Kraft Heinz (NASDAQ:KHC) executives used the company’s fourth-quarter 2025 earnings call to outline a stepped-up investment plan aimed at restoring organic growth, while also explaining why management has decided to pause a previously discussed separation initiative.
Management frames $600 million investment as “getting back to where we ought to be”
Chief Executive Officer Steve Cahillane said that after joining the company and spending the last several weeks reviewing the business, he concluded Kraft Heinz has been underinvested and that a significant increase in spending is needed to return the company to organic growth. He characterized the incremental $600 million as largely a move to restore investment levels to what the business requires, rather than a reaction to a tougher industry backdrop.
In response to questions about the size of the spend, Cahillane said the company arrived at the $600 million figure through “as much science as we could” combined with experience, including his own. He added the plan would bring brand spending to about 5.5% of topline, and also includes increased spending in SG&A, particularly to bolster the commercial organization.
Spending cadence and areas of focus: Q2 ramp, second-half results targeted
Cahillane said the incremental spending is expected to “start to ramp up in the second quarter,” with management hoping to see “meaningful results” in the back half of the year—specifically, a change in market share trends. He said the company plans to track and emphasize “value market share” as a key accountability measure.
Management said roughly half of the incremental investment will be directed to “price and product and packaging,” with the goal of improving how Kraft Heinz shows up for consumers in-store. Cahillane noted the investments will be “across the portfolio,” but said a significant portion will be directed to what the company has previously referred to as its North American Grocery business.
Chief Financial Officer Andre Maciel added that the company is “lean” and does not want to be lean in commercial functions, signaling additional hiring in sales and marketing. Cahillane said building those capabilities will take time, with more of that spend expected in the third and fourth quarters.
Maciel also described the investment mix as primarily aimed at “healthier ways to grow the business in the long term,” including marketing, R&D, product and packaging, and headcount to improve execution. He said a portion is geared toward price, with the “incremental” price-related resources showing up later in the year, beginning later in the second quarter.
U.S. is the primary target, while parts of the portfolio show momentum
When asked about geography, Cahillane said the incremental investments will be “disproportionately against the U.S.,” where the company needs to turn trends, while noting there are opportunities to invest outside the U.S. as well.
Maciel pointed to areas of momentum already underway. He said the company’s Taste Elevation business—including sausage and cream cheese—has shown improvement, and that in the last 13 weeks the business “flipped to market share growth,” with 70% of Taste Elevation revenue now gaining share in the U.S. He also said early reads into January suggest that momentum is continuing.
Maciel added that across the total U.S. portfolio, market share is “back to what it was from three years ago,” while emphasizing there is still work to do and that the company is aiming for “volume-led, profitable growth” and a higher share of the portfolio gaining market share, similar to 2017–2019 levels.
Outside the U.S., Maciel said emerging markets should continue to deliver strong results, noting that in 2025—excluding Indonesia—the company grew close to double digits with volume growth. He also said the Canadian business is expected to continue delivering growth as it has for the last three years.
Separation plans paused as management prioritizes turnaround and “optionality”
A major theme of the Q&A centered on Kraft Heinz’s decision to pause work on a separation. Cahillane said he continues to agree with the “industrial logic” behind the separation rationale and believes the board’s earlier conclusion “made logical sense.” However, he said he has since learned “how much opportunity there is to fix the business in the short term,” and because resources are finite, management decided to focus fully on returning the company to growth rather than “be distracted by the massive amount of work that’s required in a separation.”
He declined to set an end date for the pause, saying the company will “get smarter each and every day” and that improving performance would preserve “optionality” for portfolio actions in the future. Cahillane described a multi-year view for the turnaround, saying the company would aim to exit 2026 with improved trends and approach 2027 “with an eye towards growth.” He added that if the business is successful and growing organically in 2027, Kraft Heinz would have more flexibility to consider portfolio optimization.
Pricing, SNAP headwind, and capital allocation priorities
On pricing and value, Cahillane said consumers have been pressured by industry-wide price increases driven by input cost inflation, and management wants to return to “more friendly” price points, supported by productivity and the investment plan. Maciel said about 40% of categories (not SKUs or revenue) will have a specific strategy around opening price points, and that base price actions would be limited to “very selected” areas where price thresholds were crossed.
Executives also addressed SNAP-related pressure in guidance. Maciel said about 13% of Kraft Heinz’s U.S. retail business comes from SNAP, compared with 11% for the industry, and management is planning for a 100-basis-point headwind from reduced SNAP funding. Cahillane said the company sees both a headwind and an opportunity to better compete for value-seeking consumers through opening price points and smaller pack sizes, and Maciel said the back-half investment ramp is intended to help mitigate some of the impact.
On capital allocation, Maciel reiterated the company’s stated priorities: invest excess cash in the business first and maintain net leverage at approximately three times. He said the company expects to use excess cash to pay down debt in 2026 and indicated the approach remains unchanged; alternative uses of cash would be considered after the business is funded for organic growth and leverage is at the target.
Looking ahead, Cahillane said it is “too early” to discuss a long-term algorithm, emphasizing instead management’s near-term focus on bending trends, exiting the year with momentum, and positioning the company for organic growth by 2027.
About Kraft Heinz (NASDAQ:KHC)
The Kraft Heinz Company (NASDAQ: KHC) is a global food and beverage company formed in 2015 through the merger of Kraft Foods Group and H.J. Heinz Company. The combination created one of the largest packaged-food companies in the world, built around well-known consumer brands. The merger was supported by major investors and established a multi-national platform for branded food products.
Kraft Heinz develops, manufactures, markets and distributes a broad portfolio of branded packaged foods and condiments.
