Kraft Heinz (NASDAQ:KHC) said it is increasing its investment behind key brands and expects improving consumption and market-share trends through the second half of 2026, as management pointed to early signs of traction from marketing, innovation and targeted pricing actions.
During the company’s second-quarter earnings call, Chief Executive Officer Steve Cahillane said Kraft Heinz has spent roughly one-third of its initially planned $600 million in incremental investments so far this year and will add another $100 million, primarily for marketing, in the second half. The company expects spending in the third and fourth quarters to be broadly even.
Consumption and Share Trends Show Improvement
Management said underlying consumption trends are improving despite timing effects from Easter, snowstorms and inventory shipment phasing. Chief Financial Officer Andre Maciel said second-quarter consumption declined about 2.5%, while July consumption was down about 1%, indicating an early improvement.
Maciel said the company expects consumption to improve sequentially in the third quarter and again in the fourth quarter, though he did not provide specific quarterly targets. Cahillane said Kraft Heinz aims to exit 2026 with its strongest consumption rates of the year.
“The momentum is growing,” Cahillane said. “Nobody’s doing a victory lap that we’re declining less than we anticipated, but it is moving in the right direction.”
The company lost 30 basis points of market share during the first half, Maciel said, an improvement from losses that reached 90 basis points at one point in early 2025. In the most recent four-week period, market-share losses had narrowed to roughly 20 basis points or slightly better, according to management.
Kraft Heinz said its share performance has faced pressure from changes to Supplemental Nutrition Assistance Program, or SNAP, benefits. The company had included a 100-basis-point headwind from SNAP in its planning for the year, Maciel said, but management believes its actions have helped offset some of that pressure.
Investment Focused on Brands With Early Momentum
Management identified Capri Sun, Heinz, Ore-Ida, Kraft Mac & Cheese and Philadelphia as brands receiving incremental growth investment. Maciel said these categories generally combine strong brand equity and high gross margins, while also offering opportunities for new product development and marketing.
In the U.S., Cahillane said Heinz condiments have returned to growth, while Mac & Cheese consumption has improved. He also cited early momentum from Capri Sun Hydrate, Kraft Power Mac & Cheese and Ore-Ida Shapes.
Power Mac & Cheese is available in 35,000 stores and has delivered consumption in the first quartile of innovation performance, Cahillane said. He added that retailers have viewed the product favorably and that early indications suggest it is incremental to both Kraft Heinz and the category.
Outside the U.S., management said emerging markets delivered a strong quarter. Heinz grew 12% in emerging markets during the period, driven by distribution gains and consumption, Cahillane said. Maciel added that Heinz grew 3% worldwide year-to-date and is expected to accelerate from that level. U.S. condiments also rose 3% year-to-date after being flat last year, he said.
Global away-from-home operations returned to growth, according to Cahillane, who described the channel as strategically important and said the company is investing in products, customers and distribution.
Meats and Meals Remain an Area of Focus
Management acknowledged that additional work remains in its meats and meals business, particularly Oscar Mayer Deli Fresh. Cahillane said Kraft Heinz has nearly completed the rollout of new Deli Fresh packaging and is seeing improved early performance, although he said the company still has work to do with the brand.
He said performance in bacon and hot dogs has been better than in Deli Fresh, suggesting the issue is more concentrated in sliced deli meats. The company also introduced Lunchables Snackables and made product improvements to Lunchables, with early signs of progress, according to Cahillane.
Maciel said investors should look for continued improvement in Mac & Cheese and taste elevation products, momentum in desserts, and better trends in cold cuts as the company laps declines that began in July 2025.
Margins, Cash Flow and 2027 Positioning
Looking ahead, Cahillane said expected inflation of 4% to 5% in 2027 appears manageable. He said productivity remains the company’s first line of defense against inflation, and Kraft Heinz intends to maintain and strengthen margins over time.
Maciel said the company does not expect 2026 investment spending to “wrap around” into 2027, emphasizing that the current year will serve as the base for future investment levels. The company expects to retain flexibility to shift funding among marketing, pricing and product initiatives based on returns.
Management also highlighted cash-flow preservation and debt reduction. Maciel said Kraft Heinz paid down $1.9 billion of debt during the quarter and another $1 billion after the quarter ended, while refinancing an expensive debt maturity. He said the company maintained its free-cash-flow outlook in dollar terms and increased its cash-conversion expectation for the year.
Cahillane also said Kraft Heinz is enthusiastic about new partnerships with Disney and the NFL. He cited potential opportunities with Disney in co-branding, merchandising, licensing and activation across parks, cruise lines and hotels, though he did not provide a timetable for related products or campaigns.
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.
