Kraft Heinz Company (KHC), the fifth-largest food and beverage company in the world, is the result of decades of takeovers in a growth strategy that shows no signs of slowing down.
In 2017, the food products giant launched a $143 billion somewhat hostile bid for Unilever (UL) but eventually shelved that plan. With more than 200 household brands under its umbrella as of 2024, Kraft Heinz has roots that date back to the late 1800s through its Pittsburgh-based Heinz line, and back to the early 1900s through its Chicago-based Kraft line. The two companies merged in 2015 in a massive deal spurred on by 3G Capital and Berkshire Hathaway after decades of absorbing brands like Nabisco, Kool-Aid, and Oscar Mayer.
Key Takeaways
- Kraft Heinz Company, the fifth-largest food and beverage company globally, was formed through decades of mergers and acquisitions, including the 2015 merger of Kraft Foods Group and H.J. Heinz Co.
- In 2017, Kraft Heinz attempted a $143 billion bid for Unilever, which was eventually abandoned.
- The company’s roots trace back to the late 1800s with Heinz and the early 1900s with Kraft, both of which became iconic brands in the food industry.
- Berkshire Hathaway is the largest shareholder of Kraft Heinz, holding a 26.93% stake as of August 2024.
- Kraft Heinz generated around $27 billion in annual net sales in 2023, supported by its portfolio of over 200 household brands.
Investopedia / Sabrina Jiang
Who Owns Kraft Heinz Company?
Berkshire Hathaway holds the largest stake in Kraft Heinz, with a 26.93% stake and over 325 million shares as of August 2024. It is followed by minority holders including Blackrock, Vanguard Group, and State Street Corporation with 7.58%, 5.83%, and 3.12% stakes, respectively.
Heinz Began With Ketchup
The H.J. Heinz Company was founded by American entrepreneur Henry John Heinz, son of German immigrants. He began a small food business with his brother and cousin in 1876. Heinz Tomato Ketchup was among the company’s first products, and it became Heinz’s most iconic and eponymous brand.
Heinz eventually bought out his partners and established the H. J. Heinz Co. in 1888. That company was incorporated in 1905 with Heinz serving as the first president, a position he held throughout his life as he built more than 20 processing plants throughout the country.
During the Great Depression in the 1930s, Heinz became a top seller in ready-to-eat meals and baby food under the leadership of Howard Heinz, Henry Heinz’s son. During World War II, Heinz provided food aid to the United Kingdom and then expanded its international presence with new plants in several countries in the post-war years.
Over the next few decades, Heinz continued to grow with brand acquisitions like Starkist Tuna and Ore-Ida until Berkshire Hathaway and 3G Capital bought the company in a deal valued at $28 billion in 2013. Two years later, the investors pursued the massive merger with Kraft Foods Group.
Note
As of August 2024, Kraft is the third-largest food and beverage company in North America. It is the fifth-largest food and beverage company in the world.
Kraft Started With Cheese
Kraft’s origins began with Canadian immigrant James L. Kraft, who started a wholesale door-to-door cheese business in Chicago with his brothers. They incorporated it in 1909. By 1914, J.L. Kraft and Bros. Company was selling 31 varieties of cheese, and in 1916 it patented a pasteurized processed cheese that gave cheese a longer shelf life.
Meanwhile, a company called National Dairy Products Corporation was aggressively acquiring dozens of small dairy products companies throughout the U.S. and eventually snapped up Kraft in 1930. National Dairy changed its name to Kraftco Corp. in 1969.
Phillip Morris Companies then acquired Kraft in 1988 after taking over General Foods in 1985. Philip Morris then acquired Nabisco Holdings in 2000 and integrated the companies into Kraft General Foods, which it began to sell off in 2007. Through the share sales, Kraft Foods Inc. became a fully independent public corporation.
As its own company, Kraft Foods continued an aggressive streak of mergers, buying French biscuit company Groupe Danone for $7 billion in 2007 and British candy company Cadbury for more than $19 billion in 2010. Then in 2012, Kraft Foods divided into two: a U.S. grocery products company called Kraft Foods Group Inc. and an international snacks company called Mondelez International.
Kraft Foods Group produced brands like Oscar Mayer, Oreo, Philadelphia cream cheese, Planters, and Maxwell House among many others. It was an independent public company listed on the Nasdaq exchange for about four years before merging with H.J. Heinz Company in 2015, creating the third-largest food company in North America.
Kraft Heinz Co. holds more than 200 iconic brands that together drew in about $27 billion in annual net sales in 2023.
What Are Kraft’s Most Popular Brands?
Kraft Heinz owns over 200 iconic brands, with some of the most popular including Kraft Macaroni & Cheese, Heinz Tomato Ketchup, Philadelphia Cream Cheese, Oscar Mayer, Planters, Jell-O, and Velveeta.
How Did the Kraft and Heinz Merger Come About?
The merger between Kraft Foods Group and H.J. Heinz Co. in 2015 was orchestrated by 3G Capital and Berkshire Hathaway. The merger created one of the largest food and beverage companies in the world.
What Was Kraft’s First Major Product?
Kraft’s first major product was its processed cheese, introduced in 1916. This innovation allowed cheese to have a longer shelf life without refrigeration, which was particularly valuable during wartime.
What Were the Key Acquisitions Made by Kraft Foods?
Some of Kraft’s key acquisitions include the purchase of Nabisco in 2000, which added a variety of snack brands to its portfolio, and the acquisition of General Foods in 1985, which brought iconic brands like Jell-O and Maxwell House. Another significant acquisition was the purchase of Cadbury in 2010, which expanded Kraft’s presence in the confectionery market.
The Bottom Line
Kraft Heinz Company, the fifth-largest food and beverage company globally, was formed through decades of mergers, including the 2015 merger between Kraft Foods Group and H.J. Heinz Co., driven by 3G Capital and Berkshire Hathaway. With roots dating back to the late 1800s and early 1900s, the company now owns over 200 household brands and generated approximately $27 billion in annual net sales in 2023.
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