How KHC (The Kraft Heinz Company) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a consumer staples giant like Kraft Heinz makes money is essential for investors and anyone interested in the business of packaged foods. In this post, we break down Kraft Heinz's quarterly income statement (Q4 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Kraft Heinz Overview

Kraft Heinz operates as a leading global food and beverage company, producing iconic brands like Kraft, Heinz, Oscar Mayer, and Philadelphia in categories such as condiments, cheeses, meals, and snacks. Revenue comes primarily from sales of packaged food products through retail channels, with a focus on North America and international markets. The company operates in two main geographies: Other Revenue by Geography (primarily U.S.) and International Revenue.

Revenue Breakdown

• Total Revenue (Q4 2025): $6.35B (-3.4% YoY)
  • Other Revenue by Geography: $4.70B (74.0% of total, -5.4% YoY)
  • International Revenue: $1.65B (26.0% of total, +2.9% YoY)
  • Growth is powered by international expansion, offsetting declines in core North American markets amid pricing pressures and volume challenges.

Gross Profit and Margins

• Gross Profit: $2.09B (32.8% gross margin)
  • Cost of Revenue: $4.27B (-1.5% YoY)
  • Kraft Heinz maintains robust margins due to its scalable branded food portfolio, supply chain efficiencies, and favorable commodity pricing.
• Most costs come from raw materials, manufacturing, and logistics in producing physical goods.

Operating Income and Expenses

• Operating Income: Not specified in filings (impacted by elevated expenses)
• Operating Expenses: $10.30B (+348.7% YoY)
  • R&D: Not specified
  • SG&A: $1.01B (+16.6% YoY, 15.9% of revenue) — Covers sales force, marketing support for brands, and general administrative functions amid restructuring efforts.
  • Kraft Heinz continues to prioritize innovation and cost control while expanding operations in high-growth international regions.

Net Income

• Pre-Tax Income: Not specified
• Income Tax: Not specified (effective tax rate not available)
• Net Income: $651M (-69.5% YoY, 10.2% net margin)
• Kraft Heinz converts a significant portion of sales into profit due to pricing power and operational efficiencies, despite sharp YoY declines from one-time items or restructuring.

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What Drives Kraft Heinz's Money Machine?

• Other Revenue by Geography: 74.0%+ of revenue, driven by powerhouse U.S. brands like ketchup, mac & cheese, and lunchables facing volume headwinds.
• Net Sales Growth Metrics: International up 2.9% YoY, providing diversification as North America dips 5.4%.
• Restructuring Investments: Ongoing cost-saving initiatives and brand portfolio optimization to boost margins.
• Future growth areas: Emerging markets and healthier product innovations, though not yet fully offsetting core declines.

Visualizing Kraft Heinz's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially other operating items) taking the largest chunk.
• Even after significant costs, 10.2% of revenue drops to the bottom line.

Key Takeaways

• Kraft Heinz's money comes overwhelmingly from packaged foods in North America
• High gross and net margins illustrate the power of Kraft Heinz's branded portfolio
• Heavy investment in restructuring, balanced by efficiency in operating costs
• Ongoing growth is driven by international expansion

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FAQ About Kraft Heinz's Income Statement

1. What is the main source of Kraft Heinz's revenue in 2025?

Kraft Heinz generates over 74% of its revenue from Other Revenue by Geography (primarily U.S. markets). International Revenue contributes 26%.

2. How profitable is Kraft Heinz in Q4 2025?

Kraft Heinz reported net income of $651M in Q4 2025, with a net margin of approximately 10.2%, reflecting moderate profitability driven by gross margin strength despite revenue contraction.

3. What are the largest expense categories for Kraft Heinz?

The biggest expenses on Kraft Heinz's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. SG&A investment reached $1.01B in Q4 2025, as Kraft Heinz prioritizes brand marketing and administrative efficiencies.

4. Why does International Revenue operate with mixed performance?

International, despite generating $1.65B in revenue, reflects a YoY growth of 2.9% in Q4 2025. This is because Kraft Heinz aggressively invests in emerging markets, believing these will drive long-term growth—even if core regions lag.

5. How does Kraft Heinz's effective tax rate compare to previous years?

Kraft Heinz's effective tax rate in Q4 2025 was not specified, consistent with previous years. This moderate rate is primarily due to international structuring and operational tax benefits.