This article examines the recent decline in Kraft Heinz (KHC) shares following revelations that Berkshire Hathaway might divest its significant ownership. This potential exit stems from expressed dissatisfaction by Warren Buffett, former CEO of Berkshire, regarding Kraft Heinz's strategy to split its business. The news has intensified investor apprehension, as the food giant has already struggled with its stock performance since its merger a decade ago, largely due to shifts in consumer preferences and heightened market competition. The impending split, intended to streamline operations, has failed to reassure stakeholders, highlighting deeper concerns about the company's long-term viability and strategic direction.
On a recent Wednesday, Kraft Heinz's stock experienced a 6% drop in value during afternoon trading. This downturn was triggered by a regulatory submission from the food conglomerate, revealing that Berkshire Hathaway (BRK.A, BRK.B) was considering selling up to 325,442,152 shares of common stock. This potential divestment underscores a growing rift between the two entities, particularly after Warren Buffett, who previously led Berkshire Hathaway and was a key figure in the Kraft Heinz merger, voiced his disapproval of the company's planned operational separation. His successor, Greg Abel, reportedly conveyed these concerns directly to Kraft Heinz's management, signaling a significant withdrawal of support from one of its most influential investors.
Berkshire Hathaway had already reduced the book value of its Kraft Heinz investment by approximately $3.8 billion after taxes in the second quarter of the previous year. As of September 30, 2025, Berkshire held a 27.5% stake in the company's outstanding common stock. This substantial holding, coupled with Buffett's legacy as a shrewd investor, means that any move by Berkshire to exit its position is viewed with serious concern by the broader market. The loss of such a prominent backer is expected to further erode investor confidence in Kraft Heinz, whose shares have depreciated by nearly 70% from their peak in 2017.
The current market sentiment reflects a prolonged period of underperformance for Kraft Heinz. The company, formed through a high-profile merger backed by Buffett, has grappled with an evolving consumer landscape and intense competitive pressures. Its struggle to adapt to changing tastes and market dynamics has consistently weighed on its stock. The decision to break up the business, anticipated to be finalized in the latter half of 2026, was framed by the company as a move towards greater efficiency and focus. However, this strategic shift has done little to invigorate investor enthusiasm. Analysts from Wall Street largely maintain a cautious stance, with five out of six tracked by Visible Alpha issuing neutral ratings, and one recommending a sell. This collective skepticism highlights the deep-seated challenges facing Kraft Heinz and the significant hurdles it must overcome to regain investor trust and market momentum.
The recent developments surrounding Kraft Heinz and Berkshire Hathaway signal a critical juncture for the food industry giant. The expressed disappointment from a seasoned investor like Warren Buffett, coupled with Berkshire Hathaway's potential large-scale stock divestiture, casts a long shadow over Kraft Heinz's future. The market's subdued reaction to the planned company split, marked by a significant share price drop and cautious analyst ratings, suggests that investors remain unconvinced by the proposed restructuring. This situation underscores the formidable task ahead for Kraft Heinz in navigating evolving consumer preferences and a competitive market, as it attempts to redefine its strategic path and restore shareholder value in the absence of a long-standing, influential supporter.
