The Kraft Heinz Company

What they do

Kraft Heinz manufactures and markets food and beverage products worldwide through platforms including Taste Elevation, Easy Ready Meals, Substantial Snacking, Desserts, Hydration, Cheese, Coffee and Meats. It manages four operating segments reported as North America, International Developed Markets, and an aggregated Emerging Markets group of WEEM and AEM. Major owned brands include Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Maxwell House, Kool-Aid and Jell-O; Capri Sun pouches are sold under license.

Revenue drivers

• North America — Largest segment at $4.63 billion in Q2 2026 and $9.08 billion for the first half, selling Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida and Maxwell House brands. Q2 net sales fell 2.7% with volume/mix down 3.8 points, partly offset by 1.1 points of price.
• Emerging Markets (WEEM and AEM) — The fastest-growing segment at $771 million in Q2 2026, up 10.4% year over year. Organic growth of 8.5% was split between 4.5 points of price and 4.0 points of volume/mix, led by brands such as Master, ABC, Quero and Pudliszki.
• International Developed Markets — Includes Europe and Pacific markets with brands such as Heinz, Golden Circle, Wattie's and Plasmon. Q2 2026 net sales were $865 million, down 3.5%, with organic net sales down 0.7%; the Italy infant and specialty food business was divested on December 31, 2025 for about $146 million.

Recent performance

Second quarter 2026 net sales were $6.262 billion, down 1.4% from $6.352 billion, and organic net sales fell 1.3%. Operating income was a loss of $6.43 billion, driven by $7.4 billion of non-cash impairment charges, while adjusted operating income fell 18.4% to $1.0 billion. Gross profit margin dropped 200 basis points to 32.4%, although adjusted gross profit margin was flat at 34.1%. For the first half, net sales were $12.309 billion versus $12.351 billion, net loss was $4.661 billion, and operating cash flow was $2.1 billion, up 8.2%, with free cash flow of $1.7 billion.

Strategy

Management is executing a turnaround under CEO Steve Cahillane, raising its Organic Net Sales outlook for 2026 and increasing incremental investments by $100 million to approximately $700 million for the year. The company announced in September 2025 a plan to separate into two independent public companies via tax-free spin-off, but on February 11, 2026 the Board decided to pause work on the Separation. Kraft Heinz committed to removing FD&C colors from its U.S. portfolio before the end of 2027 and to launching all new U.S. products free of those colors, affecting primarily Hydration and Desserts. In the second quarter of 2026 the company announced organizational changes to combine WEEM and AEM into one Emerging Markets segment and move remaining European WEEM countries into EPDM, effective in the third quarter of 2026.

Risks

• Impairment charges — The company recorded $6.7 billion of goodwill and $2.6 billion of intangible asset impairments in 2025, and a further $7.4 billion of impairments in Q2 2026, reflecting pressure on carrying values of its brands.
• Pricing and market share — Management states that pricing actions taken to offset inflation have in some instances negatively impacted, and could continue to negatively impact, market share.
• Tariffs and input costs — After the U.S. Supreme Court invalidated IEEPA tariffs in February 2026 and a new 10% global tariff was announced, Kraft Heinz said most raw materials are sourced through suppliers that are the importer of record, making any tariff recovery uncertain in timing and amount.
• SNAP benefit changes — Modifications to the Supplemental Nutrition Assistance Program under the One Big Beautiful Bill Act are expected to reduce the number of participants and average benefits, which management says could negatively impact demand, results of operations, cash flows and market share.

Outlook

Management raised its 2026 Organic Net Sales outlook and is increasing incremental investments by $100 million to approximately $700 million in 2026. The company says it is ahead of plan and focused on returning to volume-led, sustainable and profitable growth. It expects inflationary pressures in supply chain costs to increase throughout 2026 due in part to the Iran Conflict, with significant uncertainty remaining. Separately, a February 2026 delisting notice or listing-rule failure was disclosed in an August 2026 8-K.