July 11 (Reuters) - Kraft Heinz (KHC.O) is studying a potential spin off of a large chunk of its grocery business, including many Kraft products, into a new entity that could be valued at as much as $20 billion on its own, a source familiar with the matter said on Friday.

The proposed separation would carve out several Kraft-branded products - primarily packaged meals, processed meats, and slower-moving grocery staples - into a new entity. The existing company would retain higher-growth categories such as condiments and sauces,

According to reports in the Wall Street Journal, Kraft Heinz is weighing up the possibility of creating a new entity for its grocery products business that could be valued at as much as $20 billion. This would leave Kraft Heinz to focus on the Heinz sauces and condiments portfolio.