Years of elevated food prices have changed the way Americans shop for groceries, forcing major food manufacturers to rethink how they compete for increasingly budget-conscious consumers.
For Kraft Heinz, the challenge is particularly significant. The company behind household names including Heinz, Kraft, Oscar Mayer, Velveeta, Philadelphia, Capri Sun and Maxwell House is trying to make its products more accessible without weakening the brand value that allows them to command higher prices than many store-brand alternatives.
Kraft Heinz CEO Steve Cahillane said the company is focusing on a combination of targeted promotions, selective price reductions and smaller package sizes as it responds to changing consumer behavior.
Private Labels Put Pressure on Big Brands
Inflation has encouraged more shoppers to compare prices closely, with many turning to private-label products offered by supermarkets. Research cited by McKinsey indicates that 85% of consumers now consider store-brand grocery products to be as good as, or better than, national brands.
That shift has increased the pressure on established food companies to demonstrate why shoppers should continue paying more for familiar brands.
Kraft Heinz recorded a decline in North American net sales in 2025 compared with the previous year, underscoring the difficulties facing the packaged-food sector.
Cahillane, who became CEO in January, has said the company cannot depend solely on brand recognition to retain customers.
Instead, Kraft Heinz is working to make its products fit more comfortably into household food budgets while maintaining the quality and identity associated with its major brands.
Promotions Become a Key Tool
One element of the strategy is more carefully timed promotions.
Kraft Heinz is working with retailers to offer discounts around the beginning of the month, when household budgets may have more room following paydays, benefit payments and monthly financial resets.
Consumer equity research analyst Erin Lash of Morningstar said promotions can encourage shoppers to make an initial purchase, particularly when consumers are carefully managing their grocery spending.
However, discounts also carry a risk. If shoppers become accustomed to buying a product only when it is on sale, frequent promotions may make it harder for a company to maintain demand at regular prices.
Mark Mayer, an Indiana University marketing professor and former Kraft Foods brand manager, has described promotions as potentially difficult to manage because consumers may delay purchases until discounts appear.
For Kraft Heinz, that makes the timing and depth of promotions important to its broader pricing strategy.
Selective Price Cuts Rather Than Across-the-Board Reductions
The company is not planning to reduce prices throughout its portfolio indiscriminately.
Cahillane said Kraft Heinz is instead looking for areas where economic conditions provide a stronger justification for lower prices.
Coffee is one example. The company’s portfolio includes brands such as Maxwell House and Gevalia, and declining global coffee prices have created greater room for adjustments in that category.
Benchmark coffee futures were down significantly from a year earlier as of Sept. 16, providing a different cost environment for coffee manufacturers and consumers.
Marketing experts note that established brands must be cautious when competing primarily on price. Deep or permanent price reductions can potentially change how consumers perceive a product, particularly when the brand has historically been positioned around quality, familiarity or reliability.
Smaller Packages Offer Another Affordable Option
Kraft Heinz is also turning to package sizes as a way to provide lower-cost purchase options.
Rather than simply reducing the amount of product inside an existing package, the company says it is introducing smaller formats for consumers who may not want or be able to afford larger quantities.
For example, shoppers who find a large ketchup bottle too expensive or unnecessary for their household may have the option of purchasing a smaller bottle at a lower upfront price.
Cahillane said the approach is intended to provide greater flexibility rather than simply reducing the amount of product sold at the same price.
Other major packaged-food manufacturers have also experimented with smaller packages as consumers look for ways to manage grocery bills without completely abandoning established brands.
The Challenge: Proving Value Beyond Price
The broader challenge for Kraft Heinz is balancing affordability with the premium associated with its well-known brands.
Lower prices may attract shoppers, but the company ultimately needs consumers to believe its products are worth purchasing even when no promotion is available.
Cahillane has emphasized that value involves more than a low price. In his view, consumers also consider product quality, consistency and whether a brand delivers what they expect when they make a purchase.
That means Kraft Heinz’s strategy is not simply about making food cheaper. The company is attempting to give consumers more ways to fit its products into their budgets while preserving the qualities that have helped its brands remain recognizable for generations.
As grocery shoppers continue to scrutinize prices, the results of that strategy could offer a broader indication of how legacy food brands can compete in a market where private labels are gaining greater acceptance.
