Unilever and Kraft Heinz recently concluded merger discussions aimed at combining their food brands, potentially creating a new entity valued in the tens of billions of dollars. The talks, which ended according to sources, centered on merging Unilever's food business with Kraft Heinz's condiments division, bringing together Heinz ketchup and Hellmann's mayonnaise. Both giants are grappling with declining packaged food sales as health-conscious consumers shift spending away from processed goods.

Unilever, under new CEO Fernando Fernández, has been gradually exiting its food business, planning to sell up to $1 billion in smaller brands, leaving its food division heavily reliant on Hellmann's and Knorr. Analysts value Unilever's standalone food business at $36-37 billion. Kraft Heinz, meanwhile, is undergoing a turnaround under Steve Cahillane, who halted a planned split to invest $600 million, focusing on organic growth.

The talks reflect the intense pressure on consumer goods companies to adapt to changing consumer preferences and optimize portfolios.