Kraft Heinz is making like a banana and splitting.
The condiment king announced this morning that it’s undoing its blockbuster merger of 2015 and dividing into two. One of the new companies will stick with grocery staples, featuring Oscar Mayer and Lunchables, while the other will focus on “taste elevation,” and encompass the Heinz, Philadelphia cream cheese, and Kraft Mac & Cheese brands.
The troubled giant has struggled lately, with shares down 15.27% in 2025. Management is hoping that two streamlined companies can execute a turnaround more effectively than one huge behemoth—though that may be easier said than done, analysts argue, as consumer tastes shift away from snack foods and toward healthy eating.
The un-deal is a blow to Warren Buffett, who helped organize the original merger. Berkshire Hathaway holds 27.5% of Kraft Heinz, making it the company’s largest shareholder, which is why the Oracle of Omaha expressed his "disappointment" with today’s announcement. Shares of Kraft Heinz dropped 6.97% this afternoon.
Hungry for returns
Mergers were once all the rage for consumer-facing food companies, but today’s news is just the latest in a series of breakups. Cereal giant Kellogg first kicked off the reverse-merger trend in 2023 by separating into two companies, and just last week we learned that beverage maker Keurig Dr. Pepper plans to undo its 2018 megamerger.
Making sense of market moves
Stay up to date on the latest market news with daily analysis of the investing landscape, served up Brew-style.
On top of that, the Wall Street Journal reported that activist investor Elliott Investment Management has amassed a $4 billion stake in PepsiCo in an effort to push the snack and beverage giant to make some huge changes, including refranchising the part of its operations involving bottling. PepsiCo’s stock is down 1.17% year to date, but the shift could boost shares by 50%, Elliott argued. The news pushed PepsiCo shares 1.1% higher today.
There’s a good reason for these big changes: The food industry has performed terribly in 2025. The S&P Food & Beverage Industry Index has sunk 0.09% this year, far underperforming the S&P 500’s gain of 9.08% over the same period. Big names like Conagra Brands, General Mills, and Hormel Foods have all fallen at least 20% year to date.
These snack giants are facing a slew of headwinds, including a consumer spending slowdown, sticky inflation, tariffs, and a growing number of Americans across the political spectrum rejecting unhealthy snack food. That’s why they’re trying every trick in the book to win back consumers, ranging from rolling out a giant box of Mac & Cheese to, well, completely overhauling their entire corporate structures.
Only time will tell which strategy ends up being more effective.—LB