Kraft Heinz announced on Wednesday that it is pausing activities tied to its previously announced separation and will direct $600 million toward marketing and sales initiatives intended to restore profitable growth after several quarters of weak sales.
The move follows the company’s September announcement of plans to split into two businesses. In premarket trading on the day of the announcement, Kraft Heinz shares were down about 5%.
"My number one priority is returning the business to profitable growth, which will require ensuring all resources are fully focused on the execution of our operating plan. As a result, we believe it is prudent to pause work related to the separation and we will no longer incur related dissynergies this year," said Steve Cahillane, the company’s new CEO, who took charge in January.
The company described the reallocation as a step to concentrate resources on operational execution rather than incurring further costs connected to the separation process in the current year. Management framed the $600 million investment as targeted spending on marketing and sales to drive top-line recovery and, ultimately, profitable growth.
In addition to the corporate announcement, an independent-sounding service referenced in the original communication notes that its AI-based strategy tool evaluates Kraft Heinz alongside thousands of other companies using more than 100 financial metrics. The communication highlighted that the AI has identified past winners such as Super Micro Computer (+185%) and AppLovin (+157%), and offered readers the option to check whether Kraft Heinz appears in any of its strategies.
The company's statement and the CEO comment underline a shift in near-term priorities: concentrating on immediate operating performance rather than progressing the previously planned separation. The firm said this pause means it will not incur related dissynergies this year, signaling a stop to separation-related spending and activities for the period specified.
Contextual summary: Kraft Heinz is deferring work on its planned split and committing a substantial marketing and sales investment to address multiple quarters of weak sales, with the new CEO emphasizing resource focus on operational execution. The market reaction showed an immediate negative response in premarket trading.