Kraft Heinz said Wednesday it’s pausing a planned split and launching a $600 million investment campaign to tackle what new CEO Steve Callihane called “fixable” challenges.
The company announced in September it will divide its roughly 200 brands into one firm focused on high-performing sauces and spreads and another made up of less lucrative labels.
Cahillane’s optimism was juxtaposed with some tough financial results for the company, which is dual headquartered in Pittsburgh and Chicago.
Kraft Heinz took a $4.7 billion operating loss last year, compared to a $1.7 billion operating gain in 2024. Sales fell by 3.5% last year as international growth failed to make up for declining consumer interest in North America.
Still, Cahillane says the opportunity for a turnaround is larger than he expected when he took the top job at Kraft Heinz in January. It’s a somewhat unexpected shift for the executive who steered Kellogg’s through its 2023 breakup into separate cereal and snack food companies.
“My number one priority is returning the business to profitable growth, which will require ensuring all resources are fully focused on the execution of our operating plan,” Cahillane said in a statement.
Part of his strategy is to spend $600 million on marketing, sales and research and development as well as “product superiority and select pricing.”
The proposed split was an admission the $23 billion marriage of Kraft and Heinz in 2015 had failed to produce anticipated growth.
Instead, sales have continued to slide along with the company’s stock price, which is down 19% in the past year.
Warren Buffett, who masterminded the merger as head of Berkshire Hathaway, previously expressed disappointment in the breakup plans. The massive holding company has since moved to unwind its 28% stake in Kraft Heinz.