Kraft Heinz History: The Woes of Uniting Two Global Food Giants

Kraft Heinz’s history technically only dates back to the 2015 merger of Kraft Foods Group and the HJ Heinz Company. However, both these household names have long and fascinating backstories. For business owners, marketers, and entrepreneurs, the history of Kraft Heinz provides deep insight into the power of both diversification and consolidation.

At Business2Community, we’ve researched far and wide to deliver a comprehensive account of the Kraft Heinz Company’s history from a basement horseradish producer to the fifth biggest food and beverage company in the world.

Who Owns Kraft Heinz?

The Kraft Heinz Company is a publicly traded company on the NASDAQ stock exchange. Around 52% of shares in the Kraft Heinz Company are owned by institutional investors such as Berkshire Hathaway, Inc. (26.8%), Blackrock, Inc. (7.55%), and the Vanguard Group, Inc. (5.81%). 20% of the company’s shares are owned by individual investors and a further 27% by private companies.

The Kraft Heinz Company is generally referred to as simply Kraft Heinz. It’s a US-based food and beverage company that was formed when Kraft Foods Group and the HJ Heinz Company merged in 2015. As a result of the merger, the company is co-headquartered in Chicago and Pittsburgh. Kraft Heinz is the third-largest food and beverage company in North America and fifth in the world.

Kraft Heinz’s portfolio includes countless iconic brands, such as Oscar Mayer, Philadelphia Cream Cheese, Ore Ida, Capri Sun, and Maxwell House. The company’s global sales exceeded $26.6 billion in 2023.

Who is the Kraft Heinz CEO?

Carlos Abrams-Rivera has been CEO of the Kraft Heinz Company since December 2023. Before joining Kraft Heinz, he worked for other leading food brands such as the Campbell Soup Company, Pepperidge Farm, Mondelēz International, and Kraft Foods Group.

Abrams-Rivera succeeded Miguel Patricio who had served as CEO since 2019. Patricio had been brought in to help address several years of poor sales and market share losses. He also joined amid a fall in the company’s market value thanks to high-profile court cases and an investigation into the firm’s accounting practices by the US Securities and Exchange Commission.

Here’s a list of all Kraft Heinz CEOs since the 2015 merger:

Growth and Development of Kraft Heinz

Dating back as far as 1869, the Kraft Heinz Company has a long and fascinating history.

Here, we give you a rundown of the legacy of both the Kraft Foods Group and the HJ Heinz Company, before delving into its more recent history as a consolidated food and beverage conglomerate.

HJ Heinz Company: 1869-2015

The HJ Heinz Company was founded by Henry J Heinz in 1869 in Sharpsburg, Pennsylvania, and was known at the time as Heinz Noble & Company. The first product in the company’s Anchor Brand was his mother’s horseradish recipe which he produced in the basement of their house.

Heinz Noble & Company went bankrupt in 1875 and a year later Heinz founded F & J Heinz with his brother and cousin. One of the first products they produced was the iconic Heinz Tomato Ketchup. In 1888, Heinz bought his partners’ shares of the company and renamed the business the HJ Heinz Company.

Heinz’s famous tagline “57 varieties” was introduced in 1896, despite the brand having more than 57 products even then. It’s said that the number-based slogan was inspired by an ad for 21 styles of shoes and that five and seven were simply Heinz and his wife’s lucky numbers, respectively.

By 1898, the Heinz factory in Pittsburgh had become the largest food manufacturing plant in the world.

HJ Heinz was incorporated in 1905, with Heinz serving as president until his death in 1919. The company led the way in developing practices to ensure food safety in its impressive factory. In 1908 Heinz opened another processing plant for tomatoes in Ontario, Canada, which would go on to operate until 2014.

Amid the sharp downturn of the Great Depression, Henry Heinz’s son Howard developed ready-to-serve soups and baby food in 1930 which proved to be a huge hit. Throughout the Second World War, Henry Heinz’s grandson Jack led the way, providing aid to the UK and manufacturing gliders. After the war, Jack Heinz expanded internationally and acquired several other food brands including Ore-Ida and Starkist Tuna.

By the turn of the millennium, Heinz began to feel pressure from grocery store chains and own-label brands. It was also reported that the company was slow to respond to significant demographic changes in the US.

In 2013, the HJ Heinz Company was acquired by Berkshire Hathaway and 3G Capital for $23 billion – the biggest deal in the global food industry. Bernardo Hees, the former CEO of Burger King, was appointed the company’s new CEO.

Kraft Foods: 1923-2015

The founder of Kraft, James L Kraft, immigrated to Chicago from Canada in 1903 where he established a door-to-door cheese business. By 1912, the company was big enough to open headquarters in New York City and begin preparing for an international expansion.

In 1915, Kraft invented a method for creating pasteurized processed cheese which offered a longer shelf life than traditional cheese. The process was patented in 1916.

In 1924, the company became the Kraft Cheese Company and began trading on the Chicago Stock Exchange before listing on the New York Stock Exchange in 1926. Throughout the 1920s, Kraft opened international offices and made a number of acquisitions, including the Phenix Cheese Company, the maker of Philadelphia Cream Cheese. By 1930, Kraft had 40% of the US cheese market and was the third-largest dairy company in the country, which led to an acquisition by the National Dairy Products Corporation.

The Kraft Dinner was introduced in 1937. It’s a long-life packaged macaroni and cheese product, which is considered to be one of the world’s first ready-to-eat meals.

In 1969, the company changed its name from National Dairy to the Kraftco Corporation. In 1976, its name changed once again to become Kraft, Inc. In 1988, Kraft was acquired for $12.9 billion by Philip Morris Companies and merged with the firm’s general foods unit to become Kraft General Foods. Philip Morris was known for several household brands of packaged foods, such as Oscar Mayer, Maxwell House, Jell-O, Entenmann’s, and Kool-Aid. In 1995, the company became known as Kraft Foods.

In 2007 Philip Morris sold its stake. Berkshire Hathaway announced in 2008 that it had acquired an 8% stake in Kraft Foods.

Kraft made a £10.2 billion ($16.01 billion at the time) takeover bid for the iconic British chocolate manufacturer Cadbury in 2009. The bid was rejected and met with significant resistance and outrage in the UK, but in 2010 Cadbury approved a revised offer. With this purchase, Kraft Foods had almost 15% of the global confectionery and gum market.

Within days of the Cadbury deal going through, Kraft caused further outrage in the UK by selling the site of a historic Cadbury factory, above, and outsourcing production to Poland.

In 2012, Kraft Foods Inc. split into two separate publicly traded companies. Its North American grocery business became Kraft Foods Group, Inc. and the international snack and confection arm of the business was renamed Mondelēz International, Inc.

The Kraft Heinz Company: 2015-Present

The merger of Kraft Foods Group with the HJ Heinz Company was agreed upon by the Boards and shareholders of the two companies in early 2015 and completed in July of that year. As part of the deal, HJ Heinz’s shareholders, including 3G Capital and Berkshire Hathaway, collectively held a 51% stake in the new company. The remaining shares were allocated to existing Kraft Foods Group shareholders who were also paid a one-off cash dividend of $16.50 per share.

The deal was valued at approximately $45 billion. The new company was expected to have a new annual revenue of around $28 billion, making it the third-largest food and beverage company in North America and fifth-largest in the world, boasting an impressive portfolio of well-known brands.

The Kraft Heinz Company is co-headquartered in Chicago’s Aon Center and at PPG Place in Pittsburgh. The company also has regional offices across the US, Canada, South America, Asia, Australia, and Europe.

In 2017, it was reported that the Kraft Heinz Company had bid $143 billion to buy Unilever, the owner of personal care brands such as Dove, in what would have been the biggest-ever takeover of a British company. The Anglo-Dutch conglomerate was a significantly larger competitor and declined the proposal. Soon after, Unilever and Kraft Heinz announced jointly that the takeover had been abandoned in the face of scrutiny from the UK government.

Undeterred, that same year Kraft Heinz reached an agreement to acquire Cerebos Pacific, which included several food and instant coffee brands such as Saxa, Gregg’s, and Bisto. New Zealand’s Commerce Commission approved the purchase in 2018. It did stipulate, due to competition concerns, that the Kraft Heinz Company should sell on the brand licenses for Gregg’s brand sauces and the F. Whitlock Worcestershire sauce brand.

The same year as that acquisition, the Kraft Heinz Company announced the launch of Springboard Brands, a business focused on growing organic, super-premium food brands. Later that year, Kraft Heinz reached an agreement to acquire Primal Nutrition, owner of the Primal Kitchen paleo condiment brand, as part of its Springboard Incubator program.

The Kraft Heinz Company also revealed in 2018 that it would be selling its nutritional beverage brands, such as Complan and Glucon-D.

In February 2019, the Kraft Heinz Company reported a $10.2 billion loss, cut its dividend by 36%, announced a goodwill impairment charge that would write down its Kraft and Oscar Mayer brands by $15.4 billion, and revealed that the US Securities and Exchange Commission had launched an investigation into its accounting practices.

As a result of this deluge of bad news, the company’s share price plummeted by 20% and Berkshire Hathaway, its biggest shareholder, lost $4.3 billion. Later that year, the Kraft Heinz Company announced an additional $1.22 billion in write-downs and faced the infamous Kraft Heinz Securities Litigation.

In June 2019, Miguel Patricio, the former chief marketing officer of InBev, succeeded Bernardo Hees as CEO of the Kraft Heinz Company. Patricio was tasked with turning around the ailing giant which was stagnating even before that year’s fateful events. At the time, Patricio said he would work on a new growth strategy, predominantly based on organic growth rather than acquisitions.

The following month, Kraft Heinz sold its Canadian cheese business, including the Cracker Barrel, P’tit Quebec, and aMOOza! brands. In 2021, the Kraft Heinz Company sold off part of its remaining cheese business, including the Athenos, Breakstone’s, Hoffman’s, Knudsen, and Polly-O brands, to the French company Lactalis for $3.2 billion. The deal was approved on the condition that Lactalis divest the Athenos and Polly-O businesses.

In 2020, the Kraft Heinz Company announced a new transformation plan, which featured a new motto: “Let’s Make Life Delicious”. Around the same time, Kraft Heinz also released its 2020 Environmental Social Governance report which laid out the company’s aim to make all its product packaging recyclable, reusable, or compostable and to source all the tomatoes that go into Heinz Ketchup sustainably within five years.

The Kraft Heinz Company announced several acquisitions in the early 2020s to drive its international presence, including:

• Hemmer, a Brazilian condiment and sauce company.
• Assan Foods, a Turkish sauce company.
• An 85% stake in the German, direct-to-customer start-up Just Spices GmbH.

In 2023, the Kraft Heinz Company announced that Carlos Abrams-Rivera, former president of the company in North America, would replace Miguel Patricio as CEO. Despite ongoing competition, the company’s global sales exceeded $26.6 billion in 2023.

The Kraft Heinz Securities Litigation

The Kraft Heinz Securities Litigation was a major 2019 lawsuit that claimed Kraft Heinz and its leaders had misled investors about the company’s financial position.

The case, which was brought by numerous complainants, argued that while Kraft Heinz reported increased profits following the merger thanks to efficiency measures, the company had instead been dramatically cutting investment in research and development, quality control, and the supply chain. This, the claimants alleged, had damaged the company’s brand value and led to subsequent losses on their investments.

The litigation significantly damaged the company’s reputation, and eventually led to a $450 million settlement. Many have said that the case highlighted the vital importance of transparent and accurate reporting and strong corporate governance.

The case ran alongside the US Securities and Exchange Commission’s probe into an improper claim of $200 million in cost savings. In 2021, Kraft Heinz paid $62 million to settle the probe into improper accounting and was forced to restate its financial results between 2015 and 2018.

Kraft Heinz Dividend History

The Kraft Heinz Company generally pays dividends every quarter. Here’s a table of the total dividends paid each year since the company came into existence.

In 2019 the dividend was dramatically slashed from a high of $2.50 to $1.60. While Kraft Heinz’s dividend hasn’t been increased since then, it doesn’t mean it won’t ever raise it. With revenue and profit increasing steadily between 2022 and 2024, the company is in a strong position.

The chart above also shows how shares in the Kraft Heinz Company fell following the 2019 scandal. While they have recovered somewhat, shares are yet to return to the historic highs of its first years as a combined business.

History of the Kraft Heinz Logo

The Kraft Heinz Company logo is made up of the colors and styles featured in the previous, recognizable logos of both the HJ Heinz Company and Kraft Food groups.

The Kraft part is similar to the old Kraft logo but without the red border and Heinz carries over its original style and color. The resulting logo is new but gives a nod to the heritage of both companies.

The Future of Kraft Heinz

As Kraft Heinz continues on its transformation journey, the future looks relatively promising with Carlos Abrams-Rivera driving forward a number of strategic initiatives to drive growth and innovation. The company says that it is committed to consistent growth, focusing on expanding its iconic and new, emerging food brands globally.

In 2024, the Kraft Heinz Company has predicted a strong financial performance amid strategic investments​.

Innovation is a core element of Kraft Heinz’s ongoing strategy and the company was named one of Fast Company’s Most Innovative Companies for 2024 for its efforts to develop new products and make the most of technology to meet customer needs. For example, Kraft Heinz is using AI and digital tools to improve efficiency and responsiveness in its supply chain which it hopes will help it bring new products to market faster.

Overall, Kraft Heinz appears to be in a good position to continue its transformation by focusing on innovation, strategic growth, and operational efficiency, and to ensure it continues to be a leader in the global food industry.

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