The Kraft Heinz Company announced Feb. 11 it is pausing work on its planned separation into two independent companies, instead committing $600 million to accelerate growth efforts as the food manufacturer reported a 15 percent decline in full-year 2025 adjusted earnings.
CEO Steve Cahillane, who joined the Pittsburgh and Chicago-based company Jan. 1, said the company’s challenges require singular focus on operational execution rather than separation logistics.
“My No. 1 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. “As a result, we believe it is prudent to pause work related to the separation, and we will no longer incur related dis-synergies this year.”
The company reported fourth-quarter adjusted earnings per share of $0.67, exceeding analyst expectations of $0.61, while revenue of $6.35 billion fell slightly short of the $6.38 billion forecast. For full-year 2025, net sales decreased 3.5 percent to $24.9 billion, with organic net sales declining 3.4 percent.
September separation announcement
Kraft Heinz announced in September 2025 that its board unanimously approved a plan to separate into two independent publicly traded companies through a tax-free spinoff, with completion targeted for the second half of 2026.
The planned structure would have created Global Taste Elevation Company, housing sauces, spreads and shelf-stable meals including Heinz, Philadelphia and Kraft Mac & Cheese brands with about $15.4 billion in 2024 net sales. North American Grocery Company would have focused on staples including Oscar Mayer, Kraft Singles and Lunchables with about $10.4 billion in 2024 net sales.
Kraft Heinz anticipated up to $300 million in dis-synergies from the split. By pausing separation work, the company will avoid these costs and redirect resources to growth initiatives.
[RELATED: The Kraft Heinz Co. To Separate Into 2 Companies]
New investment strategy
The $600 million investment will target marketing, sales, research and development, product superiority initiatives and select pricing adjustments. The funds aim to accelerate the company’s Taste Elevation portfolio and recover U.S. retail business, where organic net sales declined 5.2 percent in 2025.
Research and development spending will increase about 20 percent in 2026 versus 2025, with innovation focused on nutrition, convenience and new occasions. Marketing investment will rise to about 5.5 percent of sales.
Product initiatives include Kraft Mac & Cheese Power Mac, positioned around higher protein and fiber with products expected on shelves in second-quarter 2026, and Heinz portfolio expansion.
“In order to accelerate the momentum we are already seeing in our Taste Elevation portfolio and to drive recovery in our U.S. business, we are today announcing a $600 million investment across marketing, sales and R&D as well as product superiority and select pricing,” Cahillane said.
“Thanks to disciplined financial stewardship, our balance sheet is strong and our free cash flow capabilities robust, positioning us well to fund these investments and execute on the plan while still generating excess cash.”
2026 outlook and board response
Kraft Heinz projects 2026 organic net sales to decline between 1.5 percent and 3.5 percent, including an approximate 100 basis point impact from incremental SNAP headwinds. Adjusted earnings per share are projected in a range of $1.98 to $2.10, down from 2025’s $2.60.
While investments will begin in first quarter 2026, management expects more meaningful top-line improvement in the second half of the year.
Despite earnings pressure, Kraft Heinz generated $3.7 billion in free cash flow for 2025, a 16 percent increase, and returned $2.3 billion to shareholders through dividends and share repurchases.
Board Chair John Cahill expressed confidence in Cahillane’s leadership and the decision to pause separation work.
“Kraft Heinz is already seeing the benefit of Steve’s deep industry experience and proven track record of building brands and leading large-scale transformations,” Cahill said. “From day one, he has brought a fresh, consumer-first perspective that we believe creates a clear glidepath back to profitable growth.”
Greg Abel, CEO of Berkshire Hathaway, which holds a 28 percent stake in Kraft Heinz, issued a statement supporting the pause decision.
“We support CEO Steve Cahillane and the Kraft Heinz Board of Directors’ decision, under Steve’s new leadership, to pause work on the company’s previously planned separation,” Abel said. “As a result, management can commit to strengthening Kraft Heinz’s ability to compete and serve customers.”