When Buffett Walks Away, Who's Left to Believe in Kraft Heinz?

Warren Buffett is known for his investing wisdom and for many wins during his legendary career. But he's also willing to admit he's prone to making mistakes, just like any other investor.

One of the mistakes seems to have been investing in Kraft Heinz (NASDAQ: KHC), with its stock price languishing over the last several years. In a 2019 interview, Buffett admitted that Berkshire Hathaway (which he was CEO of at the time) "overpaid" for large purchases of the stock.

Buffett's successor as CEO directed Berkshire to sell its holdings in Kraft Heinz in January 2026. However, that sale did not finalize. While the food and beverage manufacturer has a difficult turnaround ahead, it seems that, in the short term at least, Kraft Heinz has a supporter other than Buffett.

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The issues at the conglomerate

Several issues have led to a slump in Kraft Heinz's stock price.

The first is that the company has been ripe for the "trade-down effect" amid stubborn inflation. For instance, many people don't have much loyalty to a brand of, say, ketchup, so when prices rise, they are willing to buy store brands. Aside from condiments, there are other Kraft Heinz products people may be willing to trade down for. For example, Walmart sells Bagel Bites, a brand owned by Kraft Heinz, for $9.98 online; through its own brand, Great Value, Walmart has a similar offering priced at $7.44.

The second issue has been a shift in consumer preferences, as more shoppers may be trying to fill their shopping carts with fewer processed foods. Kraft Heinz revenue dropped from $26.6 billion in 2023 to $25.8 billion in 2024, and then fell again in 2025 to $24.9 billion.

The third is that some observers consider the company too slow to respond to those changing shopping habits. In 2025, Kraft Heinz proposed a breakup plan to streamline operations, and Buffett was not a fan. But the breakup effort was paused in February 2026, as the food conglomerate announced plans to invest $600 million in a turnaround effort instead.

"We are confident in the opportunity ahead and believe this investment will accelerate our return to profitable growth," CEO Steve Cahillane said in the February announcement.

Giving the turnaround more time

Before the breakup pause, Buffett's successor as CEO, Greg Abel, appeared ready to wash his hands of the ketchup maker. Berkshire made public its plans to sell its stake in Kraft Heinz. But it reversed course after the breakup plan was halted.

On May 6, investors will see if there are any updates on the turnaround when the food giant reports first-quarter results. Abel seems willing to be a little more patient, which is a vote of confidence in the short term. How long that patience will last remains to be determined.

With a dividend yielding above 7% and a forward price-to-earnings ratio of 10.8, Kraft Heinz may look appealing. But before it can truly reward shareholders, it still has a long uphill battle to turn things around.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Walmart. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.