Kraft Heinz is weighing up “strategic transactions to unlock shareholder value”, the US food major has announced.
In a brief statement, the Heinz ketchup and Jell-O desserts owner said yesterday (20 May) the deliberations had been going on for months.
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“At Kraft Heinz, our goal has always been to make high-quality, great-tasting food for all and to keep consumers at the forefront of all we do, enabling us to drive profitable long-term growth and value creation,” Kraft Heinz CEO Carlos Abrams-Rivera said. “Consistent with this goal, over the past several months we have been evaluating potential strategic transactions to unlock shareholder value. As we look to the future, we will continue to inspire and delight consumers with our iconic brands, fulfilling our mission.”
Last year, Kraft Heinz generated a net income of $2.74bn, down from the $2.86bn booked for 2023.
However, the company reported a 63.2% slump in full-year operating profit to $1.7bn, which was linked to $3.7bn in non-cash impairment losses. Some $1.4bn of the impairment losses were booked in the last quarter and were “largely due to an intangible asset impairment on the Oscar Mayer brand”, Kraft Heinz said at the time.
Reported sales were down 3% at $25.85bn, with organic growth dropping 2.1%. When Kraft Heinz booked the results, Abrams-Rivera described 2024 as “a challenging year with our top-line results coming in below our expectations” but he sought to accentuate the positive by adding: “We remained disciplined in protecting profitability, while driving industry-leading margins, generating strong cash flow, and returning $2.7bn in capital to stockholders.”
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By GlobalDataLast month, Kraft Heinz said its net sales dropped 6.4% on a reported basis in the first quarter of 2025 and declined 4.7% in organic terms to just shy of $7bn. In the three months to 29 March, operating income decreased 8.1% to $1.2bn. Net income stood at $712m versus $801m a year earlier.
Alongside the first-quarter numbers, Kraft Heinz also cut its 2025 outlook across a range of metrics to factor in the potential upward pressure on input-cost inflation from changes in tariffs.
“There can be no assurance that the company’s assessment process will result in any transaction, or any assurance as to its outcome or timing,” Kraft Heinz said in its statement yesterday.
“The company has not set a timetable for completion of this process and does not intend to make any further announcements regarding the process unless and until it determines that further disclosure is appropriate or necessary.”
However, Kraft Heinz’s announcement sparked speculation among Wall Street analysts about the different options the company could consider.
“This sounds as though it could be a wide-ranging consideration of a broad range of options, not simply a tinkering around the edges of possible small-scale divestments,” Bernstein analyst Alexia Howard said. “At a minimum, we’d expect further disposals of some of the more troubled parts of the portfolio. A larger idea could be to spin-off the faster-growing legacy Heinz business.”
Robert Moskow, an analyst covering Kraft Heinz at investment bank TD Cowen, added: “Our understanding is that the company has considered selling coffee and meats in the past. It is unclear at this time whether today’s announcement marks an acceleration in these efforts.”
In February, it emerged Kraft Heinz had hired advisers to work on the potential sale of Italy-based baby-food business Plasmon.
Last year, The Wall Street Journal and Reuters said the company was exploring a sale of its Oscar Mayer meat-products business.
In 2019, it was reported Kraft Heinz was trying to sell its Maxwell House coffee brand but struggling because of what appeared to be an inflated price tag.
Kraft Heinz also said yesterday representatives of Berkshire Hathaway, the investment vehicle owned by Warren Buffett, were stepping down from the company’s board. Berkshire Hathaway owns just over 27% of Kraft Heinz.
The group said the departures “are not the result of any disagreement with management or the board related to the company’s operations, policies or practices”.
