With a Kraft Heinz breakup reportedly on the horizon, what happens next?

Breakups are often inevitable—even for consumer packaged goods giants.

Kraft Heinz is reportedly on the brink of consciously uncoupling after a decade together. The purveyors of Kraft Mac & Cheese and Heinz Ketchup, among other brands that dominate the grocery aisles, were mashed together in 2015 under a deal arranged by investors 3G Capital and Warren Buffett. Ten years later, the grocery landscape has changed considerably, with many consumers focused on how processed their food is and an FDA seeking to “Make America Healthy Again”—and the company is set to undergo another structural shift. This time, some of the Kraft grocery brands may move under a separate company that could be worth up to $20 billion, according to the Wall Street Journal, while keeping condiment-aisle staples like the titular ketchup and Grey Poupon under the same roof.

“As announced in May, Kraft Heinz has been evaluating potential strategic transactions to unlock shareholder value,” Lynsey Elve, a Kraft Heinz spokesperson, wrote in a statement to Marketing Brew. “Beyond that, we do not comment on rumors or speculation.”

Should Kraft Heinz truly decouple, a move that will likely take years to be fully fleshed out, brand consultants and ad agency execs told Marketing Brew that the move stands to play a major role in the futures of the vast portfolio of CPG brands, as well as affect their approaches to advertising under new corporate structures.

“Where a brand goes to the next company can change whether it’s a jewel or not,” Greg Silverman, global director of brand economics at brand consultancy Interbrand, said. “If there are synergies, whether supply-chain synergies, brand management synergies, distribution synergies, that give[s] a lot of power and maybe even customer overlap. That can change the prospect of something that doesn’t look so successful now because it’s in a new context with different meanings or capabilities. It can become very powerful.”

Behind the scenes

What the future of what Kraft Heinz looks like remains to be seen, but historically, business units that are spun out will be faced with crafting a narrative for that new organization around its purpose as well as supporting its individual brands, explained Greg Beauchamp, the founder and CEO of creative agency and production shop Bindery, which is currently working with Colgate-Palmolive to redefine its corporate brand narrative.

“It’s a process that takes a lot of time to do well,” Beauchamp said. “Especially at these really big legacy organizations, it requires an immense amount of stakeholders because you essentially have to meet and get buy in across all of the different subbrands. That alone is a very complicated and time-consuming process.”

Where a brand ends up could end up affecting its advertising strategy, including giving some a chance to take edgier risks rather than play it safe. To Sam Piliero, founder and head of growth at performance marketing agency The Moonlighters, that’s a crucial point, considering that brands that make waves today are often the ones that have given their creative teams more creative freedom online.

“You’re hoping you’re on the side of the brands that have a little bit more leniency, of course,” Piliero said. “[With] a lot more freedom in marketing, a lot more crazy creative, a lot more engaging creative.”

One major lingering question: What side of the business might Kraft Heinz’s North American CMO Todd Kaplan end up on? Kaplan has been at the company for just under a year after joining the company in August 2024 from PepsiCo, but his work for Heinz has already garnered headlines, including through a partnership with hip-hop producer and DJ Mustard, who was aptly named chief mustard officer for the company in February; the brand also released its first new flavored mustard in a nearly a decade.

Behind the scenes, the tactical realities of a breakup will likely stretch beyond personnel and master brand narrative decisions into the nitty-gritty of sorting out ad budgets, rejiggering marketing teams and ad agency relationships, and revisiting ad accounts across various platforms.

“I’d say minimum three years to get this untangled,” Piliero said. “When you’re dealing with hundreds of brands, you’re dealing with potentially thousands of total ad accounts between anything that they run on, which means you’re dealing with hundreds of thousands of ads, ad units, ad sets, campaigns, handles, et cetera. The access alone on this is a full-time job for multiple people—access to decipher what’s going where, how it’s going, [with] who, and where. It’s very challenging.”

E is for efficiencies

Mergers like Kraft Heinz are typically only done with the expectation that combining the two companies will boost profit and shareholder value, but that hasn’t been the case for Kraft Heinz. In the years since the deal, the company has lost $57 billion in market value, per the WSJ, and the stock price has taken a serious tumble, down 60% in 10 years, even though its operating profit grew.

“The whole business case was driven by the financial team, not by the marketing, advertising, or brand folks,” Allen Adamson, co-founder of brand consultancy Metaforce, said. “In that scenario, the game was, mush it together, and say ‘toss.’ Remove the duplicate marketing people, remove the duplicate ad people, remove them. It was all about efficiency and getting scale and getting cost down.”

In the event of a breakup, it’s likely any of the efficiencies that motivated the merger will be lost—including, perhaps, its marketing muscle.

“Where they lose the power of scale is in combined advertising spend,” Eunice Shin, founder and CEO of brand consultancy The Elume Group, said.

Adamson noted that it’s possible that when executives sorted out agency relationships and how to spend their ad dollars 10 years ago, they were likely doing so through the lens of who could give them the best price for their brands bundled together over the best creative idea.

If a breakup happens, the challenge for Kraft grocery brands will be that “there is no efficiency play,” Adamson said. “You’re gonna have to spend money to turn this brand and business around.”