Buffett Breaks Silence on Kraft Heinz, Reveals Frustration Over Strategic Direction
In an uncommon public critique, Warren Buffett, the typically reticent Berkshire Hathaway chairman, voiced clear dissatisfaction with Kraft Heinz’s recent business decisions. The remarks came amid Kraft Heinz’s announcement of a corporate split expected to incur $300 million in additional overhead costs over the next year—an expense Buffett views skeptically.
Following Buffett’s comments early Tuesday, Kraft Heinz shares dropped as much as 7.6% before recovering to close down 2.4% for the holiday-shortened week. This market reaction underscores investor uncertainty regarding the company’s future trajectory and Berkshire Hathaway’s position.
Berkshire’s Stake and Write-Downs Reflect Prolonged Struggles
Berkshire Hathaway acquired a significant stake in Kraft Heinz through its 2013 partnership with 3G Capital to purchase H.J. Heinz for $23.3 billion. The subsequent 2015 merger with Kraft resulted in Berkshire holding over 325 million shares valued at approximately $24 billion at closing. Initially, the investment’s value rose to nearly $30 billion in 2016 but has since declined sharply, hovering around $10 billion since 2020.
Buffett acknowledged in his 2015 shareholder letter that Berkshire paid $9.8 billion for the shares, implying an overall loss of about $1 billion at present. The company took a $3.8 billion write-down in the second quarter of 2025, following a $3 billion write-down in 2019, to align with market realities.
Buffett Questions Strategic Merger and Upcoming Corporate Split
Buffett criticized the original merger, stating, “It certainly didn’t turn out to be a brilliant idea to put them together,” and expressed doubts that dismantling the combined entity would resolve its challenges. He also signaled that Berkshire would consider selling its stake if it aligns with the company’s best interests but would require any block sale offer to be extended to all shareholders, unless a buyer seeks to acquire the entire company.
These remarks come amid reports that Kraft Heinz is contemplating spinning off a substantial portion of its grocery business, including iconic Kraft products. The restructuring follows the resignation of two Berkshire executives from Kraft Heinz’s board in May, fueling speculation about Berkshire’s potential divestment and contributing to downward pressure on the stock.
Critical Perspectives Highlight Underlying Issues
Industry observers echo Buffett’s concerns. The Financial Times attributes Kraft Heinz’s difficulties to a failure to adapt to evolving consumer preferences, characterizing the proposed split as a reaction to years of underperformance driven by excessive cost-cutting rather than innovation. Reuters columnist Jennifer Saba described the company’s ongoing transformations as a “sausage-making” process marked by repetitive financial maneuvers lacking substantive growth.
Looking Ahead: Uncertainty for Kraft Heinz and Berkshire Hathaway
With Berkshire owning over 10% of Kraft Heinz shares, any significant sale would require prompt regulatory disclosure, potentially triggering broader investor sell-offs. As Berkshire weighs its options, market participants will closely monitor the company’s strategic moves and the impact on Kraft Heinz’s valuation.
Buffett’s rare public critique underscores the challenges facing one of Berkshire Hathaway’s largest holdings and signals a critical juncture for both the investor and the company.
FinOracleAI — Market View
Buffett’s public criticism is likely to exert short-term negative pressure on Kraft Heinz shares, as it raises investor concerns about the company’s strategic direction and Berkshire Hathaway’s commitment. The impending corporate split and potential share sales add layers of uncertainty, increasing volatility risk. Investors should watch for Berkshire’s next moves regarding its stake and any concrete details on Kraft Heinz’s restructuring plans, which will be key to assessing medium-term recovery prospects.
Impact: negative
