Kraft Heinz Pauses Split, New CEO Calls Problems ‘Fixable’

Kraft Heinz halts its planned separation, with new CEO Steve Cahillane prioritizing a $600M investment in marketing and R&D to return the business to profitable growth.

Kraft Heinz has abruptly paused its plan to split into two separate companies, a dramatic reversal new CEO Steve Cahillane said was driven by deteriorating market conditions and a compelling need to focus entirely on fixing the business. The packaged-food giant announced in September it would separate its stronger condiment brands from struggling grocery labels, but Cahillane who took the helm January 1 called off the effort just weeks into his tenure.

“I have seen that the opportunity is larger than expected and that many of our challenges are fixable and within our control,” Cahillane said. The decision saves the company $300 million in separation costs this year and frees resources for a $600 million investment in marketing, sales, and product development aimed at reversing years of market share losses.

The move follows four consecutive years of declining revenue and a brutal fourth quarter where net sales fell 3% to $6.35 billion and net income plunged nearly 70%. Analysts outlook say the weakness has spread beyond legacy grocery brands into formerly resilient categories like condiments, making a spinoff untenable.

Cahillane acknowledged the company “busted through four or five levels of price points” without delivering added value, alienating inflation-weary consumers now flocking to cheaper private labels. The turnaround plan includes a 20% R&D increase focused on nutrition and convenience, selective price reductions, and boosting marketing spend to 5.5% of sales.

Berkshire Hathaway, which holds a 27.5% stake and CEO Greg Abel had publicly disapproved of the split, threw its weight behind the pause. Analysts warn 2026 will remain a “reinvestment year” with earnings expected well below consensus, but view the strategy as a necessary first step after a decade of post-merger struggles.