Kraft Heinz has decided to pause its plans to divide the company, citing challenging conditions in the food industry. The new CEO, Steve Cahillane, acknowledged the difficulties but expressed confidence in resolving them. The company initially announced intentions to split into two separate entities, one focusing on groceries and the other on sauces and spreads, following a merger a decade ago led by Warren Buffett’s Berkshire Hathaway and 3G Capital.
Cahillane attributed the company’s recent struggles to losing ground to competitors, partly due to significant price increases that deterred consumers seeking healthier and more affordable options. Despite a brief decline in shares, the decision to halt the separation was made to redirect resources towards business growth opportunities.
While not ruling out a future split, Cahillane emphasized that the pause had no set timeline and is anticipated to save $300 million in costs in 2026. The company had originally aimed to finalize the split by the end of 2026, with Cahillane brought in to oversee the process. Analysts noted that postponing the separation highlighted deeper underlying issues within the company.
Kraft Heinz’s move to delay the split is rare, as corporate spinoffs are typically only canceled in about one out of ten cases. Additionally, in a prior announcement, Berkshire Hathaway indicated a potential sale of its stake in Kraft Heinz, a move disapproved by Buffett.
To address the challenges, Cahillane outlined a strategy focusing on marketing, research, and a $600 million investment to revitalize the U.S. business. The company aims to combat declining demand and regain market share lost to competitors through product innovation and enhanced customer service.
Despite reporting fourth-quarter results below expectations and a cautious 2026 earnings forecast, Cahillane remains optimistic about the future. He highlighted a 20% increase in research and development investments to drive innovation and value for consumers, acknowledging the need to deliver added benefits to justify higher prices for its products.