It was a mega-merger of iconic brands, supported by no less a genius than Warren Buffett. It was supposed to unlock value for investors and rethink how food would be consumed globally. But what if the unraveling of the Kraft-Heinz merger is actually a signal of a much more profound shift?
A Canary in the Coal Mine?
After a decade of wrestling with the effects of an ill-considered strategy, which I have written about before, the leadership at Kraft-Heinz has thrown in the towel. The company has announced that it intends to unwind its entanglements, as the Wall Street Journal notes, “one global company would focus on sauces, spreads and seasonings, while another would sell grocery staples in North America. The move aims to create businesses with more focus and less complexity, Kraft Heinz said, and deepens a reversal of the food industry’s yearslong strategy of pursuing deals to build scale.”
The Kraft Heinz breakup may well bode one of the most fundamental shifts in consumer behavior since the rise of the supermarket. Big Food, a model of 20th-century mass production efficiency, is cracking apart because the premise it was built on—that millions of people will want exactly the same thing—is dissolving before our eyes.
When Warren Buffett and 3G Capital orchestrated the 2015 Kraft Heinz merger, they were betting on scale. Bigger factories, longer production runs, more shelf space, cheaper per-unit costs. The industrial logic was impeccable: combine iconic brands under one roof, slash costs, and dominate supermarket aisles with products that could satisfy the least common denominator of taste preferences across America. After all, the company was over a hundred years old, baked into people’s habits and so beloved by some consumers that their brands were tattooed on their bodies.
But here’s what I think they missed: the least common denominator is fundamentally changing.
Consumers were shifting away from the kinds of highly processed packaged foods that Kraft sells, like Velveeta cheese and Kool-Aid. It further faced challenges distinguishing its products from cheaper store brands, with Heinz ketchup costing $2.98 versus Walmart’s brand at 98 cents. Costco, with its signature Kirkland brand does significantly more in revenue than all of Kraft Heinz’s brands put together. The mass market, as it has come to be known, was going to Costco and other in-store brands. The premium shopper, meanwhile, was shopping in the perimeter of the supermarket, ignoring the packaged and processed foods in the middle.
The Personalization Revolution Hits the Kitchen
We’re witnessing the early stages of what I call the Great Personalization—the shift from mass market consumption to individually tailored experiences. And food, surprisingly, is among the first industries feeling the full force of this transformation.
Think about how many people’s relationship with food has changed in the past decade. They’re not just buying “2 eggs over easy” any more—they’re buying keto-friendly, gluten-free, locally-sourced, organic, or plant-based breakfast that aligns with specific dietary philosophy, health goals, and ethical framework. The rise of meal kit services, specialty diet plans, and even personalized nutrition based on genetic testing all point to the same trend: consumers increasingly expect their food to be as unique as they are.
Kraft Heinz executives acknowledged that “the complexity of our business has impacted that ability to realize the full strength of our brands and operations” across “56 different product categories,” while facing “budget-conscious shoppers buying more store-brand packaged foods” and people “willing to spend extra often reaching for fresher alternatives to processed products.”
This is another reflection of what I call the “hourglass” effect where income inequality has hollowed out the middle bands of consumption. At the low end, customers are fair game for mass consumption. At the higher end, consumers are becoming pickier, expecting more tailored experiences and prepared to pay for them. The same demographic shift that doomed much of J. C. Penney’s is now showing up in the grocery aisles.
Local Food as the North Star
If you want to see where this is headed, look at the explosive growth of local food cultivation and distribution. Farmers markets, community-supported agriculture (CSA), urban farming, and “farm-to-table” restaurants aren’t just trendy lifestyle choices—they’re early indicators of a fundamental reorientation toward personalized, locally-adapted food systems.
Local food represents everything mass market food is not: seasonal rather than standardized, regionally-specific rather than universal, relationship-based rather than brand-driven, and inherently limited in scale. When someone buys tomatoes from their local farmer, they’re not just purchasing produce—they’re buying into a completely different value system that prioritizes freshness, sustainability, community connection, and individual choice over efficiency and scale.
As Carlota Perez has long pointed out, these are lifestyle choices that represent aspirational conditions for the elite right now, but that are likely to shift the culture in their direction as the meaning of a good life gets redefined.
The Technology Accelerant
What makes this shift different from past food movements is the underlying technology infrastructure that can now support mass personalization. The same digital platforms that enable Uber to match you with the right driver at the right time can connect you with local producers, customize meal plans based on your preferences and restrictions, or even enable vertical farms to grow precisely the varieties you want in your neighborhood.
We’re moving toward a world where “local” doesn’t mean “small-scale” in terms of impact—it means “personally relevant” at unprecedented scale. Imagine a network of urban farms using AI to optimize crop selection based on hyper-local demand patterns, or meal services that adjust recipes in real-time based on individual health data and taste preferences.
The same forces driving food personalization are rippling through retail (mass merchants losing to specialty and direct-to-consumer brands), media (network television fragmenting into streaming niches), and even transportation (private car ownership giving way to on-demand mobility services). The pattern is consistent: mass market solutions optimized for the average customer are losing to personalized solutions optimized for individual needs.
The Strategic Imperative
As Kraft Heinz executives noted, the “complexity of our current structure makes it challenging to allocate capital effectively, prioritize initiatives and drive scale in our most promising areas.” This isn’t just a problem for Kraft Heinz—it’s the central challenge facing every organization built for the mass market era.
The companies that will thrive in the next decade won’t be those that can serve everyone adequately, but those that can serve specific someones exceptionally well. They’ll need to develop what I call “personalization at scale”—the ability to deliver customized experiences while maintaining the economic benefits of efficient operations.
The great unraveling of Big Food isn’t an ending—it’s a beginning. It’s the start of a food system that treats you not as a demographic segment, but as an individual with unique needs, preferences, and values. And if that transformation can happen to something as established as Heinz ketchup and Kraft Mac & Cheese, it can happen to anything.
The question isn’t whether your industry will experience its own version of the Kraft Heinz breakup. The question is whether you’ll be ready when it does.