Kraft Heinz Replaces CEO Ahead of Split Into Public Firms

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Kraft Heinz Co. named a new chief executive officer, with former Kellanova CEO Steve Cahillane set to take over from Carlos Abrams-Rivera on Jan. 1.  Cahillane had been CEO of Kellanova, the snack food company that was previously part of Kellogg, since 2017. Abrams-Rivera, who has been Kraft Heinz’s CEO for about two years, will serve as an adviser to the company until March 6, Kraft Heinz said in a statement. The move follows a difficult period for Kraft Heinz, which said in September that it would split into two separate entities. The company’s stock has dropped about 6% since then, bringing the year-to-date decline to about 20%. The shares rose 0.9% at 11:32 a.m. on Tuesday in New York trading. Bloomberg's Kristina Peterson joins to discuss. After the separation into two public firms, Cahillane will lead the company with brands such as Heinz ketchup, other condiments and boxed meals that comprise its fastest-growing products with about $15 billion in annual sales. The split is expected to be completed in the second half of 2026, according to Kraft Heinz. Cahillane’s arrival fanned speculation about a potential deal for the company he will lead, largely because he oversaw the split of Kellogg. The business he subsequently led, Kellanova, was sold to Mars Inc.  Robert Moskow, an analyst with TD Cowen, said that Cahillane’s arrival is likely to reinforce perceptions that the Kraft Heinz board is open to selling or even splitting up the unit that Cahillane will lead.  ‘Stunning Achievement’ In an interview, Cahillane said the Kellogg split and subsequent sales — the other part of that company was also sold this year — were a “stunning achievement in terms of value creation.”  “At Kraft Heinz, I have every ambition to have a great shareholder return, a great shareholder appreciation,” Cahillane said. “That can be in a lot of different ways, but the most important way is going to be returning the company to organic growth.” Kraft Heinz’s organic growth, which strips out the impact of acquisitions and currency volatility, has declined for eight straight quarters. Last quarter, Abrams-Rivera said the decline was in part due to “one of the worst consumer sentiments we have seen in decades.”  Cahillane said Kraft Heinz needs to focus on coming up with new products, with an emphasis on protein, fiber and shorter, “cleaner” ingredient lists. “The consumer is clamoring for protein, there’s no question about it,” he said, citing demand for Pop-Tarts with added protein that Kellanova launched this year. He also mentioned the growth of GLP-1 weight loss drugs, which suppress users’ cravings and have sparked changes in shopping habits.  Cahillane also served as CEO of Nature’s Bounty Co., which makes vitamins and supplements, and spent time at Coca-Cola, where he served as president of Coca-Cola Americas. As part of his employment agreement, he will receive a one-time equity award in January with a target value of $11 million.  Industry Upheaval The other Kraft Heinz company to be split off includes slower-growing grocery products, such as Oscar Mayer hot dogs and Lunchables, and currently generates revenue of roughly $10 billion. That business was to be led by Abrams-Rivera, but now the board will initiate a search for a CEO to lead it.  Kraft Heinz is one of a raft of food and beverage companies that have announced major changes in management and strategy as the industry struggles to adapt to consumers shifting toward healthier, less-processed options.  Last week PepsiCo Inc. said it would cut prices and reduce the number of its products as part of an agreement with an activist investor, while Coca-Cola Co. announced a new chief executive. Over the summer, Keurig Dr Pepper Inc. announced it was acquiring JDE Peet’s NV and would split into two companies. The Wall Street Journal earlier reported the news. -------- Watch Bloomberg Radio LIVE on YouTube Weekdays 7am-6pm ET WATCH HERE: http://bit.ly/3vTiACF Follow us on X: https://twitter.com/BloombergRadio Subscribe to our Podcasts: Bloomberg Daybreak: http://bit.ly/3DWYoAN Bloomberg Surveillance: http://bit.ly/3OPtReI Bloomberg Intelligence: http://bit.ly/3YrBfOi Balance of Power: http://bit.ly/3OO8eLC Bloomberg Businessweek: http://bit.ly/3IPl60i Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts: https://www.youtube.com/bloombergpodcasts Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake