Kraft Heinz continues to struggle with declining revenue as it moves forward with plans to divide into two separate entities, the food manufacturing giant said in its Q3 earnings report Wednesday.
“Our third quarter results reflect a modest year-over-year improvement in our top-line performance relative to the first half of the year,” said Kraft Heinz CEO Carlos Abrams-Rivera. “While the operating environment remains challenging, we’re seeing improvement driven in part by targeted investments we’re making to deliver superior and affordable products to our consumers.”
These macro trends prompted Kraft Heinz to lower its fiscal year 2025 outlook to reflect a 3% to 3.5% decline in year-over-year organic net sales, compared to its earlier projection of a 1.5% to 3.5% drop.
“This contemplates slower growth in emerging markets, driven by continued declines in Indonesia and pressure in US retail,” the company said.
The big spin-off
In Kraft Heinz’s effort to right the ship, it announced plans in early September to split into two companies, one that will focus on global business, and the other on North America.
Those two companies, which are yet to be formally named, will include what Kraft Heinz is referring to as Global Taste Elevation Co., which will include Heinz, Philadelphia and Kraft Mac & Cheese. The other, North American Grocery Co., will include Oscar Mayer, Kraft Singles and Lunchables, the company said.
“The separation is designed to maximize Kraft Heinz’s capabilities and brands while reducing complexity, allowing both new companies to more effectively deploy resources toward their distinct strategic priorities,” the company said.
Kraft Heinz has been on a downward trajectory for the last few years, reporting a 3% year-over-year decline in net sales in 2024 to $25.8 billion. That’s compared to the first nine months of 2025, where net sales dropped 3.5% year-over-year to $18.59 billion.
“We remain on track to separate into two independent companies in the second half of 2026, and while we manage that transition, our priority is to drive performance today and position both businesses for long-term success,” Abrams-Rivera said on Wednesday.
Kraft Heinz’ marketing blitz
Kraft Heinz is also focusing on household penetration with a massive marketing and media campaign. The company said it plans to invest roughly $300 million in the US, roughly $80 million of which will go toward “incremental marketing spending,” according to CFO Andre Maciel.
“We are adding relevant investments on the business, and we don’t think that adding more price at this moment will yield results,” Maciel said. “The investments we have made already allow us to have opening price points in critical categories.”
The company could go further with its marketing efforts in the future as the company builds out its brands, he added.
The marketing effort is planned for the second half of the year and will concentrate on the key holidays of Thanksgiving and Christmas. Kraft Heinz also increased its marketing and promotion spending during the back-to-school season this year, Maciel said.
“We focused a lot on trying to drive units to have those household penetrations coming in, with the expectation that these events will generate repeat purchases, which will help with the sales in the future,” Maciel said.
Kraft Heinz is up against “one of the worst consumer sentiments we’ve seen in decades,” according to Abrams-Rivera.
“As we go into even a holiday season, we’re already seeing how customers are pulling back on inventory, and that’s reflected in our guidance as well,” he said. “It is a unique moment right now in which the consumer negativity and the sentiment is extended longer than we had originally expected.”
