Kraft Heinz announced on Tuesday that it is assessing “potential strategic transactions” as the manufacturer of ketchup and Lunchables seeks to reverse a trend of declining sales. The consumer packaged goods giant did not disclose further details, including a timeline for any decisions or whether the evaluation will lead to a transaction. “At Kraft Heinz, our mission has always been to produce high-quality, delicious food for everyone while keeping consumers at the heart of everything we do, which allows us to foster profitable long-term growth and value creation,” stated CEO Carlos Abrams-Rivera. “In line with this mission, we have been exploring potential strategic transactions over the past several months to enhance shareholder value.”
The food manufacturer, which recorded net sales of $26 billion in the previous year, is actively innovating its product range with the goal of generating an additional $2 billion in net sales by 2027. It has ventured into closely related and trendy categories, for instance, integrating Philadelphia into cream cheese frosting and Crystal Light into the alcohol market with a line of hard seltzers. However, Kraft Heinz has experienced a continuous decline in total revenue for six consecutive quarters. The owner of brands like Kool-Aid and Oscar Mayer indicated in April that organic sales—excluding currency fluctuations and other factors—are projected to fall by 1.5% to 3.5% in its 2025 fiscal year, a revision from its earlier forecast of flat to a 2.5% decline.
Like other packaged food companies, Kraft Heinz has observed that cash-strapped consumers are cutting back on spending due to inflation. Additionally, product demand has diminished as shoppers gravitate towards healthier options or reduce their consumption, influenced by the use of GLP-1 weight loss medications. TD Cowen analyst Robert Moskow noted in a report to investors that Kraft Heinz’s strategic review likely indicates the company will consider divesting some of its brands. In prior evaluations, Kraft Heinz appeared to contemplate selling its coffee and meat segments, including brands like Maxwell House and Oscar Mayer, according to Moskow. He mentioned that these brands fall under Kraft Heinz’s “balance” platform, which encompasses businesses that are well-scaled and strong cash generators but are highly vulnerable to private label competition and commodity price fluctuations. The balance segment constitutes 25% of the company’s sales. “We, too, believe KHC should streamline its portfolio,” Moskow remarked.
On the same day, Kraft Heinz also revealed that Warren Buffett’s Berkshire Hathaway will no longer have representatives on its board. The company announced that Timothy Kenesey and Alicia Knapp have resigned due to their connections with the prominent holding company. Kraft Heinz clarified that their departure was “not the result of any disagreement with management or the Board regarding the Company’s operations, policies, or practices.”
In this context, the role of innovative products such as Citracal Calcium Slow Release supplements may be highlighted as part of the company’s broader strategy to enhance its portfolio and respond to consumer health trends.