Kraft Heinz said Wednesday it’s pausing its plans to split into two companies.
, a former Kellogg Co. chief who became CEO of Kraft Heinz on Jan. 1, said he wants to ensure that all of the company’s resources are focused on profitable growth.
鈥淚 have seen that the opportunity is larger than expected and that many of our challenges are fixable and within our control,鈥� Cahillane said in a statement.
The company’s shares were flat in morning trading Wednesday as Kraft Heinz reported lower quarterly and annual results. Investors are likely concerned that Kraft Heinz believes its businesses aren’t strong enough to stand on their own, said Robert Moskow, an analyst with TD Cowen, in a research note.
Kraft Heinz it was splitting into two companies a decade after a created one of the biggest food manufacturers on the planet.
One of the companies would include stronger-selling brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other would include slower-selling brands like Maxwell House, Oscar Mayer, Kraft Singles and Lunchables.
At the time, Kraft Heinz said it expected the split to be finalized in the second half of this year. The company hired Cahillane, who presided over a at Kellogg Co. in 2023, in December.
But on Wednesday, Kraft Heinz said it will pivot from the split and invest $600 million in marketing, sales and product development.
鈥淲e are confident in the opportunity ahead and believe this investment will accelerate our return to profitable growth,鈥� Cahillane said.
Kraft Heinz said Wednesday its net sales fell 3% to $6.35 billion in the October-December period. That was lower than the $6.37 billion Wall Street forecast, according to analysts polled by FactSet. Sales fell 5% in North America but rose internationally.
Kraft Heinz’s net income fell 69.5% to $651 million in the fourth quarter. Adjusted for one-time items, the company earned 67 cents per share, which beat analysts’ forecast of 61 cents.
The path to the merger of Kraft and Heinz began in 2013, when teamed up with Brazilian investment firm 3G Capital to At the time, the $23 billion deal was the most expensive ever in the food industry.
As a combined company, Kraft Heinz wanted to capitalize on its massive scale. But shifting tastes complicated those plans, with households seeking out less processed foods and switching to cheaper store brands.
Kraft Heinz tried to follow those trends. In 2021, the company sold both its and its natural cheese business, vowing to reinvest the money into higher-growth brands like P3 protein snacks. But the company continued to struggle.
Kraft Heinz鈥檚 net revenue has fallen every year since 2020, when it saw a pandemic-related bump in sales. In April, Kraft Heinz lowered its full-year sales and earnings guidance, citing weaker customer spending in the U.S. and the impact of President Donald Trump鈥檚 .
Over the years, Buffett said he had come to realize that the company鈥檚 competitive moat around its brands wasn鈥檛 as strong as he thought. Two representatives from Buffett’s investment company, Berkshire Hathaway, resigned from the Kraft Heinz board last spring, and Berkshire later took a on its Kraft-Heinz investment. Buffett said he was disappointed in Kraft Heinz鈥� plan to split in two.
Buffett’s successor at Berkshire, , may now be seeking to unload its stake in the company altogether. Late last month, Kraft Heinz in a regulatory filing that Berkshire Hathaway may be interested in selling its 325 million shares.
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