Kraft Heinz Reportedly Plans $20B Grocery Brand Spinoff Undoing 2015 Merger

Kraft Heinz is considering a major corporate restructuring that could involve spinning off a substantial portion of its traditional grocery business, including iconic brands like Velveeta and Oscar Mayer, into a separate entity valued at up to $20 billion. This move would potentially unwind the 2015 merger between Kraft Foods and H.J. Heinz, a deal initially supported by Warren Buffett's Berkshire Hathaway but which has seen the company's market value decline by about two-thirds over the past decade. The spinoff aims to separate slower-growing legacy grocery brands from the more successful condiments and spreads division, which includes Heinz ketchup and Philadelphia cream cheese, in hopes of revitalizing growth and improving investor returns. The company has faced challenges from shifting consumer preferences toward healthier and more affordable options, increased competition from private-label brands, and social movements like Make America Healthy Again that criticize convenience foods like Lunchables. While the split could stimulate fresh growth, analysts caution that its success depends on attracting premium buyers and adapting to evolving market demands, with the overall impact on shareholder value still uncertain. This potential restructuring reflects broader challenges in the consumer packaged food industry amid changing American eating habits and increasing scrutiny of traditional processed foods.