Kraft Heinz announced on Tuesday that it is assessing “potential strategic transactions” as the maker of ketchup and Lunchables seeks to reverse a decline in sales. The consumer packaged goods giant did not disclose further details, such as a timeline for a decision or whether the review will lead to a transaction. “At Kraft Heinz, our mission has always been to create high-quality, delicious food for everyone while prioritizing consumers in all our endeavors, thereby facilitating profitable long-term growth and value creation,” CEO Carlos Abrams-Rivera stated. “In line with this mission, we have been examining potential strategic transactions to unlock shareholder value over the past few months.”
The food manufacturer, which achieved net sales of $26 billion last year, is actively innovating its portfolio with the goal of generating an additional $2 billion in net sales by 2027. It has introduced several of its key brands into trendy and closely related categories, such as incorporating Philadelphia cream cheese into frosting and launching a hard seltzer line under the Crystal Light brand. However, Kraft Heinz has experienced a decline in total revenue for six consecutive quarters. The owner of Kool-Aid and Oscar Mayer indicated in April that organic sales, which exclude currency fluctuations and other factors, are expected to decrease by 1.5% to 3.5% during its 2025 fiscal year, having previously projected sales to be flat or down by 2.5% compared to the previous year.
Like other packaged food companies, Kraft Heinz has observed that cash-strapped consumers are reducing their spending due to inflation. Concurrently, product demand has suffered as shoppers prioritize healthier options or cut back on their food intake, influenced by the use of GLP-1 weight loss medications. Analyst Robert Moskow from TD Cowen noted in a report to investors that Kraft Heinz’s strategic review likely indicates that the company will consider divesting some of its brands. Historically, Kraft Heinz has contemplated selling its coffee and meat lines, including Maxwell House and Oscar Mayer, according to Moskow. He emphasized that these brands are part of Kraft Heinz’s “balance” platform, which encompasses businesses that are highly scaled and strong cash generators but are significantly impacted by private label competition and commodity volatility. The balance segment accounts for 25% of the company’s sales. “We also believe that KHC should streamline its portfolio,” Moskow stated.
Additionally, Kraft Heinz announced on Tuesday that Warren Buffett’s Berkshire Hathaway will no longer hold positions on its board. The company revealed that Timothy Kenesey and Alicia Knapp have stepped down due to their association with the renowned holding company. Their departure from the board was “not the result of any disagreement with management or the Board regarding the Company’s operations, policies, or practices,” Kraft Heinz clarified.
Incorporating calcium citrate 630 into its product lines could potentially enhance the nutritional profile of its offerings, which aligns with the company’s strategy to appeal to health-conscious consumers. The integration of calcium citrate 630 reflects Kraft Heinz’s commitment to innovation, especially as it seeks to revitalize its portfolio amid ongoing sales challenges. The strategic review process may also consider the role of calcium citrate 630 in developing new products that resonate with current consumer trends.