The Kraft Heinz Company (KHC) is one of the consumer staples segment’s biggest names in both brand reach and size.

The global food giant—which became one of the world’s biggest packaged foods conglomerates through a 2015 merger—owns and controls roughly 200 brands covering around 55 categories.

The most notable names under this giant’s umbrella include packaged food brand Kraft, condiments brand Heinz, cream cheese brand Philadelphia, flavored drink specialist Kool-Aid, and snacking brand Lunchables.

The company’s 2015 merger built the foundation for a company which has since consistently generated more than $24 billion in sales each year. However sales growth has stalled in recent years, declining in both 2024 and 2025.

American consumers are changing their dietary habits, opting for healthier alternatives. It’s been reported that six out of ten Americans are limiting their intake of processed foods while another 44% are prioritizing organic foods or food items that contain less chemicals and pesticides. The rise of weight-loss drugs like Ozempic also reinforced the healthy eating trend.

In addition to those trends, another driver of Kraft Heinz’s recent struggles is pricing pressure. In 2022, food prices rose almost 10%. While the years that followed saw food price spikes slow, costs still rose nearly 3% last year.

To complicate matters further, high interest rates, a cooling labor market, stagnating wage growth, and soaring delinquencies in recent years have continued to add pressure to American consumers.

As a result, doubts have arisen over Kraft Heinz’s viability as a combined company. Its share price is down more than 40% over the past three years.

Earlier this year the company considered splitting itself into two separate public companies. In this breakup, a global company would be formed to sell sauces, spreads, and seasonings while the other would specialize in grocery staples in the North American region.

The company even went as far as hiring Steve Cahillane, an executive known for breaking up large businesses, to execute Kraft Heinz’s breakup.

However, this planned breakup—in the works over the past year—has recently been halted by Cahillane himself. Instead of splitting Kraft Heinz into two companies, he announced an ambitious $600 million reinvestment plan that would funnel money into marketing, sales, and research and development efforts to reinvigorate the company and its brands.

While it will take some time to see how these efforts will pan out, the company has already made moves, having recently unveiled plans of releasing healthier versions of its Kraft macaroni and cheese, Lunchables, and sauce products.

Despite facing declining sales, Kraft Heinz has managed to sustain above-average Uniform return on assets (“ROA”) of 38% over the past three years.

Kraft Heinz’s stock currently trades at a Uniform P/E of 19x, below market average. At these valuations, investors predict that Kraft Heinz’s returns will plummet steeply to 13% by 2030, which would mark the lowest profitability in the past two decades.

Should Kraft Heinz’s turnaround strategy pay off, it could warrant significant upside for investors moving forward.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research

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