• by Tanya Gazdik , July 22, 2025

Changing consumer tastes, among other factors, have hampered the decade-old Kraft Heinz merger.

“The company is planning to spin off a large chunk of its grocery business, including many Kraft products, into a new entity that could be valued at as much as $20 billion on its own, according to people familiar with the matter,” reports The Wall Street Journal. “A split could be finalized in the coming weeks, the people said. However, Kraft Heinz has discussed other scenarios with its advisers and its board hasn’t signed off on a final decision, they cautioned. The company is also still working through exactly which brands would be part of the spun-out entity, the people said.”

The likely failure is a cautionary tale for other companies considering similar ventures.

“As with so many deals, Kraft Heinz promised much more than the savings that come from eliminating duplicate head offices and better buying power for things like office stationery,” according to Bloomberg. “The primary problem for the legacy food giants isn’t profitability but the challenge of responding to changing consumer tastes. This requires more than repackaging existing products, or substituting ingredients with substances that can be labeled ‘natural.’ And when it comes to innovation, scale can be a hindrance.”

Some of the problems the merger has faced could not have been predicted in 2015, like a global pandemic. 

“U.S. consumers have been spending less on increasingly expensive name-brand packaged food after the pandemic,” according to Reuters. “In addition, Kraft Heinz's convenience-oriented products like its Lunchables meal kit face scrutiny in the United States, its biggest market, amid the rise of the Make America Healthy Again or MAHA social movement led by U.S. Health Secretary Robert F. Kennedy Jr.”

Protein has become a focus among consumers, and Kraft Heinz is fine-tuning its messaging around its existing product lines, notes CNBC. 

“Now we’re going to be highlighting the amount of protein that families can get from real food rather than from powders,” said Kraft Heinz CEO Carlos Abrams-Rivera at the Deutsche Bank Consumer Conference last month.

One of the fallouts of a “conscious uncoupling” will be the marketing and advertising departments, notes Marketing Brew. 

The splitting of the company will likely take years to be fully fleshed out, but brand consultants and ad agency execs told Marketing Brew that “the move stands to play a major role in the futures of the vast portfolio of CPG brands, as well as affect their approaches to advertising under new corporate structures.” ]