👉 Background: Kraft Heinz is the global food behemoth that was created in 2015 through a merger between Kraft Foods and Heinz. And this mega-merger was backed by the man, the myth, the legend Warren Buffett and his firm Berkshire Hathaway.

👉 What happened: After a decade as a committed family unit, Kraft Heinz is reportedly planning to split its business in two:

• In the one business, they would have their high-growth condiments and sauces (think: Heinz Ketchup)
• In the other business, they would have grocery staples like cheese and meats (think: Kraft Singles)

👉 What else: The reason for the potential split was due to the rising competition from private label brands, and also a big shift towards healthy foods… or no food at all. Weight-loss drugs, like Ozempic, are squeezing big food brands globally.

What's the key learning?

💡There’s a time for merging, and a time for demerging… and a time to acknowledge your cheesy dreams didn’t quite pan out as expected. When Kraft and Heinz came together in 2015, the goal was to build a global consumer goods powerhouse, one that could compete with Unilever and Nestlé.

💡Nearly a decade later, it turns out some parts of the business have pulled their weight (hello, Heinz sauces) while others (like Oscar Mayer meats) are lagging behind. In fact, by 2019, just 4 years after the merger, Kraft Heinz wrote down the value of some of their brands by more than $15 billion USD and its share price has lost more than 60% since the merger.

💡So now, the idea is that by splitting up the business, it could give each division the chance to shine on its own. This ain’t the only example of a split up recently. Kelloggs split up its business into Kellanova, which owns the snacks like Pringles and Pop Tarts, while WH Kellogg Co owns the US cereal business (and was recently sold to Ferrero).