Kraft Heinz (NASDAQ:KHC) expects organic net sales to be relatively flat in 2027 as it continues a turnaround built on higher investment in marketing, product development and innovation. The company anticipates a return to sales and profit growth in the second half of the year, followed by more consistent growth in 2028.
At the company’s 2026 Investor Day, CEO Steve Cahillane said Kraft Heinz had underinvested in its brands, fallen behind consumers on innovation and lost distribution. The company has added more than $700 million in investment this year and plans to maintain that spending level in 2027, while shifting funds toward initiatives that deliver stronger returns.
“Recoveries are not always linear, and not every action will work exactly as we intended,” Cahillane said. He added that the company is seeing early improvements in market share and volume trends, though its U.S. retail recovery will take more time.
2027 outlook and investment plans
Chief Financial Officer Andre Maciel said Kraft Heinz expects adjusted operating income to decline by a low-single-digit percentage on an organic basis for the full year in 2027. The company expects a pressured first half, primarily because of inflation, before growth returns in the second half.
Maciel said an anticipated mid-2027 closing of the North American coffee divestiture would add a 150- to 200-basis-point headwind to the full-year adjusted operating income outlook. He said the company would provide formal guidance on its fourth-quarter earnings call.
Kraft Heinz expects inflation to be slightly above 5% in 2027, with the greatest pressure in the first half. It plans to price for a portion of that inflation and expects adjusted gross profit margin to be temporarily pressured because pricing follows cost increases with a lag.
For 2028, management expects consistent top-line growth and margin expansion. Cahillane said the company was not providing an exact long-term financial algorithm, preferring to demonstrate progress against its milestones first.
Of the incremental $700 million invested in 2026, approximately $325 million is going to marketing, $250 million to price, $75 million to commercial talent and $50 million to product and packaging improvements, Maciel said.
Not every investment has produced the desired result. Maciel said a price investment in Philadelphia cream cheese did not generate the expected incremental volume, prompting the company to reallocate funds. In response to an analyst’s question, he said approximately 30% of investment in U.S. retail, in aggregate, had not delivered the trend improvement Kraft Heinz expected.
Innovation and regional growth
Chief Growth Officer Diana Frost said innovation had historically been the largest driver of Kraft Heinz’s share losses against competitors. On a three-year rolling basis, the company expects U.S. retail innovation to rise from about 3% of net sales to 5% in 2027 and 6% to 8% in 2028.
The pipeline includes products focused on protein, hydration, simpler ingredients and convenience. Frost said nearly half of new products will address health and wellness needs. She also said about half of tested global net sales currently meet the company’s product-superiority standard, with more than 70% expected to meet it by the end of 2027.
North America President Nico Amaya said the region lost 230 basis points of share from 2022 to 2025, as weaker product velocity and insufficient innovation contributed to lost distribution. He said U.S. consumption trends had improved by 250 basis points versus the prior year, while Canada had grown for 11 consecutive quarters.
Emerging markets remain a growth priority. Regional President Marcel Regis said organic net sales in the $2.5 billion business rose 10% year to date, including 15.6% growth in the third quarter. The company is focusing on Heinz, mayonnaise, away-from-home sales and expanded distribution in the region.
Productivity, cash and portfolio
Global Chief Procurement and Supply Chain Officer Janelle Aydin said Kraft Heinz is on track to exceed its target of unlocking $2.5 billion in productivity by the end of 2026. The company expects to generate annual gross efficiencies above 4% of cost of goods through measures spanning manufacturing, logistics, procurement and shared services.
Maciel said Kraft Heinz expects to end 2026 with net leverage between 3.2 and 3.3 times, with a path toward its target of approximately three times. He said the company expects roughly $500 million in excess cash after dividends in 2027 and believes it can manage its rising payout ratio by growing cash rather than cutting the dividend.
The company also plans to continue evaluating its portfolio. Cahillane said Kraft Heinz agreed to sell its North American coffee business because it did not see the same opportunity to invest in and win with those brands as it did elsewhere. Kraft Heinz will retain a 30% ownership stake, he said.
About Kraft Heinz (NASDAQ:KHC)
The Kraft Heinz Company (NASDAQ: KHC) manufactures and markets food and beverage products for consumers, retailers and food-service businesses. Its portfolio includes condiments and sauces, cheese and dairy products, packaged meals, meats, snacks and beverages, sold under brands such as Heinz, Kraft, Oscar Mayer and Philadelphia. The company was formed in 2015 through the merger of Kraft Foods Group and H.J. Heinz Company. It serves customers in the United States and other markets around the world, with its business spanning North America and international regions.
