07:55 AM EDT, 09/11/2025 (MT Newswires) -- Kraft Heinz's ( KHC ) recent announcement to split into two listed companies drew comparisons to Kellogg's ( K ) 2023 break-up, but whether Kraft's offspring will be acquired like Kellogg's ( K ) were remains an open question among industry analysts.

Wall Street reacted unfavorably to Kraft's Sept. 2 announcement, which drew a rare public rebuke from Warren Buffett, chief executive and chairman of Berkshire Hathaway ( BRK/A ) (BRK.A, BRK.B), the food and beverage company's largest shareholder. Buffett told CNBC in an interview at the time that he was "disappointed" in Kraft's decision.

Berkshire partnered with 3G Capital in 2015 to merge Kraft Foods and H.J. Heinz, and the combined entity's stock has mostly been a poor performer ever since. Shares of Kraft Heinz ( KHC ) are down about 72% since their February 2017 peak.

"It certainly didn't turn out to be a brilliant idea to put them together, but I don't think taking it apart will fix it," Buffett said in the interview.

Kraft Heinz's ( KHC ) struggles can be attributed to headwinds that have bedeviled the entire industry as well as to internal issues specific to the company, Daniel Biolsi, head of consumer staples research at Hedgeye Risk Management, said in an interview with MT Newswires.

"The whole industry has struggled to grow volumes, especially after the elevated inflationary period we've had," he said. "I really don't know what they could've done. You raise prices that much on the consumer, you have to destroy demand."

Snacks, which Kraft Heinz ( KHC ) offers in abundance, have suffered from the explosive popularity of glucagon-like peptide-1, or GLP-1, medicines like Ozempic and Wegovy that suppress users' hunger cravings.

"If you asked anyone in this space eight years ago, snacks would've been one of the top categories, so there were a lot of companies investing behind it, a lot of growth initiatives there, and the whole category has pulled back," Biolsi said. "It took what was probably the fastest-growing food category and made it a negative."

Kraft Heinz ( KHC ) oversees a dizzying number of brands that has led to operational complexity and the misallocation of resources and capital, all of which the split will seek to remedy, BofA Securities analysts said in a Sept. 2 research note.

The company's lackluster performance can also be attributed to 3G Capital's flawed investment model involving aggressive cost-cutting via zero-based budgeting that it also implemented with Budweiser and Burger King, Biolsi said.

"I think the market has voted that the 3G way of just cutting out investment in everything is going to lead to lower growth," he said. "When Warren (Buffett) invested, it was very popular. The stocks were really working. Now, years later, the critics were right, you can't just cut marketing and expect growth."

One of the companies emerging from the Kraft Heinz ( KHC ) split, given the placeholder name "Global Taste Elevation," will house the former company's condiments, sauces and flavor enhancers, as well as the Heinz, Philadelphia and Kraft Mac & Cheese brands. This new company's portfolio posted $15.4 billion in net sales last year and about $4 billion in adjusted earnings before interest, taxes, depreciation and amortization.

The other entity, given the placeholder name "North American Grocery," will focus on North American staples and be home to brands including Oscar Mayer, Kraft Singles and Lunchables. Its portfolio totaled net sales of about $10.4 billion and adjusted EBITDA of around $2.3 billion in 2024.

The two companies' permanent names will be determined later.

Kellogg did something similar two years ago, splintering into Kellanova ( K ) , focused on global snacking, international cereal and noodles and North American frozen foods, and WK Kellogg (KLG), focused exclusively on North American cereal brands.

Less than a year later, Kellanova ( K ) agreed to be acquired by Mars for $35.9 billion. The deal cleared the US Federal Trade Commission's antitrust review in June, and is still awaiting approval by the European Union, though Kellanova ( K ) has said it expects it to close by year end. WK Kellogg signed an agreement in July to be acquired by Ferrero Group for $3.1 billion, a surprising announcement given how low expectations have been for the cereal business, according to Biolsi.

Given the respective brands and financials of Kraft Heinz's ( KHC ) two new companies, the one housing sauces and shelf-stable meals would appear to be the more likely acquisition target, but the Kellogg situation shows that surprises can happen.

"It doesn't rule out that they could both get acquired because I never thought both parts of Kellogg would get bought either," Biolsi said. "The best scenario is that they could be more interesting to (acquirers) apart."