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Kraft and Heinz are merging to make a giant company with lots of food like this

Arteries of the world, prepare to get clogged.

Macaroni and cheese, in all its glory
Macaroni and cheese, in all its glory

US PROCESSED FOOD giants Kraft and Heinz are planning a merger which will create the fifth-largest food and drink company in the world.

The combined firm, imaginatively titled the Kraft Heinz Company, will have an annual turnover of about $28 billion after the deal brokered by billionaire investor Warren Buffett’s Berkshire Hathaway and a Brazilian company.

Both food companies have histories in the US stretching back over a century, but the merger comes as many producers struggle to keep up with customers’ tastes as the public appetite shifts away from junk food to healthier products.

In its home country, Kraft is known for making products like Macaroni & Cheese, Jell-O and Velveeta processed cheese.

Heinz is best-recognised for its famous tomato ketchup, one of the world’s highest-selling condiments, as well as its baked beans and baby foods.

Here’s how all those brands look together:


‘Pretty enduring’ tastes

Buffett, whose company has been investing in both firms for a while, said the tastes the companies appealed to were “pretty enduring”.

He told CNBC there was scope to expand company’s sales outside the US and Canada.

Hornets Cavaliers Basketball Billionaire investor Warren Buffett Source: Mark Duncan/AP/Press Association Images

Kraft spun off its global snacks business into Mondelez International in 2012 to focus on the US grocery market, with the new company taking brands like Cadbury, Trident gum and Oreo biscuits with it.

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Modelez, which recently announced it was cutting back its factory operations in Ireland, also supplies products like Kraft Philadelphia cream cheese in Europe.

Kraft shareholders will get a special windfall payment worth about $10 billion in return for taking a minority 49% stake in the combined company.

Kraft Velveeta Source: JeepersMedia

The merger announcement has already sparked fears of widespread job cuts in the US after the companies said they expected “synergies” worth up to $1.5 billion a year in annual savings from the deal.

The two companies currently employ nearly 29,000 people in North America.

- With AP

READ: Cadbury workers who lost their jobs to get help from government group >

READ: This man thinks there’s a big future in Irish beef jerky >

About the author:

Peter Bodkin  / Editor, Fora

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