Kraft Heinz Brings In Steve Cahillane to Steer Planned Breakup

Key Moments

Leadership Shake-Up Ahead of Corporate Split

Dec 16 (Reuters) – Kraft Heinz has appointed Steve Cahillane, the former head of Kellogg, as its new chief executive officer, assigning him the task of guiding the packaged food company through its previously announced breakup into two separate, publicly traded entities.

The board selected Cahillane, 60, to take over the top role starting January 1. He will replace Carlos Abrams-Rivera, who will remain with the company as an advisor until March 6.

Abrams-Rivera, who became CEO in 2024, had been identified to lead the grocery-focused business after the separation, which Kraft Heinz expects to complete by the second half of 2026. The company said on Tuesday that its board will now start a fresh search for a CEO for that grocery unit.

Strategy: Two Focused Food Businesses

In September, Kraft Heinz decided to divide its operations into two distinct companies. One will concentrate on condiments and sauces such as Heinz ketchup and Kraft Mac & Cheese. The other will center on grocery brands, including hot dog producer Oscar Mayer and Lunchables.

The stated goal of the breakup is to simplify operations and sharpen strategic focus for each business at a time when elevated inflation and economic uncertainty are weighing on consumer demand.

Under the planned structure, Cahillane is slated to lead the sauces and spreads company after the separation. That division generated approximately $15.4 billion in sales in 2024, according to the company.

The second company, which will house processed foods and ready-meal brands, recorded about $10.4 billion in annual sales.

Market Reaction and Valuation Snapshot

Kraft Heinz shares have lost roughly 75% of their value since peaking at $97.77 in 2017. Since the September announcement of the breakup, the stock has fallen about 12%. Ahead of Tuesday’s market open, the shares were trading about 1% higher.

In October, Kraft Heinz reduced its full-year sales and profit guidance, citing continued consumer trading down to lower-priced private label alternatives.

Cahillane’s Track Record and Deal Speculation

Cahillane joins Kraft Heinz after overseeing a major separation at Kellogg in 2023. He led Kellanova, the resulting global snacking company, until it was acquired by Mars in a transaction valued at about $36 billion last year. His background also includes roles at Coca-Cola and AB InBev.

“I’ve devoted my entire career to building brands, and the opportunity to do the same with Kraft Heinz’s iconic portfolio is a dream come true,” Cahillane said.

Analyst commentary has already begun to focus on potential implications for deals involving the sauces business. Jefferies analyst Scott Marks wrote, “This move further fans investor speculation about Taste Elevation (the sauces unit) being a potential deal target.”