Dive Brief:
- Kraft Heinz expects sales growth to return in the second half of 2027 as recent innovation efforts begin to pay off for the ketchup and cream cheese manufacturer, the company told investors this week.
- The food giant’s global market share, organic net sales and volume trends have improved from 2025, the company said at its investor day. Recent success stories include double-digit growth for better-for-you ketchups Heinz Simply and Heinz Zero.
- Kraft Heinz has committed $700 million to increase marketing and innovation for its brands as the food giant looks to improve its competitiveness and support long-term growth.
Dive Insight:
After several quarters of declining net sales, Kraft Heinz is optimistic that the 157-year-old food manufacturer is finally poised to turn the proverbial corner.
The Philadelphia cream cheese and Kraft Mac & Cheese maker has struggled for years due to weak innovation, a shift away from processed foods toward healthier fare and a pullback in consumer spending due to inflation.
But Steve Cahillane, the former Kellanova CEO, has wasted little time trying to right the ship at the storied food maker.
Cahillane canceled a planned split of the company, overhauled Kraft Heinz’s operating structure and brought brands into new segments, such as Kraft Mac & Cheese into protein and Philadelphia cream cheese into the lactose-free space.
The company expects innovation to grow from approximately 3% of U.S. retail net sales this year to 5% in 2027, with nearly half of its pipeline focused on health and wellness, including higher protein, reduced sugar and simpler ingredients.
As Kraft Heinz focuses on the biggest opportunities within top brands, it also appears more willing to offload underperforming assets. Earlier this month, Kraft Heinz announced it was selling Maxwell House and other coffee brands in North America to a private equity firm.
The coffee sale will be the first “meaningful M&A transaction in five years, underscoring a more decisive approach to portfolio management and prioritizing investment behind its strongest growth opportunities,” Kraft Heinz noted.
Cahillane said in a statement that the company’s operating model and investments will set the company up for long-term growth.
“The opportunity ahead of us is significant, and we have the brands, scale and capabilities to capture it,” Cahillane said. Analysts who cover the company were also optimistic about Kraft Heinz’s outlook.
Erin Lash, a senior director with Morningstar, said initial gains at Kraft Heinz have been “encouraging.” She said in a research note that too much attention is being spent on volumes, softer consumer spending and increased competition “without considering the value of renewed brand investment initiatives.”
Kraft Heinz’s focus on increasing innovation as a percent of sales sounds “reasonable,” TD Cowen analyst Robert Moskow added in a note to investors.
Still, he added that “success will depend on whether these brands have credibility to adapt to consumers’ evolving nutritional needs (e.g. protein, fiber, lower sugar) while sticking to their core competence in convenience and taste.”
Kraft Heinz this month said net sales during its third quarter fell 2% to $6.12 billion, with sales in North America, its largest region, slipping 3.4%. The company narrowed its organic net sales forecast to drop between 0.5% and 1.25%, versus an earlier projection of as much as a 2% decline.
