Why Big Food is reformulating growth not just recipes

Key takeaways:

• Big Food can no longer rely on pricing, portfolio reshuffles or scale alone to drive growth.
• Consumers are becoming more selective, forcing companies to prove value across every product and price point.
• Growth is no longer being unlocked through strategy shifts alone but rebuilt through deeper changes to portfolios, innovation and positioning.

Big Food isn’t short of activity right now but it’s not all forward momentum. In the space of a few quarters, companies have announced breakups, reversed them, sold off legacy assets, chased scale through acquisitions and, in some cases, quietly acknowledged they’ve lost ground. What once looked like disciplined portfolio management now feels more like an industry trying to steady itself in real time.

Few stories capture that better than Kraft Heinz. After months of planning to split into two businesses – one focused on grocery, the other on sauces and spreads – the company has paused the move altogether. The rethink follows missed expectations, continued market share pressure and a growing recognition that structural change alone won’t fix what’s happening underneath.

The shift comes under new CEO Steve Cahillane, who took over in January and has quickly moved to change direction. Rather than pushing ahead with a breakup, he’s refocusing on fixing the core business, signalling that the issues run deeper than organisational complexity.

“My number one priority is returning the business to profitable growth, which will require ensuring all resources are fully focused on the execution of our operating plan,” Cahillane said. “As a result, we believe it is prudent to pause work related to the separation.”

He’s also described many of the company’s challenges as “fixable and within our control”.

That’s a meaningful reversal. For years, ‘unlocking value’ was one of Big Food’s favourite phrases – a neat way of saying that a sprawling business would perform better once it had been carved up or simplified. Cahillane’s reset suggests something less comfortable: you can’t engineer your way out of weak brand momentum, thin innovation or consumer pushback on price.

Kraft Heinz is now committing around $600m to reinvest in its US business and lifting R&D spend by roughly 20% in 2026, with a renewed focus on product innovation, nutrition and value. It’s also acknowledged that pricing ran ahead of what consumers were willing to accept.

Is the ‘unlocking value’ playbook starting to fray?

If Kraft Heinz is one side of the story, Kellogg is the other.

The company split itself in two to unlock value – separating its faster-growing snacks arm from its slower cereal business. In theory, it made sense. In practice, both sides ended up being sold.

Kellanova, the snacks business, is being acquired by Mars in a deal worth around $36bn. WK Kellogg, focused on cereal, is being taken over by Ferrero. What was pitched as strategic clarity quickly became a staging post for consolidation.

It’s hard to ignore the message in that. For years, splitting companies was presented as a way to reveal hidden value. Now it increasingly looks like a way to prepare assets for sale. The value isn’t being unlocked so much as it’s being reassigned.

That shift is showing up across the sector. Portfolio reshaping hasn’t stopped, but it’s no longer being framed as a guaranteed path to growth. It’s a response to the fact that growth is harder to find in the first place.

At the same time, the industry’s other reliable lever – pricing – is losing its edge. For the past three years, price increases have carried the sector. Faced with inflation, companies pushed through successive rounds of hikes and, for a while, consumers absorbed them. Sales held up better than expected and margins stabilised.

But that strategy has limits, and those limits are now visible.

Kraft Heinz has acknowledged that it raised prices without delivering enough in return. PepsiCo has moved to rebalance its approach, cutting prices on some core US snack lines after sustained pushback. Mondelez has also pointed to the need to stabilise volumes after leaning heavily on pricing.

Campbell’s has faced a similar reckoning. The company recently cut its outlook after snack sales declined, with CEO Mick Beekhuizen pointing to slower-than-expected recovery and increased competition. More promotional activity and sharper pricing responses are now part of the playbook.

Manufacturers of chocolate goods are seeing a slightly different version of the same pressure. Cocoa costs remain elevated, pricing has risen and consumers are becoming more selective about when and how they indulge. Hershey has flagged softer demand, while Lindt has suggested that GLP-1 weight-loss drugs has shifted behaviour towards smaller, more premium purchases rather than reduce it outright.

That doesn’t point to a collapse in demand, but it does point to a more deliberate one.

This is where private label has gained real traction. It’s no longer just a cheaper alternative. In many categories, it’s a credible one, particularly when branded products struggle to justify the gap.

Pricing bought the industry time but it didn’t fix the underlying problem.

Growth is being rebuilt in a more complex, less predictable market

This isn’t about one company, or one set of results, but about the limits of a model that relied on steady volume, pricing power and the assumption that core categories would keep delivering.

General Mills offers a useful lens on how companies are navigating that shift. The group has reaffirmed its full-year outlook, with organic sales expected to range between down 1% and up 1%, even as volumes remain under pressure, particularly in North America retail.

Chairman and CEO Jeff Harmening has framed that performance as part of a planned reset rather than an unexpected slowdown. “We started the year expecting that our investments, divestitures, and unfavourable timing comparisons would drive declines in our sales and earnings results through our first three quarters, even as we improved our volume and market share,” he said.

That framing suggests weaker top-line performance isn’t necessarily being treated as failure, but as part of a broader transition – one where investment, portfolio reshaping and competitiveness take priority over short-term growth.

That kind of messaging is becoming more common. Companies are managing expectations while they reposition, even if that means accepting softer near-term performance.

In practice, that’s translating into more deliberate portfolio choices. Businesses are exiting lower-growth categories, doubling down on areas with clearer differentiation and placing more weight on innovation to drive future performance. General Mills, for example, has already stepped away from parts of dairy where margins were harder to sustain, while increasing its focus on new product development.

When a growing share of sales depends on products that don’t yet exist, it tells you something about the limits of what’s already on shelf – and about how much more work is now required to rebuild growth.

Even scale and global reach aren’t insulating companies from the same pressures around value, private label and shifting consumer habits. Grupo Bimbo, the world’s largest baking company, reported record annual sales, yet still saw North America sales decline on a constant-currency basis.

Regulation, health trends and geopolitics are tightening the pressure

Layered on top of all of this is a regulatory and geopolitical environment that’s becoming harder to navigate.

In the UK, new restrictions on advertising less healthy food and drink came into force in January, tightening how and where products can be promoted. In the US, pressure is building around ingredients, with companies moving to remove synthetic dyes and respond to evolving regulatory expectations and public health scrutiny. At the same time, the debate around ultra-processed foods (UPFs) continues to gather pace, shaping reformulation priorities whether companies like it or not. GLP-1 weight-loss drugs are adding another layer of complexity, reshaping consumption patterns as consumers eat less overall and favour smaller portions and higher-protein products.

Then there’s geopolitics. The Iran conflict has added fresh uncertainty to already fragile supply chains, with disruption to shipping routes through the Strait of Hormuz, rising oil prices and volatility in fertiliser markets all feeding into input costs. That lands just as companies are trying to move away from price-led growth.

Put all of that together and it’s clear the industry is moving into a very different phase.

For years, reformulation sat at the centre of the industry’s response to change. Less sugar, fewer additives, cleaner labels – all necessary. But reformulating products doesn’t answer a more difficult question: what happens when entire categories stop growing?

That’s the question Big Food is now working through. And the answer isn’t a single strategy but a series of choices about where to invest, where to pull back and where to start again.

What’s emerging is a more polarised market. At one end, private label continues to strengthen, offering credible quality at a lower price. At the other, premium and functional products are commanding higher margins with clearer differentiation. The middle ground is becoming harder to defend.

That raises the bar for manufacturers. Products need to deliver more – on taste, on nutrition, on value – and they need to do it consistently enough to justify their place in a tighter, more competitive basket.

That’s a more complex challenge than simply launching something new or tweaking a recipe.

Because Big Food isn’t just reformulating what goes into its products. It’s working out how to build growth in a market where fewer assumptions hold – and where the old playbook no longer guarantees results.