Kraft Heinz’s Potential Demerger: What It Means for FMCG in Europe and Beyond

Kraft Heinz is reportedly preparing to split into two independent companies — a move that could reshape not just the company but the entire FMCG landscape in the UK, Europe, and globally. Could this unlock the value that Kraft Heinz has struggled to deliver since its megamerger a decade ago? And what lessons can other FMCG players take from this chapter in Big Food history?

Disclaimer: Kraft Heinz is a client of Accuris.

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Why Is Kraft Heinz Considering a Demerger?

When Berkshire Hathaway and 3G Capital orchestrated the Kraft and Heinz merger in 2015, it was hailed as transformative: the fifth-largest food and beverage company in the world, iconic brands, massive cost savings, and global reach. But while margins improved, innovation lagged and consumer tastes shifted toward fresher, healthier, and more differentiated options. By 2019, Kraft Heinz had written down $15 billion in goodwill, its stock had fallen over 60%, and brand relevance was waning.

Fast forward to 2025: Kraft Heinz is signalling a major pivot, reportedly preparing to spin off much of its grocery business — notably many Kraft-branded staples — into a separate company. The remaining business would centre on Heinz’s faster-growing condiments and sauces.

What Would the Future Standalone Companies Look Like?

On one side: a ‘Heinz’ company focused on condiments, sauces, dressings, and flavour enhancers — categories aligned with trends toward bold, international, and healthier flavours. Globally recognisable and scalable, it would house brands like Heinz ketchup, Grey Poupon, HP Sauce, and Primal Kitchen.

On the other: a ‘Kraft’ company focused on grocery staples like Kraft Mac & Cheese, Oscar Mayer meats, Maxwell House, and Capri Sun — mature brands with limited growth but strong cash flows.

Each could pursue a tailored strategy: the condiments business investing in innovation and international growth; the grocery business focusing on efficiency and brand renovation to preserve cash flow and possibly position itself as an attractive acquisition target.

Implications for the FMCG Industry

Globally, the move reflects a broader trend: investors value focused, nimble companies with a clear growth story. For Europe, the implications could be significant. The Heinz-focused condiments company could double down on European innovation — launching sugar-reduced ketchup, plant-based mayonnaises, and ethnic sauces to meet local tastes and regulations. The grocery spin-off’s impact in Europe would likely be muted, apart from Philadelphia cream cheese, one of its few globally strong brands.

For retailers and competitors in Europe, a more agile Heinz could intensify competitive pressure in condiments, possibly through acquisitions in niche premium segments. Meanwhile, the Kraft grocery spin-off could become a takeover target itself — with potential suitors such as Post Holdings or Ferrero.

Could the Demerged Companies Become Takeover Targets?

The grocery spin-off’s stable cash flow could appeal to private equity or strategic buyers, including Hormel, Post, or even Nestlé. Meanwhile, the condiments company could itself acquire to consolidate the sauces category — or become attractive to global players like Unilever seeking to expand in flavour enhancers. This breakup could well spark further M&A activity — and not just in North America.

Lessons for the FMCG Industry

1. Cost-cutting is not a growth strategy — Zero-based budgeting may improve margins, but at the expense of innovation and brand relevance.

2. Consumer preferences evolve quickly — Towards fresher, healthier, more international products.

3. Bigger isn’t always better — Focused, nimble companies can outperform sprawling conglomerates.

4. Regional adaptation is crucial — Success requires tailoring products, pricing, and promotions to local markets.

The European Perspective

For Europe, this is largely positive news — particularly on the condiments side. Heinz already enjoys strong brand equity in the UK, Germany, and Benelux. A focused Heinz could invest further in premium and healthier offerings tailored to European tastes. The grocery company’s limited European presence suggests minimal impact beyond Philadelphia, which remains globally relevant.

Bottom Line

If executed well, the demerger could finally deliver the shareholder value the 2015 merger promised but failed to achieve. Investors are likely to favour the Heinz-based condiments company as the growth engine, while the Kraft-based grocery business will have to demonstrate its ability to stabilise and defend market share.

Both businesses, with clearer mandates and tailored strategies, could perform better than the current hybrid structure. And for the FMCG industry, this could trigger further portfolio reshaping, M&A activity, and renewed focus on innovation and regional relevance.

The Kraft Heinz story isn’t over — the next chapter might just be its most successful yet.