The Kraft Heinz Company’s divestiture of its Italian infant and specialty food business to NewPrinces Group represents a significant strategic realignment within the European food sector. Announced on July 10, 2025, this transaction includes iconic brands Plasmon, Nipiol, Dieterba, Aproten, and Biaglut, alongside a production facility in Latina, Italy, for an enterprise value of €120 million ($140 million)[6][16]. The deal exemplifies Kraft Heinz’s disciplined portfolio optimization under its “Accelerate” strategy, redirecting capital toward core taste elevation platforms like Heinz ketchup and sauces[3][8][13]. For NewPrinces—rebranded after acquiring Princes Limited in 2024—this acquisition strengthens its specialized nutrition segment and expands production capabilities in a declining Italian baby food market projected to shrink at a -2.12% CAGR through 2032[12][14][15]. The transaction, expected to close by December 2025 pending regulatory approvals, includes union consultations and preserves 300 manufacturing jobs at the Latina facility, which produces 1.8 billion biscuits annually[5][7][8]. This analysis examines the strategic drivers, market implications, and financial rationale behind one of 2025’s notable European food sector transactions.
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Transaction Architecture and Financial Framework
Deal Structure and Asset Transfer
The transaction encompasses a comprehensive transfer of Kraft Heinz’s non-core Italian assets, including five established brands across two distinct categories. Infant nutrition brands Plasmon, Nipiol, and Dieterba—representing over a century of market presence in Italy—are complemented by specialty food lines Aproten (low-protein foods) and Biaglut (gluten-free products)[3][7][10]. Crucially, the agreement includes Kraft Heinz’s 300-employee manufacturing facility in Latina, Lazio, which produces approximately 1.8 billion Plasmon-branded biscuits annually[5][8][16]. The facility will continue operating under NewPrinces ownership through a co-packing arrangement for Heinz baby food in the UK market, preserving operational continuity[6]. Financial terms remain officially undisclosed, though NewPrinces regulatory filings confirm an enterprise value of €120 million ($140 million) for assets generating €170 million in 2024 revenue with €17 million core profit[16]. This valuation reflects a 7.1x EBITDA multiple, aligning with specialty food sector benchmarks despite the declining Italian baby food market[12][16].
Timeline and Contingencies
The proposed closing date of December 2025 is contingent upon three critical milestones: Italian regulatory approvals, completion of mandatory union consultations under local labor laws, and final due diligence verifications[1][5][8]. Kraft Heinz has initiated the 60-day consultation period with Italian trade unions, a standard requirement for manufacturing divestitures affecting workforce continuity[4][8]. Both parties retain termination rights should antitrust concerns emerge, though industry analysts consider such risks minimal given NewPrinces’ existing market share below dominance thresholds[6][11]. Post-closing integration plans include NewPrinces’ commitment to retain all 300 Latina employees while investing in production line upgrades for pouch packaging and snack formats—technological enhancements previously deferred under Kraft Heinz’s capital allocation priorities[6][7].
Strategic Imperatives for Kraft Heinz
Portfolio Rationalization Under Accelerate Strategy
This divestiture exemplifies Kraft Heinz’s systematic portfolio optimization initiated under CEO Carlos Abrams-Rivera, who has prioritized “Accelerate Platforms” generating sustainable growth above corporate averages[13]. The Italian infant/specialty segment—contributing less than 0.65% to Kraft Heinz’s $26 billion global revenue—diverged from core taste elevation categories like ketchup, sauces, and condiments where the company holds #1 or #2 market positions[8][13]. By exiting this non-strategic segment, Kraft Heinz liberates approximately $50 million in annual capital expenditure and R&D resources for reinvestment into innovation pipelines for core brands, including the $3 billion U.S. manufacturing modernization program and synthetic dye elimination initiative[10][13]. The transaction aligns with the company’s May 2025 statement regarding “strategic transactions to unlock shareholder value,” signaling proactive portfolio management amid stagnant organic growth in developed markets[4][10].
European Market Repositioning
Europe represents Kraft Heinz’s most challenging region, with the divestiture enabling sharper focus on high-potential categories. Post-transaction, Kraft Heinz Italia will concentrate exclusively on expanding Heinz-branded taste elevation products, which have achieved consistent market share gains in retail and foodservice channels despite overall sector headwinds[8][13]. The company’s Italian subsidiary will redirect commercial resources toward pasta sauces and culinary products—categories where innovation-driven premiumization opportunities offset private label encroachment[3][13]. This market-specific realignment mirrors Kraft Heinz’s broader European strategy of pruning subscale local brands while scaling global power brands through innovation, evidenced by recent 12% compound growth in Heinz Tomato Ketchup variants across the region[8][13].
NewPrinces Group: Strategic Expansion Blueprint
Vertical Integration in Specialized Nutrition
For NewPrinces Group—formerly Newlat Food until its 2024 rebranding—this acquisition advances its ambition to dominate specialized nutrition categories across Europe[6][11]. The Plasmon portfolio immediately establishes NewPrinces as Italy’s #2 baby food player with 18% market share, complementing its existing pediatric nutrition lines[11][15]. Manufacturing integration presents significant synergies: NewPrinces can leverage Latina’s biscuit production capacity for its UK brands like Branston, while transferring proprietary gluten-free technologies from its BiAglut line to NewPrinces’ existing facilities[6][14]. The transaction accelerates NewPrinces’ five-year specialization strategy, which has seen over €400 million invested in high-margin functional nutrition segments since 2020, including 2023’s acquisition of German medical nutrition producer Nutricia[11][14].
Internationalization and Cross-Border Synergies
NewPrinces will deploy Plasmon as its flagship infant nutrition brand across 60+ markets, leveraging existing distribution networks from recent acquisitions[6][14]. The UK represents the primary growth vector, where NewPrinces can integrate Plasmon into Princes Limited’s supermarket relationships, targeting distribution through Tesco, Sainsbury’s, and Asda within 18 months post-closing[6][11]. Cross-border production optimization is equally strategic: NewPrinces will shift Aproten manufacturing from Latina to its lower-cost Polish facility, while utilizing spare German capacity for Dieterba export production—projected to yield €15 million in annual supply chain savings by 2027[6][14]. Chairman Angelo Mastrolia emphasizes that this acquisition fulfills NewPrinces’ vision of creating an “Italian multinational that gives new life to beloved national brands,” enhancing both operational flexibility and national identity[6].
Market Dynamics: Italian Baby Food Sector
Demographic Headwinds and Category Shifts
The transaction occurs against a backdrop of structural decline in Italy’s baby food market, where retail volume is projected to decrease at a -1.39% CAGR through 2032[12]. Italy’s birth rate—among Europe’s lowest at 1.24 births per woman—reflects economic uncertainty, high child-rearing costs, and delayed family formation, particularly among university-educated demographics[12][15]. Consequently, the market value is expected to contract from $894.54 million (2024) to $734.62 million by 2032, with volume declining from 72.3 kilotons to 63.05 kilotons[12]. Within this shrinking market, premiumization trends create opportunity: organic and clean-label products now comprise 38% of value despite representing only 22% of volume, explaining NewPrinces’ focus on Plasmon’s high-margin biscuit segment[15][16].
Competitive Landscape Reshuffle
NewPrinces’ acquisition disrupts Italy’s historically concentrated baby food sector, where Nestlé (31% share), HiPP (22%), and Danone (18%) previously dominated[15]. Plasmon’s integration immediately positions NewPrinces as the #4 player with 12% value share, threatening Humana’s position through distribution advantages in pharmacy channels[15]. Private label penetration remains limited at 11%—below the European average—due to strong brand loyalty in infant nutrition, though discounters are gaining traction with premium private labels priced 25% below branded equivalents[12][15]. Regulatory factors further influence competition: Italy’s stringent marketing regulations for infant products create barriers for new entrants while favoring established brands like Plasmon with 130 years of market presence[6][15].
Operational Integration and Labor Implications
Manufacturing Optimization
The Latina facility’s integration into NewPrinces’ operational ecosystem presents both challenges and synergies. The plant’s annual capacity of 1.8 billion biscuits currently operates at 76% utilization, leaving immediate upside for NewPrinces to redirect production from third-party contractors[5][8]. Planned investments include €8 million for pouch-filling lines (enabling entry into the €120 million Italian baby snacks category) and €4 million for gluten-free certification upgrades to expand Biaglut exports[6][16]. Workforce integration will follow NewPrinces’ standardized post-acquisition protocol: all 300 employees transition with existing collective bargaining agreements, while management implements a 90-day operational assessment before potential restructuring[6][8]. The co-packing arrangement for UK Heinz products provides immediate revenue stability during the transition, though NewPrinces plans to phase this lower-margin business out by 2027[6].
Supply Chain Restructuring
NewPrinces will integrate the acquired brands into its global supply network spanning 31 production sites across seven countries[11]. Raw material sourcing will shift from Kraft Heinz’s centralized procurement to NewPrinces’ dedicated organic farming partnerships in Poland and Italy, projected to reduce ingredient costs by 14% through direct contracts[11][14]. Logistics optimization presents the most significant synergy: NewPrinces will consolidate Plasmon distribution through its existing refrigerated network serving 30,000 European retail points, eliminating redundant third-party logistics contracts that consumed 8.2% of segment revenue under Kraft Heinz[6][14]. These operational enhancements align with NewPrinces’ demonstrated post-acquisition integration capabilities, evidenced by the 19% EBITDA margin expansion achieved at Princes Limited within 12 months of acquisition[14].
Regulatory and Stakeholder Considerations
Antitrust and Regulatory Pathway
The transaction faces minimal antitrust hurdles despite Italy’s active competition regulation. NewPrinces’ post-acquisition baby food market share remains below the 30% threshold triggering mandatory EU merger reviews, while Kraft Heinz retains no competing products in the category[6][
Sources
https://www.foodprocessing.com/business-of-food-beverage/mergers-acquisitions/news/55302581/kraft-heinz-selling-italian-baby-and-specialty-food-business, http://www.foodprocessing.com/business-of-food-beverage/mergers-acquisitions/news/55302581/kraft-heinz-selling-italian-baby-and-specialty-food-business, https://www.foodingredientsfirst.com/news/kraft-heinz-italian-food-division-sale.html, https://www.investing.com/news/company-news/kraft-heinz-to-sell-italian-infant-food-business-to-newprinces-93CH-4129097, https://www.foodbusinessnews.net/articles/28608-kraft-heinz-selling-infant-food-business-in-italy, https://www.just-food.com/news/newprinces-kraft-heinz-baby-food/, https://www.foodnavigator.com/Article/2025/07/10/kraft-heinz-announces-major-sale/, https://news.kraftheinzcompany.com/press-releases-details/2025/Kraft-Heinz-Announces-Agreement-to-Sell-Italian-Baby-and-Specialty-Food-Business-to-Italys-NewPrinces-Group/default.aspx, https://news.kraftheinzcompany.com/press-releases/default.aspx, https://www.benzinga.com/markets/asset-sales/25/07/46337777/kraft-heinz-sells-italian-infant-food-business, https://leadiq.com/c/newprinces-group/5e4fcd1d626d3b6fe085a52e, https://www.inkwoodresearch.com/reports/italy-baby-food-products-market/, https://www.dairyprocessing.com/articles/3090-kraft-heinz-prioritizing-innovation, https://www.newprinces.it/en/investor-center/investor-relations/why-invest-in-newprinces, https://www.globaldata.com/store/report/italy-baby-food-market-analysis/, https://www.foodbusinessmea.com/kraft-heinz-to-divest-infant-specialty-food-unit-in-italy-to-newprinces-at-us140m-valuation/
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