Kraft Heinz Eyes Spinoff as It Unwinds 2015 Megamerger

The food company Kraft Heinz is evaluating a brand separation plan which would divide its legacy grocery products including Velveeta to restore some value from its 2015 merger failure and generate $20 billion for shareholders.

The food company investigates establishing a new business entity to manage its packaged food products with declining market performance. The strategic change represents the biggest shift at Kraft Heinz since its creation through the merger which Warren Buffett's Berkshire Hathaway supported.

The merged company has faced continuous difficulties since its inception because cost reduction efforts failed to boost sales which resulted in stock price decline by two-thirds. The company faces dual challenges because processed food sales decline while public health organizations scrutinize its products.

The company's executives have demonstrated their willingness to consider selling off certain assets. The company announced in May that it would assess strategic transactions to boost shareholder value after Berkshire Hathaway's board representatives left the company indicating decreased support from its previous supporter.

Kraft Heinz faces declining U.S. packaged food sales while consumers reject Lunchables and other products because of the national healthy-eating movement led by Health Secretary Robert F. Kennedy Jr.

The planned spinoff represents the biggest consumer goods sector deal of 2024 because multinational companies continue to focus on streamlining their operations.