Kraft Heinz considers divestment of Breakstone cottage cheese business

Kraft Heinz is considering the divestment of Breakstone’s sour cream and cottage cheese business.

The Royal Bank of Canada has been appointed to review options for Breakstone’s business, including its divestment.

The review comes as the firm is also considering the sale of its Maxwell House coffee business.

If the divestment of Breakstone proceeds, Breakstone could be worth around $400m. The business posted approximately $400m in revenue and $50m in earnings before interest, taxes, depreciation and amortisation.

An auction could attract the interest of dairy firms such as Saputo, Dairy Farmers of America and Dean Foods.

In 2018, Kraft Heinz announced the divestment of its Canadian natural cheese business to Italian dairy firm Parmalat for C$1.62bn ($1.23bn).

Dairy companies across the US are facing difficulties, with sales declining over recent years as consumers explore non-dairy alternatives, as well as a multi-year period of weak milk prices.

According to USDA figures, the country has a $1.4bn cheese surplus, while the sales of cottage cheese have declined significantly since the 1970s.

Kraft Heinz was created by 3G Capital and Berkshire Hathaway, which acquired HJ Heinz in 2013 and merged it with Kraft two years later.

The firm is looking at ridding its portfolio of brands that no longer are attractive to consumers.