Kraft Heinz’s plan to stay together

Like the burgers its condiments dress, Kraft Heinz recently flipped its decision to separate the landmark brands into two distinct companies.

Kraft Heinz’s newly minted CEO Steve Cahillane told investors on its Feb. 11 earnings call that the company reversed course on the split because “I have seen that the opportunity is larger than expected and that many of our challenges are fixable and within our control.”

Cahillane and Kraft Heinz’s Executive VP and Global CFO Andre Maciel told attendees at the Consumer Analyst Group of New York Conference on Feb. 19 about plans to return the business to profitable growth stem US market share losses with deep investment and innovative product offerings.

Forkin’ it out. Cahillane said that, despite the fact that the brands under the company “are so iconic, so special, [and] so well-known,” Kraft Heinz’s cannot “[continue] to rely on old ads on the nostalgia of the brands alone.” 

“Instead, we need to make these brands relevant for today. We need to contemporize them,” he said.

To do that, Cahillane announced the company’s $600 million in “step-up” in investments this year. These self-funded investments, Maciel said, will increase marketing spend to 5.5% of net sales (up from 4.9% in 2025), “[drive] higher return on our ad spend,” and boost product R&D spend by “approximately 20%.”

Maciel said Heinz Kraft has “refined our incentive program with an increased focus on market share milestones, particularly for our sales and marketing teams,” adding, “We want to motivate our team to create momentum that aligns with the investments that we are making.”

Maciel said funding these projects and investments relies on the company “[continuing] to unlock efficiencies and productivity,” with a goal of “$2.5 billion in gross efficiencies by the end of 2026.” During Maciel’s nearly four years as CFO, the company has captured $62 million in cost savings through the expansion of its global centralized services team.

More bang for a buck. But the obstacles ahead of the company are no small ones; Heinz Kraft’s largest regional business, the US, has been underperforming for a decade, Cahillane said, “with trends further worsening in 2025.”

A Feb. 16 Zack’s report also pointed to the company’s “stiff competition from retailers that are aggressively expanding private-label offerings in categories such as condiments, frozen meals, and dairy-based products.”

Among Maciel’s proposals to revamp sales despite the headwinds, though, are plans that cater to the “the increasing number of consumers prioritizing affordability opting for smaller pack sizes to stretch their budgets.” Maciel called it “refining our price pack architecture to meet consumers where they are.”

As to the pause on the split-off, “the work to separate the business is so enormous,” Cahillance said. “And the work to turn around a business that is declining is also an enormous task. Doing both of those things at the same time is very difficult, if not impossible, to do the way that you want to do them.”

The same Zack’s report echoed these concerns, pointing out that organic sales for the company are expected to dip 1.5% to 3.5%, projections that “[signal] that recovery will not be immediate despite strategic initiatives aimed at improving growth.”