The market share for Kraft Macaroni & Cheese has been declining steadily over the past few years.
The Kraft Heinz Company is revamping several classic pantry staples that have been falling out of favor with consumers.
In the coming months, a new version of Kraft Macaroni & Cheese, fortified with added nutrients, will hit the market to directly challenge rapidly growing competitors. Capri Sun will reduce its sugar content and enter the highly competitive sports drink category. Kool-Aid will add electrolytes, positioning it as a direct competitor to brands like Liquid IV.
This modernization of its aging product portfolio signals a new strategic direction for the struggling company, following the cancellation of its planned spinoff in February. The food giant will also invest $600 million to boost sales of its core brands, which have been losing market share to trendier competitors and cheaper private-label products.
Caroline Blose, President of Kraft Heinz's Beverages, Desserts, and Meals business unit, stated that the decision to cancel the spinoff allowed the company to redirect these new funds into product development, thereby "refocusing all our energy on the present and doing a better job with the brands and products we already have."
She indicated that although development for these products had been ongoing for about a year, the redesigned food and beverage items "align perfectly with our future direction of continuous innovation and upgrading," supporting the company's transformation path after the spinoff was called off.
Leading this transformation is CEO Steve Cahillane, who took the helm in early 2026 after leading Kellogg's Company (later renamed Kellanova) for approximately eight years. In February, he stated that many of Kraft Heinz's "challenges are solvable and within our control," with the goal of returning the company to profitable growth.
Despite internal optimism at Kraft Heinz, TD Cowen analyst Rob Moskow believes that abandoning the spinoff plan indicates the company's "business situation is worse than initially thought."
He commented, "It was previously difficult to understand why certain brands were headed in certain directions; some categories simply didn't seem to fit their current positioning." He added that the company should focus more on value-for-money rather than solely on innovation.
Over the past month, the stock price of The Kraft Heinz Company (KHC) has fallen by approximately 10%.
**Macaroni Makeover**
A top priority for Kraft Heinz is revitalizing the Kraft Macaroni & Cheese brand. This pantry staple remains the leader in the boxed macaroni category, but sales have declined in recent years, with a significant loss of market share.
"They missed the opportunity as adults entered the category seeking higher protein and 'better-for-you' products," Moskow said.
The primary competitor is Goodles, a brand endorsed by Gal Gadot, which has been eroding Kraft's dominance since its 2021 launch. Consumers are drawn to its more nutritious formulation, offering roughly double the protein and fiber per serving compared to traditional Kraft macaroni. Goodles also features trendier flavors and has expanded into single-cup offerings.
The impact is significant: according to market research firm Numerator, by 2025, Goodles had captured 6% of the category's market share. Meanwhile, Kraft's share fell from 44.6% to 37% over the past seven years.
To counter this competition, Kraft will launch "PowerMac," containing 17 grams of protein and 6 grams of fiber per serving, putting it on par with Goodles. It will be priced at $2.99, approximately 80 cents cheaper than the competitor, and will come in a larger box.
In response, Goodles CEO Jen Zeszut stated that its higher price point is due to the use of "premium" ingredients but noted that major retailers often sell it for under $3.
The development of PowerMac took about a year. The protein and fiber come from macaroni made with peas and wheat, while the signature cheese powder formula remains unchanged. The company hopes this will attract new customers or win back lapsed ones.
Blose does not believe Kraft is too late to enter the "better-for-you" space, especially as demand for high-protein, high-fiber products continues to grow.
"I'm less concerned about being first and more concerned about being the best," she said.
PowerMac will be available on shelves in the coming weeks.
TD Cowen's Moskow is skeptical about PowerMac's success, noting that the "Kraft" brand is not traditionally associated with high-nutrition products in consumers' minds.
However, Blose is more optimistic. She pointed out that Kraft only launched a gluten-free version in 2020, relatively late to the market, yet it has now become the top-selling variety, outperforming private labels and Annie's.
She stated that sales for Kraft Macaroni & Cheese and its sister brand Velveeta are showing positive signs, but "they haven't met our expectations yet. We believe the several new products launching this year will provide a boost."
To that end, Kraft will also introduce a higher-priced boxed macaroni and cheese aimed at adults, named the "Restaurant Edition." It will feature premium flavors like Pesto Parmesan and Caramelized Onion, as well as unique pasta shapes like cavatappi.
**Focus on the Younger Demographic**
Two beloved childhood drink brands—Capri Sun and Kool-Aid—are also receiving renewed investment, with the target audience expanding to include older children and even adults.
According to Numerator data, over the past five years, both brands have gradually lost market share as parents shifted towards drinks with lower sugar or natural colors, with Coca-Cola's Honest Kids being a major beneficiary.
Consequently, Capri Sun will launch a "Hydrate" line this year, containing 50% less sugar than comparable sports drinks and fortified with vitamins and electrolytes. Blose said this product aims to replicate the success of last year's screw-top bottle launch, which has helped the brand achieve several consecutive quarters of growth.
The resealable bottle design has already enabled Capri Sun to enter 16,000 new retail outlets, primarily convenience stores. Unlike the pouches, the bottled version can be resealed, sold individually, and has attracted an older consumer base.
The 99-year-old powdered drink mix Kool-Aid is also being adapted for the modern market. The new version will include electrolytes and be priced lower than leading brands like Liquid IV and DripDrop.
Blose believes that maintaining the company as a whole, rather than splitting it up, will be more beneficial for Kraft Heinz in driving innovation.
"The business challenges we face are solvable," she said. "We know where the shortcomings are, and we know which growth drivers can be further amplified."
Moskow, however, is uncertain if these new products can turn the tide. He stated that a significant portion of Kraft Heinz's portfolio, including brands like Oscar Mayer and Lunchables, faces structural issues.
"Kraft is a collection of various brands. Some can indeed benefit from improved product quality and innovation, but for others, I doubt that continued investment will change consumer perception."
Comments