Steve Cahillane to take the helm in January
Kraft Heinz announced a major leadership change as it prepares for a planned break-up next year. The packaged foods group said Steve Cahillane, former chief executive of Kellanova, will become CEO on January 1.
Cahillane joins Kraft Heinz shortly after Kellanova completed its $36bn sale to privately held confectionery group Mars. He is expected to lead the faster-growing side of Kraft Heinz following the company’s planned separation.
Current CEO to step aside from management
The company also confirmed that its current chief executive, Carlos Abrams-Rivera, will not retain a management role once the break-up is completed in the second half of next year. Abrams-Rivera had previously been selected to lead the slower-growing grocery business after the split.
Instead, Kraft Heinz said its board will search for a different leader for that grocery-focused unit. Abrams-Rivera will remain with the company in an advisory role until March.
Two-company structure aimed at reviving growth
Kraft Heinz is splitting into two groups in an effort to re-energize growth. One business, to be led by Cahillane, will include higher-growth brands such as Heinz ketchup and Philadelphia cream cheese. The second will house more mature grocery staples with slower sales momentum.
The faster-growing unit will be known as Global Taste Elevation Co, according to the company.
Packaged foods sector faces pressure
The leadership shuffle comes amid broader upheaval in the packaged foods industry. Sales volumes have stagnated after companies raised prices aggressively following the pandemic, while consumers and regulators have become more critical of the nutritional value of processed foods.
Recent dealmaking reflects those pressures. Kellanova emerged from a break-up of Kellogg’s business, while WK Kellogg was later acquired by Italy’s Ferrero. Mars, now the owner of Kellanova, remains family-controlled and insulated from public market pressure.
Legacy of the Kraft Heinz merger
Kraft Heinz was created in 2015 through a merger orchestrated by 3G Capital and backed by Warren Buffett’s Berkshire Hathaway. Although the deal formed one of the world’s largest food companies, the group’s market value has declined sharply in the years since.
Abrams-Rivera became CEO at the start of 2024, replacing Miguel Patricio. Kraft Heinz also announced that board member John Cahill, a former Kraft chief executive, will take over as chair from Patricio.
Market reaction
Investors responded positively to the announcement, with Kraft Heinz shares rising 1.5 percent in pre-market trading on Tuesday.