The History Behind Kraft Heinz Co.

Kraft Heinz Company (KHC), now the fifth-largest food and beverage company in the world, is the result of decades of takeovers in a growth strategy that shows no signs of slowing down.

In 2017, the food products giant launched a $143 billion somewhat hostile bid for Unilever (UL) but eventually shelved that plan. Now with more than 200 household brands under its umbrella, Kraft Heinz has roots that date back to the late 1800s through its Pittsburgh-based Heinz line, and back to the early 1900s through its Chicago-based Kraft line. The two companies merged in 2015 in a massive deal spurred on by 3G Capital and Berkshire Hathaway after decades of absorbing brands like Nabisco, Post, and Oscar Mayer.

History Behind Kraft Heinz Co.

Investopedia / Sabrina Jiang

Who Owns Kraft Heinz Company?

Berkshire Hathaway holds the largest stake in Kraft Heinz, with a 26.65% stake and over 325 million shares. It is followed by minority holders including Vanguard, SSgA Funds Management, and BlackRock Fund Advisors with 4.49%, 2.5%, and 2.22% stakes, respectively.

Heinz Began With Ketchup

The H.J. Heinz Company was founded by American entrepreneur Henry John Heinz, son of German immigrants. He began a small food business with his brother and cousin in 1876. Heinz Tomato Ketchup was among the company’s first products, and it is now Heinz’s most iconic and eponymous brand, claiming more than 50% of the market share for ketchup in the U.S.

Heinz eventually bought out his partners and established the H. J. Heinz Co. in 1888. That company was incorporated in 1905 with Heinz serving as the first president, a position he held throughout his life as he built more than 20 processing plants throughout the country.

During the Great Depression in the 1930s, Heinz became a top-seller in ready-to-eat meals and baby food under the leadership of Howard Heinz, Henry Heinz's son. During World War II, Heinz provided food aid to the United Kingdom and then expanded its international presence with new plants in several countries in the post-war years.

Over the next few decades, Heinz continued to grow with brand acquisitions like Starkist Tuna and Ore-Ida until Berkshire Hathaway and 3G Capital bought the company for $23 billion in 2013. Two years later, the investors pursued the massive merger with Kraft Foods Group.

Kraft Started With Cheese

Kraft’s origins began with Canadian immigrant James L. Kraft, who started a wholesale door-to-door cheese business in Chicago with his brothers. They incorporated it in 1909. By 1914, J.L. Kraft and Bros. Company was selling 31 varieties of cheese, and in 1916 it patented a pasteurized processed cheese that gave cheese a longer shelf life.

Meanwhile, a company called National Dairy Products Corporation was aggressively acquiring dozens of small dairy products companies throughout the U.S. and eventually snapped up Kraft in 1930. National Dairy changed its name to Kraftco Corp. in 1969.

Phillip Morris Companies then acquired Kraft in 1988 after taking over General Foods in 1985. Philip Morris then acquired Nabisco Holdings in 2000 and integrated the companies into Kraft General Foods, which it began to sell off in 2007. Through the share sales, Kraft Foods Inc. became a fully independent public corporation.

As its own company, Kraft Foods continued an aggressive streak of mergers, buying French biscuit company Groupe Danone for $7 billion in 2007 and British candy company Cadbury for more than $19 billion in 2010. Then in 2012, Kraft Foods divided into two: a U.S. grocery products company called Kraft Foods Group Inc. and an international snacks company called Mondelez International.

Kraft Foods Group produced brands like Oscar Mayer, Oreo, Philadelphia cream cheese, Planters, and Maxwell House among many others. It was an independent public company listed on the Nasdaq exchange for about four years before merging with H.J. Heinz Company in 2015, creating the third-largest foods company in North America.

Today's Kraft Heinz Co. holds more than 200 iconic brands that together draw in about $25 billion in annual net sales. 

Article Sources
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  1. KraftHeinz. "Beloved Global Brands."

  2. Heinz History Center. "H.J. Heinz Company."

  3. Heinz History Center. "John Heinz and the Heinz Family."

  4. Businesswire. "Kraft Foods Announces Plans to Acquire Groupe Danone’s Global Biscuit Business."

  5. Kraft Foods Inc. "Kraft Foods Succeeds in Offer for Cadbury PLC."

  6. Kraft Foods Inc. "Kraft Foods Proposes Mondelez International, Inc. As New Name for Global Snacks Company."

  7. The Kraft Heinz Company. "The Kraft Heinz Company Announces Successful Completion of the Merger between Kraft Foods Group and H.J. Heinz Holding Corporation."

  8. The Kraft Heinz Company. "2019 Form 10-K," Page 21.

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