Why Kraft Heinz Is Warren Buffett's Worst Bet

Рет қаралды 336,169

Күн бұрын

Nine years after its megamerger, food behemoth Kraft Heinz is facing challenging times amid slumping sales, high inflation, a shift away from processed foods and stiff competition. Despite $27 billion in annual sales, the company must keep innovating if it wants to compete with private-label brands such as Costco's Kirkland or Wegmans' various brands which are quickly stealing market share as recent generations value lower prices over loyalty. With a new CEO, a renewed focus on core brands, and Brazilian private equity company 3G out of the picture, majority stakeholder Warren Buffett's Berkshire Hathaway is betting it can make a comeback. But experts say it could be difficult.
Chapters:
0:00 Introduction
2:01 Chapter 1. A bad deal
7:40 Chapter 2. Turn around?
11:37 Chapter 3. Industry Risks
Clarification: At 4:12 a speaker in this video misstated the relationship between 3G and Kraft. 3G owned Heinz prior to the Kraft Heinz merger.
Produced and shot by: Natalie Rice
Edited by: Evan Lee Miller
Animation by: Christina Locopo, Jason Reginato
Senior Managing Producer: Tala Hadavi
Additional Sources: FactSet, Reuters
Additional Footage: Getty, AP Photos, The Kraft Heinz Company
» Subscribe to CNBC: cnb.cx/SubscribeCNBC
» Subscribe to CNBC TV: cnb.cx/SubscribeCNBCtelevision
About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.
Want to make extra money outside of your day job? Take CNBC’s new online course How to Earn Passive Income Online to learn about common passive income streams. Register today and save 50% with discount code EARLYBIRD: cnb.cx/3Iwblnk
Connect with CNBC News Online
Get the latest news: www.cnbc.com/
Follow CNBC on LinkedIn: cnb.cx/LinkedInCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC on Threads: cnb.cx/threads
Follow CNBC News on X: cnb.cx/FollowCNBC
#CNBC
Why Kraft Heinz Is Warren Buffett's Worst Bet

Пікірлер: 580

@ramsinbarkhoy302 Ай бұрын

Highly processed and addictive foods… their failure is a win for humanity!

@punishanpika Ай бұрын

Like the failure of any highly processed and addictive morality mill. Like all the crazy cults.

@chiquita683 29 күн бұрын

Buffet pushing trash like soda

@pablovint 28 күн бұрын

100% True, but sometimes they are so tasty.

@felixpope6073 9 күн бұрын

Do you think other food companies are better?

@-KillaWatt- Ай бұрын

The brand is known for affordable food. Hotdogs, Kraft Mac and Cheese, etc, etc. Their prices don't reflect that and they lost touch with their consumers. Mac and cheese used to be a cheap meal a mom could put on for their kid when they came home for lunch from school. Now it's fine dining with the cost of their products.

@JohnEastmanExAttyAtLaw Ай бұрын

Mac and cheese costs a buck, LOL.

@santostv. Ай бұрын

Why you guys eat that sh*t? It looks bad

@-KillaWatt- Ай бұрын

@@JohnEastmanExAttyAtLaw depends where you are. Ive travel to many paces around the world and the cost is wildly different from place to place. Up in Canada it is nearly $4 a box.

@kennethwers 28 күн бұрын

@@JohnEastmanExAttyAtLaw Please, inform us where you get it for a buck.

@curtisaallen 27 күн бұрын

@@kennethwersat Walmart and Target the price of Kraft Mac and Cheese cost a dollar.

@tommcfadden5232 Ай бұрын

The quality of their products is awful compared to what it once was.

@antimatter7629 Ай бұрын

High level of lead in lunchables

@ExcessumGaming Ай бұрын

Bad, expensive and boring.

@boohere2 Ай бұрын

I actually still buy & like the ketchup, mustard, relish & the cheddar/white shredded cheese (not American cheese FYI). I used to eat the Mac & Cheese as a kid. I loved that too. I don't eat it anymore. If I want pasta, I am just making it myself & will add on my own cheese if needed.

@googleevil Ай бұрын

and they keep business in russia. So many europeans just boycott them and nasty Nestle choosing local brands instead.

@user-yv4gg7jb2f Ай бұрын

i suppose there are just more alternatives and expectations changed

@MoneyPrinter123 Ай бұрын

I love how many euphemisms CNBC uses for layoffs: "private equity meritocracy", "zero-based budgeting", "cost-cutting", "streamlined operation".

@luiscamacho1996 Ай бұрын

The problem with big corporations is their need for constant never-ending growth to make wall street speculators happy.

@PHlophe Ай бұрын

Luiz, capitalism at its finest. but this cluster of brands is diabetes in different forms. Que Triste !

@willreasoner4472 Ай бұрын

Until there's one giant mega-corporation that owns everything. A few thousand people have every penny of wealth, and then what? What are you gonna do then?

@fabiors10 Ай бұрын

@@willreasoner4472 I sense that we will know pretty soon.

@ThePieMaster219 Ай бұрын

This isn't another spam comment chain is it

@sciencehistoryandentertain734 Ай бұрын

Or in this case huge cost gutting....Short term value long term loss...

@MarufulIslam-dp3jg Ай бұрын

10:48 This lady is master of corporate jargon. She never said anything substantial throughout the video but talked a lot. Lol

@xtinabay 23 күн бұрын

Classic corporate drone- dead eyes and completely useless

@darrenchin_ 21 күн бұрын

not to mention the creepy smiling performance!

@speucey Ай бұрын

When the merger happened, in Canada, there was a huge fiasco about heinz no longer buying tomatoes from Canadian farmers. Whether or not this has changed, it was irreparable brand damage at least in Canada. Many families I know still avoid heinz because of this.

@JokerLurver Ай бұрын

Had to increase prices by 15% in 2023 ... to pay off ridiculous corporate bonuses? And shrinkflation? No mention of these things. Suspicious.

@bryanreed3559 27 күн бұрын

Definitely don't go look up salaries of the executives.

@deecee2174 16 күн бұрын

Ridiculous comparison. Regardless if prices go up or down, if jobs are laid off or expanded, if revenues are growing or shrinking; people still get a decent salary and a bonus. Cry harder lol you're not the ones who put in the work to lead a corporation

@kv4648 11 күн бұрын

@@deecee2174is this satirical?

@fastestdino2 2 күн бұрын

You're watching a neo-liberal corporate company news channel. Of course they wouldn't.

@catmelvin997 Ай бұрын

KraftHeinz lost because they forgot they were in the business of feeding people. People who want premium branded food products aren't buying frozen pizza, and the people who are tend to look for value/bargains

@ExcessumGaming Ай бұрын

Pretty much.

@BobSmith-mp8ld Ай бұрын

This brand has lived off of boomer nostalgia for the last 20 years. The biggest problem for this brand, is it pretends to be a premium food brand, but most of what they make is done better by private labels for a lower price.

@TheBooban Ай бұрын

Hmm. Where do you think private label brands are getting their products from?

@RoadRageRod Ай бұрын

@@TheBooban Depends on the chain behind the private label and the kind of product. Some chains even own their own production facilities. Some work with well etablished mega corps, some with smaller producers. But plenty of products have different recipes than the name brand product their derived from. While some of those recipes are better, some are worse and for some products like dairy the distinction isn't measureable.

@Casa-zq3fm Ай бұрын

Kraft-Heinz’s story is similar to what happened to Boeing. Bring in MBA types, extract value with a zero budgeting strategy’, go goofy with 3G thinking, and destroy the product.

@donovantobs 10 күн бұрын

As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?.

@Donald-George 10 күн бұрын

well as you know bigger risk, bigger results, but such impeccable high-value trades are often carried out by pros.

@kurtKking 10 күн бұрын

People dismiss the importance of advisors until they are burned by their own emotions. I remember a couple of summers ago, following my lengthy divorce, I needed a good boost to assist my business stay alive, so I looked for qualified consultants and came across someone with the highest qualifications. She has helped me raise my reserve from $275k to $850k, despite inflation.

@Adambarking 10 күн бұрын

How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?

@kurtKking 10 күн бұрын

Actually its a Lady. Yes my go to person is a ‘MICHELE KATHERINE SINGH '. So easy and compassionate Lady. You should take a look at her work.

@Adambarking 10 күн бұрын

Thank you for this amazing tip. I just looked the name up and wrote her up, to schedule a call. many thanks

@andreww5574 Ай бұрын

"elevating food experiences" elevating rates of diabetes

@larissa4615 Ай бұрын

I just don’t see them innovating their way out of this one. Private label brands are just cheap with the same quality

@danyala.1659 Ай бұрын

They can sell off-brand versions at a lower price.

@erkinalp Ай бұрын

@@danyala.1659 and at worse specs, even branded versions wildly differ across different stores

@damnitschris_ Ай бұрын

off brand are usually made at the same factories

@erkinalp Ай бұрын

@@damnitschris_ true, but not with same specs; in my experience off brand ones are considerably worse but one cannot tell apart from branded by look and feel alone

@trumpet12345 Ай бұрын

I disagree with cheese products. Cream Cheese being the worst offender with knockoffs. Target i think had a semi recent redo that seems pretty decent, but some products are russian roulette IF you can find one you like as much or better.

@jpringle1290 Ай бұрын

All trash food like products, Your health is better off not touching that crap.

@hybridstryker233 Ай бұрын

💯💯💯💯 and is waste of money

@timt6860 Ай бұрын

I like the ketchup though

@DG-hw8it Ай бұрын

Yes, eat imported olive oil from Bertolli....😂

@Haveyoueverbeenswallowed Ай бұрын

@@DG-hw8itfr. With today’s inflation, ppl are eating what they can afford. I’d rather eat that before starving or begging for food

@MrMountain707 Ай бұрын

Try a better one. Ketchup is easy to make too.@@timt6860

@jbarkley4938653 Ай бұрын

High fructose corn syrup in ketchup. Unbelievable. 😢

@ms.b9093 Ай бұрын

Not even an option in Europe! The US is disgusting with their food safety standards

@Look_What_You_Did Ай бұрын

You clowns still going on about corn syrup.

@Look_What_You_Did Ай бұрын

@@ms.b9093 Safety standards? Ketchup is not a European condiment. Corn syrup is not a safety concern.

@jbarkley4938653 Ай бұрын

@@Look_What_You_Did shut up

@Joshy.Want.Wingyy Ай бұрын

@@Look_What_You_Didall of your comments are so karen-ish 😂 lmao shut up

@leinster22 Ай бұрын

Kraft destroyed Cadbury chocolate after acquiring it. They shut down operations in the UK where Cadbury originated and moved to Poland. Quality of the product rapidly declined after the acquisition.

@rickyayy Ай бұрын

It's disgusting now

@mhjunky4278 Ай бұрын

Thats sad wtf

@hieronymusvonlipschitz Ай бұрын

That's sad because European candies and chocolates are usually better

@andrewdocherty3998 20 күн бұрын

yeah they started to add palm oil and shea butter, which made the chocolate taste "waxy". Should've stayed in Bourneville, UK where it was created, great shame. The previous owners in the 19th/20th centuries were Quakers and even built homes etc for their staff, all that has gone now. Rowntree is another example who did this, ruined by a Nestle takeover

@pranaym3859 17 күн бұрын

Cadbury's chocolate tastes like Hershey's now which is one of the worst chocolate

@zunedog31 Ай бұрын

Think how many years of life this processed junk food has taken from people.

@user-qv6ud2hx6f Ай бұрын

But it saves cooking time...

@aviuspersona Ай бұрын

High fructose corn syrup doesn’t belong in ketchup. I hope brands that unapologetically use ingredients like this continue to fail

@noelgenoway9360 Ай бұрын

Agree 1000 percent!

@rickyayy Ай бұрын

Bingo!!!!

@prometheus5311 Ай бұрын

Ketchup in Europe is still just tomatoes, vinegar and a bit of sugar, in the usa it's horrible.

@MakerInMotion Ай бұрын

Partially the fault of the government that subsidizes corn and keeps corn syrup cheap.

@user-pb8xf9if3c Ай бұрын

Certainly. Exchange-Traded Funds (ETFs) are popular for long-term investments due to their diversified nature. ETFs offer exposure to a wide range of assets, such as stocks, bonds, or commodities, which can help reduce risk. Some top choices for long-term investing include broad market index ETFs, sector-specific ETFs, and bond ETFs, as they provide potential for growth and income over an extended period while minimizing the risk associated with individual stocks.

@VanessaFloyd-tt7yg Ай бұрын

I agree, that's the more reason I prefer my day to day investment decisions being guided by an advisor seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using my advisor for over 4years+ and I've netted over 2.8million.

@DianaR.Ballard Ай бұрын

Kindly share the details for reaching your advisor. With inflation negatively affecting my funds, I'm in search of a more lucrative investment strategy to optimize their performance.

@VanessaFloyd-tt7yg Ай бұрын

Deborah Lynn Dilling covers things like investing, insurance, making sure retirement is well funded, going over tax benefits, ways to have a volatility buffer for investment risk. many things like that. Just take a look at her full name on the internet. She is well known so it shouldn't be hard to find her.

@DianaR.Ballard Ай бұрын

I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Deborah up and send her a message. You've truly motivated me. Thank you.

@LayKxD Ай бұрын

These products are not cheaper than local alternatives. I noticed the cost in sandwich meat because I eat it everyday for lunch. I went to my local deli (I live in Louisiana) and noticed that a pound of fresh meat sliced is cheaper than than Kraft processed. Same with cheese singles. I am not saying everything local is cheaper, but I noticed that this processed stuff and other Kraft products costs more than better quality ingredients. The only downside is that they don't last on shelf as long, but like I eat it all before it goes bad.

@ms.b9093 Ай бұрын

Eating processed dell meat everyday can lead to colon cancer! Today's cured meats are not the same as they were 40 years ago.

@moderatelyapathetic3280 Ай бұрын

And who wants all those chemicals they use as “preservatives” in their body? If bacteria don’t want to eat, neither should you!

@ctgottapee9020 Ай бұрын

odds are most of the 'local' brands are just kraft heinz produced bulk buys with a private label

@USAWILL 11 күн бұрын

Noticed the same thing. We used to buy the cotton salami because it was $1 or 2 for $3. It was a cheap meal that went a long way and I got used to the taste. Then it started to sell for $2.69+ each. and deli salami was cheaper.

@mralexpub Ай бұрын

It would seem Unilever dodged a bullet by strongly rejecting the merger.

@rogersmith7194 Ай бұрын

You also have to not sell foods geared towards kids and convenience without lead and other heavy metals, e.g. lunchables.

@SuperMetalMage Ай бұрын

In the USA medical bills will be more expensive eating Kraft products than the money you save from buying Kraft foods.

@noelgenoway9360 Ай бұрын

So so so so true!!!

@P3t3rad Ай бұрын

i had an aneurism reading this

@nicoctane1669 Ай бұрын

When people are so poor they have no choice.

@JDWBS Ай бұрын

@@nicoctane1669VERY WELL SAID.

@dannmarceau9743 Ай бұрын

We need to stop combining companies and break up corporations, not make them bigger. They're the reason people are paying through the nose for food.

@tonyburzio4107 Ай бұрын

FALSE, government overspending and money printing are the only way to create inflation.

@stripedrajang3571 Ай бұрын

Food. You mean, "food". They aren't really "food". They are more like lab experiments called "manufactured edibles". 😂

@santostv. Ай бұрын

That’s isn’t “food” , you don’t need it

@prometheus5311 Ай бұрын

Ketchup is still a good product in Europe, in the usa it's horrible.

@JJ2023. Ай бұрын

Maybe if they stopped tinkering around with the ingredients the quality has changed , why do US customers have different ingredients to European ones if you compare Heinz Ketchup ? European version doesn't have corn syrup , tomato concentrate , or added flavourings 😬

@njpf34 Ай бұрын

I think the worst part of 3G’s work was all the human talent they lost. I work at another consumer packaged foods company, and sit next to 4 people who left Kraft due to cuts made by 3G. These are Engineering / R&D technical folks who work on innovation. That was the real loss - the experienced talent needed to innovate at that scale. That sad / upsetting part of 3G was their ruthless pushing of their human capital.

@roshinobi Ай бұрын

I left another of their companies. I’ll never work for a 3G company again. All they know how to do is fire people.

@mikeb497 Ай бұрын

To all these companies, all they see is a number that cost money. They dont understand or care how much one person is actually worth

@ctgottapee9020 Ай бұрын

It's surprising how all management involved in this deal didn't understand that the innovation (the next lunchables) was where the value was, not the name brands. They could have cost cut in production and left R+D alone.

@7Millionaire7 Ай бұрын

@@ctgottapee9020 I bet they did, but private equity and investors do not care about that. Once they are your main shareholders, they fire people and cut everything. After they get their profits, they sell and leave. They do not care about long term viability, the workers, or anything beyond their span of ownership.

@Bernard-fo2qo Ай бұрын

Anything Kraft touches turns to Krap.

@X139T Ай бұрын

Oh wow it’s almost like people don’t like poison anymore

@Xeonerable Ай бұрын

Its because corporate consolidation leads to the enshittification of products and services in the name of higher profits each quarter.

@Tracertme Ай бұрын

Best news in 100 years… ❤😂 I don’t think I saw anything that wasn’t processed food to make you sick and ill. The growth officer just talked none sense with endless transformation bling words. As for their plant based foods.. 🤮 I don’t think I have touched or eaten any of that junk in 15 years.✅

@hanseltavion6570 Ай бұрын

“Growth Officer”, almost like she asked an AI to generate some examples of soulless, meaningless corporate talk. Also, Kraft, don’t call your customers “consumers”; it does make them feel very generous with their shopping habits…

@Seanpfree Ай бұрын

"Our people & our culture" If Kraft Heinz cared about either they'd pay their people more... their WORKERS, not execs and stock holders.

@kramerrichardson6008 Ай бұрын

It's the new corporate trend to slowly increase prices while finding a way to make the product cheaper for maximum profit, they realize that food is needed so they are in control of that.

@alexroberto6353 Ай бұрын

Because they stopped making ketchup in Pittsburgh.

@fullcircle.organics Ай бұрын

Both are these companies are synonymous with low quality to me. If anything I skip these brands over because I know the ingredient list is full of garbage.

@holycrapchris Ай бұрын

What ketchup do you buy? Hunt's?

@adaml.5355 Ай бұрын

@@holycrapchris Store brand. Organic.

@NicholasLi10 Ай бұрын

THEN SERVE HEALTHY FOOD

@marygem Ай бұрын

Junk fructose and corn syrup in ketsup. 😮 and what's even in hot dogs? Total junk food brands.

@DG-hw8it Ай бұрын

That's tomato sauce, not ketchup...🤔

@IamSnowbird Ай бұрын

Heinz Simply Ketchup uses regular sugar. It's all I use.

@MrRapmaster19 Ай бұрын

They do make Simply Heinz, which has no corn syrup, and it’s so much better. I refuse to have any other kind of ketchup

@bobbymoss6160 Ай бұрын

Profit over quality, people are buying store brands to save money.

@roydominic4080 Ай бұрын

I can’t afford name brands

@dontelindsey5846 Ай бұрын

Prices for everything are ridiculous. Even generic brands are expensive.

@christiang6960 Ай бұрын

Go to Aldi or Lidl

@mrdeebo313 Ай бұрын

@@dontelindsey5846yep, I do most of my shopping at Meijer. The store brand used to actually be a deal, now they are the same price or more expensive than the name brands. The frozen fries I used to get were $1.50, now they're $5, in less than 4 years. Meanwhile the Checkers and Arby's fries are still $5, didn't go up at all so I get those now

@Jacks_the_Lab Ай бұрын

Well I do see a common point for multiple fail... 3G capital...

@creepinwhileyousleepin Ай бұрын

Arguably other than Heinz ketchup, there's better alternatives to all their offerings at the same price or better.

@emptyfish8992 Ай бұрын

It's time for all these brands to get healthy or be outlawed.

@PhatChin Ай бұрын

Private label like Kirkland Signature is often the superior choice. KHC is finished.

@adaml.5355 Ай бұрын

Or Aldi. Everything they offer is either made by the store brands or way better than the store brands for CHEAPER.

@mateusdossantos5298 Ай бұрын

The 3G capital did the same thing here in Brazil with the americanas store. Fraud was visible. But they found a way to drop all the acusacion against them

@stripedrajang3571 Ай бұрын

What accusations did 3G have against them?

@kindlee3468 Ай бұрын

All JUNK RED 40

@PHlophe Ай бұрын

and its the worst of the worst

@idonisthelover Ай бұрын

& lead 🎉