The news: After unexpectedly scrapping plans to split into two companies, Kraft Heinz is pivoting toward product innovation by offering “better-for-you” versions of some of its most iconic brands as it looks to reignite growth.

• The company next month will launch two flavors of PowerMac, a version of Kraft Mac & Cheese with 17 grams of protein and 6 grams of fiber per serving.
• It also plans to introduce a snack-size version of Lunchables and a low-sugar Capri Sun hydration drink with added electrolytes, per Bloomberg.

Why this is happening: Kraft Heinz aims to modernize legacy brands and differentiate them from private labels and better-for-you upstarts.

The timing makes sense. While many consumers are trading down amid budget pressure, a sizable segment remains willing to spend on health and wellness. In a January CivicScience survey, half of consumers who planned to increase spending in the category said they intended to focus on healthy groceries this year, nearly double the share who pointed to beauty and longevity (26%).

By adding protein and fiber and cutting sugar in products shoppers already know, Kraft Heinz is refreshing its pantry staples without abandoning the strong brand equity that made them household names.

Implications for brands: Consumers continue to say they want healthier food options—even as they remain price-sensitive—which helps explain why Kraft Heinz is leaning into higher-protein, higher-fiber, and lower-sugar versions of its legacy products. However, there are hurdles.

It’s already late to the game. With PowerMac, Kraft Heinz is entering a space that better-for-you challengers like Goodles and Annie’s have occupied for years. Goodles, which offers 14 grams of protein and 6 grams of fiber per serving, has been on the market since 2021. General Mills-owned Annie’s launched Super! Mac, a high-protein mac and cheese with 15 grams of protein and 6 grams of fiber, in April 2024. In other words, Kraft Heinz is playing catch-up.

There’s also a broader perception challenge. Even reformulated, these products are still processed foods at a time when some consumers are gravitating toward fresher, less-processed options and policymakers are looking to potentially define and label “ultra-processed” foods.

However, it’s better to be late to the game then not play at all. Offering healthier options should help Kraft Heinz protect share, stay relevant, and give shoppers one more reason to keep its products in their carts.