Kraft Heinz to Sell Coffee Unit to Refocus on Other Brands

(Bloomberg) -- Kraft Heinz Co. ( KHC ) said Wednesday it was divesting its North American coffee business in a bid to tighten its portfolio as the company seeks to jump start its growth.

Under the proposed transaction, Kraft Heinz is unloading a slew of coffee brands including Maxwell House and Gevalia, to private equity firm One Rock Capital Partners, LLC at an enterprise value of $650 million. Kraft Heinz will keep a 30% non-controlling equity stake in the coffee unit. The deal is expected to close in mid-2027, the company said.

The maker of Kraft Mac & Cheese and Heinz ketchup has been working to revive some of its struggling brands with more resources. Divesting the coffee business will allow those funds to be more effective, the company said Wednesday.

"This transaction is a meaningful step in unlocking value from our portfolio and will further accelerate the momentum behind our transformation," Chief Executive Officer Steve Cahillane said in a statement.

The divestment is one of the company's biggest moves this year to refocus its attention on brands it believes it can revitalize, while disentangling itself from others. Coffee has seen increased competition from energy drinks in recent years, though it remains a huge global market.

Shares of Kraft Heinz rose 3% at 7:17 am in premarket trading Wednesday in New York.

The company also reported third-quarter adjusted earnings per share of 53 cents that came in above the average of analysts' expectations. Kraft Heinz also raised the low end of its organic revenue outlook for the full 2026 year to -1.25% to -0.5%, up from a low end of -2% previously.

Earlier this year, Cahillane halted the company's plans to split into two entities, saying the food maker could be revitalized with a $700 million infusion into marketing, better deals and research and development.

Cahillane said Wednesday that market share, sales, and volume trends are improving in every region, compared with the previous year.

The net cash proceeds after taxes of the deal are expected to be around $500 million, which the company said will be used to pay down debt. Around 250 Kraft Heinz employees will transition with the coffee business, the company said.