Updated Version 2 - As Carlos Cahill pushes for a business restructuring, Kraft Heinz will divest its North American coffee business division.

The full text adds performance details and background information

Reuters, November 4 - Kraft Heinz KHC.N said on Wednesday it will spin off its North American coffee business, valuing the unit at $650 million, in a move aimed at allowing CEO Steve Cahillane to focus more on the company's core businesses—packaged food and condiments.

Shortly after Steve Cahillane became CEO in January, he shelved the company's previously planned spin-off (link), saying Kraft Heinz's problems were solvable.

As the company focused on launching high-protein foods and electrolyte drinks to attract health-conscious consumers,he drove a $700 million increase in marketing and innovation spending (link) during his tenure.

After Kraft Heinz raised the lower end of its organic net sales growth target, its shares rose about 3% in premarket trading. The company now expects sales for fiscal 2026 to decline more narrowly, from 1.25% to 0.5%.

“Compared to last year, our market share, sales, and volume trends across regions are improving,” Cahillane said in a statement.

The deal to sell the coffee business unit—which includes the Maxwell House and Gevalia brands—to private equity firm One Rock Capital Partners is expected to close by mid-2027. The company said Kraft Heinz will retain a 30% stake.

Beverage company Keurig Dr Pepper (KDP.O) issued a warning on Tuesday (link), saying that profit growth in its U.S. coffee business would slow in the fourth quarter as consumers shift to cheaper brands.

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In the third quarter, overall sales volume at Kraft Heinz fell by 1.1 percentage points, with North America seeing the steepest drop of 2.4 percentage points.

To offset rising input costs—including tariffs and higher packaging and shipping costs from U.S.-Iran tensions—multiple price hikes in recent years have eaten into packaged-goods companies’ sales, as consumers push back.

The company said that for the three months ended September 26, adjusted operating profit declined 15.2% due to higher procurement and logistics costs, lower sales volume, and increased advertising spending.

According to data compiled by London Stock Exchange Group (LSEG), net sales fell nearly 2% to $6.12 billion, though slightly above the expected $6.09 billion.

Lower interest expenses and reduced income tax helped net income beat expectations and allowed the company to raise its annual adjusted EPS target to between $2.07 and $2.13.

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