US multinational food company Kraft Heinz has halted plans to split the company, Reuters reported.
New CEO Steve Cahillane said the move was necessary due to current market conditions in the food industry, while adding the challenges were “fixable and within our control”, the 11 February report said.
Formed by the merger of Kraft Foods Group and the HJ Heinz Company in 2015, Kraft Heinz’s portfolio includes leading brands such as Heinz ketchup, Lea & Perrins Worcestershire sauce and Philadelphia cream cheese.
Many Kraft Heinz products contain oils and fats, either as core ingredients or for texture, flavour and shelf stability.
When first announcing plans on 2 September to split into two separate companies – one focused on sauces and spreads and the other on grocery staples and ready-to-eat meals – the company said the move was aimed at maximising its capabilities and brands while reducing complexity.
However, since then, the company had lost out to rivals, with Cahillane quoted as saying recent price hikes had led consumers to seek out lower cost alternatives.
“Faced with the choice of continuing the separation and all the work that’s required there, or shifting all resources against growing the business and the early opportunities that I saw, it became very compelling that we ought to pause the separation,” Cahillane told Reuters in an interview.
While not ruling out the possibility of a split in the future, Cahillane said there was no end date for the pause, which was expected to save the company US$300M in costs in 2026.
Kraft Heinz had expected to close the spinoff at the end of 2026 and had brought in former Kellogg boss Cahillane in January to guide it through the split, Reuters wrote.
Cahillane had also outlined his strategy to restore the company to profitable growth, the report said.
He said Kraft Heinz would focus on marketing and research with a US$600M investment to drive recovery in its US business, where market conditions had worsened since the decision to split last summer.
Kraft Heinz, like other packaged foods companies, has been struggling with weak demand for its condiments and other product staples as consumers look for cheaper options, according to the report.
In its fourth quarter and full year 2025 results published on 11 February, Kraft Heinz reported a 3.5% drop in net sales in 2025 to US$24.9bn compared to US$25.8bn the previous year, and a 3.4% decrease in net sales in the fourth quarter of 2025 to US$6.4bn.
The company also announced its 2026 operating plan, and Cahillane said the company would be increasing investments in R&D by approximately 20% in 2026 compared to 2025, adding that product innovation would also cover nutrition and value.
Speaking about the decision to halt the company’s split, John T Cahill, chair of Kraft Heinz’s Board, said: “We are confident that our decision to pause the work related to the separation and fully focusing our resources in [the] service of growth is the right move at this time.”
