Kraft Heinz Wants to Win Back the Modern Eater

Can Jell-O appeal to the gym bro? Kraft Heinz sure hopes so.

After announcing it would not pursue its long-mulled corporate divorce earlier this year, the packaged food conglomerate re-emerged into the spotlight Thursday showcasing a slew of new products it hopes appeal to the health-conscious and adventurous modern eater. That includes protein-packed Jell-O, fiber-packed Crystal Light and cheesy Kraft Mac & Cheese ramen noodles. Whether shoppers actually bite is another question entirely.

Cottage Cheese Industry

Pick your trend: the rise of GLP-1s, keto diet culture, the MAHA revolution. No matter how you slice the Velveeta cheese block, it’s a tough time to be a purveyor of many brand-name ultra-processed foods. Case in point: Kraft Heinz is in the midst of its third straight year of declining sales. But CEO Steve Cahillane, the former Kellogg top boss who took the job in January and subsequently paused the split, says health and wellness culture isn’t entirely to blame. “These brands have been underinvested in for over 10 years,” Cahillane said at a press conference Thursday. “Brands that stop being invested in stop being relevant, and for too long that’s what happened here at Kraft Heinz.”

It’s the driving ethos of a massive packaged food comeback plan worth unwrapping:

• Kraft Heinz says it plowed $50 million this year into developing new brands and improving old ones. Other results of the product push include a protein-packed PowerMac & Cheese, launched earlier this year and which Cahillane said could return the brand to growth for the first time in years, as well as a rethink of the Philadelphia brand as consumers ditch cream cheese for healthier options such as cottage cheese.
• It’s just a small slice of the Jell-O Chocolate Pudding reinvestment pie, which also includes $325 million toward marketing, $250 million toward product costs and $75 million toward hiring 400 new employees. 

The plan, Cahillane said, is to halt the sales decline by next year and return to full-year growth by 2028. Easier said than done, of course. “Success will depend on whether these brands have credibility to adapt to consumers’ evolving nutritional needs … while sticking to their core competence in convenience and taste,” TD Cowen analyst Robert Moskow wrote in a note to clients Thursday.

Coffee Break-Up: Despite pausing the break-up (a move that got the thumbs up from Berkshire Hathaway, the company’s largest shareholder), Cahillane isn’t committed to keeping every brand in-house. Earlier this month, Kraft Heinz said it was selling a majority stake of its North American portfolio of coffee brands (which includes Gevalia and Maxwell House) to an affiliate of private equity firm One Rock Capital Partners in a deal valued at $650 million.