Kraft Heinz Plans $20 Billion Grocery Business Spin-Off

Kraft Heinz is planning to spin off a significant portion of its grocery business, including many traditional Kraft products, into a separate company valued at up to $20 billion. This strategic move aims to separate slower-growing packaged foods like processed meats and meals from faster-growing categories such as dressings, sauces, and condiments, including Heinz Ketchup and Grey Poupon mustard, to better align with changing consumer preferences. The decision marks a reversal from the 2015 merger orchestrated by Warren Buffett's Berkshire Hathaway and 3G Capital, which initially sought efficiency and scale but faced challenges including a 60% stock drop and $15 billion in brand write-downs. Kraft Heinz has struggled with declining sales and profits as consumers shift toward fresher, less processed foods, prompting the company to halt new products with artificial colors and attempt divestitures. While the deal structure is still uncertain and may change, the spin-off is intended to unlock shareholder value amid an economic environment where consumers are more cautious with spending. Shares rose more than 2% following the announcement, reflecting investor optimism about the restructuring.