Kraft Heinz’s post-split future: More protein, less sugar

By Jordan Valinsky, CNN

New York (CNN) — Kraft Heinz is reinventing some of its well-known pantry staples that have fallen out of favor with consumer tastes.

In the coming months, a new version of Kraft Mac & Cheese bolstered with nutrients is rolling out to a rival, fast-growing competitor; Capri Sun is cutting sugar and entering the competitive sports drinks category; and Kool-Aid is being enhanced with electrolytes to take on Liquid IV.

Modern makeovers of Kraft Heinz’s aging products signal a new direction for the struggling business after scrapping a planned breakup in February. The food conglomerate is also investing $600 million to spur sales of its top brands that have lost market share to trendier competitors and cheaper private labels.

That decision has allowed Kraft Heinz to use the new investment to develop products so it can “refocus the full attention of the company on delivering right now for the brands and products we have,” said Caroline Boulos, Kraft Heinz’s president of hydration, desserts and meals.

Although the lineup has been in development for the past year, the reimagined food and drinks are “very much in the direction that we want to continue to innovate and evolve” as the company navigates it post-split future, she told CNN.

Spearheading the journey is CEO Steve Cahillane, who took over at the beginning of 2026 after running Kellogg Company (and later Kellanova) for about eight years. He said in February that many of Kraft Heinz’s “challenges are fixable and within our control” and aims to return the company to profitable growth.

Despite Kraft Heinz’s optimism, abandoning the split indicated to TD Cowen analyst Rob Moskow that the “business is worse shape than originally expected.”

“It was hard to make sense of why certain brands went in certain directions and that some of these categories didn’t seem to belong where they had been put,” he told CNN, adding that the company should focus on affordability rather than innovation.

Shares of Kraft Heinz (KHC) have declined about 10% over the past month.

Macaroni makeover

The first order of business for Kraft Heinz is fixing its Kraft Mac & Cheese brand. The pantry item remains the leader within the boxed category, but has seen its sales slip and market share sharply decline in recent years.

“They were unable to capitalize on adults entering the category and seeking out higher protein and ‘better-for-you’ options,” Moskow said.

The main culprit is Goodles, the Gal Gadot-backed brand that has eaten away at Kraft’s dominance since its 2021 debut. Shoppers have gravitated toward its nutritious offering, which has about double the amount of protein and fiber per serving compared to traditional Kraft Mac & Cheese. Goodles has also launched trendier flavors and expanded into single-serve cups.

The results have paid off: Goodles controls 6% of the category as of 2025, while Kraft’s market share has declined from 44.6% to 37% over the past 7 years, according to research firm Numerator.

To combat that, Kraft is releasing PowerMac, which has 17 grams of protein and 6 grams of fiber per serving — roughly matching Goodles’ — but sold for $2.99, undercutting its competitors’ price by about 80 cents. It’s also sold in a bigger box than Goodles.

In response, Goodles CEO Jen Zeszut told CNN the higher price is because the company uses “premium” ingredients but noted that major retailers often sell boxes for under $3.

Developing PowerMac took Kraft about a year with the protein and fiber originating from the pea- and wheat-based noodle, while the signature powdered cheese remains the same. The company hopes it attracts new or lapsed customers.

Boulos doesn’t think Kraft is too late entering the “better-for-you” space, especially as the appetite for more protein and fiber keeps growing.

“I am less concerned about being first and I’m more concerned about being the best,” she said.

TD Cowen’s Moskow is dubious that PowerMac will be successful since offering nutritional-packed products is not how shoppers “perceive the Kraft name.”

Boulos, however, is more optimistic. She said the brand was late introducing its gluten-free offering in 2020, but it’s now the number-one selling version, beating private labels and Annie’s.

She said that sales of Kraft Mac & Cheese and sister brand Velveeta are showing promise, but “not yet where we want to be and think that some of the new innovation we’re launching this year is going to help.”

To that end, Kraft is targeting adults with a new, premium-priced, boxed macaroni and cheese dubbed “Restaurant Edition.” The product is made with upscale flavors, like pesto parmesan and caramelized onion, as well as different pasta shapes, such as cavatappi.

Focus on kids

Two beloved childhood drink brands — Capri Sun and Kool-Aid — are also seeing reinvestment, with the aim of targeting older kids and even adults.

Both brands have gradually lost market share over the past five years as parents shift to drinks with reduced sugar or natural coloring, according to Numerator. Coca-Cola-owned Honest Kids is the biggest beneficiary.

So, coming this year is Capri Sun Hydrate, which has 50% less sugar than similar sports drinks and added vitamins and electrolytes. The drink hopes to replicate the success of its twist-off bottles, which launched last year, and is helping the brand achieve several consecutive quarters of growth, said Boulos.

The addition of resealable bottles has helped Capri Sun expand into 16,000 new locations, largely convenience stores. Unlike pouches, the bottles can be closed, sold individually and are attracting older consumers.

Kool-Aid, the 99-year-old powdered drink mix, is also soon getting a makeover fit for the modern era, with a new version that adds in electrolytes and is priced lower than dominant brands like Liquid IV or DripDrop.

Boulos thinks that remaining a single company will help spur innovation at Kraft Heinz.

“We have business problems that are addressable,” she said. “We know where our leaky buckets are. We know where we have momentum that we can accelerate.”

For Moskow, he’s uncertain these new products will turn the tide. He said a significant percentage of Kraft Heinz’s brands, like Oscar Mayer and Lunchables, are structurally challenged.

“Kraft is a mishmosh of brands, some of which can benefit from better innovation into product quality, but others that I question whether putting more money into them will improve consumer perception,” he said.

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