Kraft Heinz is innovating its top brands to win consumers that have been sidelined by dietary restrictions or preferences.
Most recently, Kraft Heinz introduced a lactose-free version of Philadelphia cream cheese, a few years after launching a plant-based spread for vegans. It also has debuted a gluten-free offering of Velveeta Shells & Cheese and a plant-based version of its Kraft Mac & Cheese.
These innovations come as Kraft Heinz and other food giants respond to growing consumer interest in healthy or in-demand ingredients, in addition to less processed options.
Kraft Heinz has also launched offerings that address other trends infiltrating food. It has a Jell-O with no artificial colors or sweeteners, a Kraft Mac & Cheese with extra protein and Heinz Simply, a clean-label version of the popular ketchup using recognizable ingredients. More products are in the works.
“We're going to go aggressively attack those trends, making sure that we have the right product for those unmet needs,” said Jerome Drolet, Kraft Heinz’s new president of taste elevation.
Drolet didn’t quantify the sales potential, but he called the opportunities “significant” for Kraft Heinz, which posted $25 billion in net sales last year.
Similar to its competitors, Kraft Heinz has seen its business struggle as consumers cut back on highly processed food in favor of better-for-you offerings. Inflation has only exacerbated the challenges as shoppers curtail their spending.
Organic net sales have declined during the last two years, slipping 3.4% alone in 2025. There are signs of improvement at Kraft Heinz, however, with organic sales down 1.3% during its second quarter ended June 27.
The rollout of Philadelphia lactose-free cream cheese provides the latest example of how Kraft Heinz is approaching innovation of its core brands, a key pillar of the company's growth strategy.
As many as 50 million U.S. consumers are affected by the digestive condition, according to Kraft Heinz. The company found there weren’t other brands on the market that met the needs of lactose-intolerant consumers on a wide enough scale, creating an opportunity for its top-selling Philadelphia cream cheese.
The offering, the largest investment the company has made behind a brand innovation in three years, immediately makes Philadelphia accessible to millions of consumers who otherwise wouldn’t have purchased it for use in frostings, bagels and other foods.
Instead of launching an entirely new brand, Drolet said Kraft Heinz has devoted more attention to innovating its existing products that have already built up trust and recognition among shoppers and retailers.
Before entering a space, Kraft Heinz must determine whether the trend will last, which of its brands are best positioned to benefit, and whether the new innovation can reach enough consumers to justify the time and money required to develop and market it.
“In the end, we need to deliver for the business,” Drolet observed. “What we don't want … is consumers having to compromise, whether it's on price or on taste.”
While Kraft Heinz is prioritizing speedy innovation, it’s not worried if competitors beat the food behemoth to the market.
The food manufacturer noted that when it launched gluten-free Mac & Cheese in 2020, it was one of the last to enter the space as the company worked on perfecting the quality and ensuring it tasted like the traditional version of the product. Today, its Mac & Cheese is the top-selling gluten-free brand in the category.
The innovation comes as Kraft Heinz's new CEO Steve Cahillane announced plans earlier this month to increase spending to $700 million, up from $600 million. The investment will boost marketing, sales and research and development to improve “product superiority” in hopes of returning the company to growth.
So far, it appears the focus on innovation is paying off.
“We have seen that our brands respond well when we invest behind them,” Cahillane said in a statement. “By accelerating these investments, we position the business even more favorably as we enter 2027.”
Before the CPG veteran took over in January, Kraft Heinz set a goal to generate $2 billion in incremental net sales by 2027 through portfolio innovation. But Cahillane said product innovation had stagnated and was starved for needed resources.
Erin Lash, a senior director of consumer equity research at Morningstar, said as food companies work to ensure their products meet the needs of consumers, it’s a sound strategy to leverage familiar brands.
Other food makers have employed a similar approach, including Mondelēz sugar-free Oreos, Campbell's gluten-free soup and PepsiCo Cheetos and Doritos without artificial colors and flavors
“These are brands that are well known in the market and are trusted and familiar, and so tailoring their offerings to meet that regard is prudent,” said Lash.
Still, it isn’t enough to tap into the equity of an existing brand or simply slap a label like “gluten-free” on the product. Lash said food manufacturers need to carefully hone their marketing efforts to make sure they are reaching the right consumer and successfully convincing them that the new item is a better option.
