instead of spending an estimated $300 million in dis-synergy costs to execute the split, Cahillane announced a $600 million investment into the U.S. business. Marketing. Sales. R&D. Product superiority. Pricing. R&D investment alone will increase 20% in 2026. The pause is also expected to save Kraft Heinz $300 million in separation costs this year.
The split is not dead. It is conditional. Cahillane has left the door open, but only as a reward for performance. The separation happens when the business has earned it, not when the calendar demands it.
This Is Not an Isolated Case
Kraft Heinz's reversal did not happen in a vacuum. Across legacy CPG, the same forces are reshaping portfolios simultaneously.
Keurig Dr Pepper completed the acquisition of JDE Peet's, an $18 billion deal, and is now targeting a separation into two independent, U.S.-listed companies by the end of 2026. Nestlé is cutting 16,000 jobs through 2027 and narrowing its focus to four core categories: Coffee, Petcare, Nutrition, and Food & Snacks. General Mills divested its U.S. yogurt business, including Yoplait, Go-Gurt, and Oui, to Lactalis for $1.2 billion in annual revenue. Conagra Brands sold Chef Boyardee to Hometown Food Co. for $600 million.
The pattern is consistent. Portfolios assembled for a different era of growth, pricing power, and consumer behavior are being broken apart and reassembled around what actually works today.