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Posted on 09/03/2025 9:00:25 PM PDT by SeekAndFind
Warren Buffett criticized the planned break-up of The Kraft Heinz Company (KHC) on Tuesday, saying he is "disappointed" with a move that effectively unravels the 2015 merger he helped engineer.
Shares of the packaged-food giant slipped following his remarks.
Buffett told CNBC that while the merger fell short of expectations, he does not believe splitting the company will solve its challenges.
The Berkshire Hathaway Inc. chief, whose firm owns about 27.5% of Kraft Heinz, said the deal "didn't turn out to be a brilliant idea" and added that dismantling the company is unlikely to be a cure-all. Buffett also noted that successor Greg Abel conveyed Berkshire's displeasure directly to the food maker.
Kraft Heinz will separate into two stand-alone, publicly traded businesses: Global Taste Elevation Co.—focused on sauces, spreads, seasonings, and shelf-stable meals—and North American Grocery Co., a domestic staples portfolio.
The global unit includes brands such as Heinz, Philadelphia and Kraft Mac & Cheese and generated about $15.4 billion in 2024 sales, while the North American unit, led by CEO Carlos Abrams-Rivera, posted around $10.4 billion.
The board expects the tax-free spin to be completed in the second half of 2026, with investment-grade capital structures and an aggregate dividend maintained.
Company leaders argue that narrowing focus will cut complexity and speed decision-making after a years-long period of underperformance. Miguel Patricio will serve as executive chair through the transition, and a separation committee led by John Cahill will oversee execution.
Kraft Heinz shares slipped after Buffett's comments as investors weighed the Oracle of Omaha's skepticism against management's case for value creation.
Berkshire has previously acknowledged impairments tied to the investment, adding to scrutiny over whether a split can unlock brand potential and improve margins.
(Excerpt) Read more at benzinga.com ...
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Teresa [Heinz] has been working on the BH railroad all the live long day?
Uh, oh. It’s time for John Effin Kerry, who served in the Vietnam, to annul another marriage and seek $$$ elsewhere.
Whose side did he serve on?
AI may encourage more splits than marriages, as AI pushes economies of scale to smaller, more nimble companies. Mergers will result in fewer savings due to nobody left to lay off, and only make sense if they create monopolies.
Corporate executive believe if you reshuffle the deck, it improves your chances of drawing a royal flush.
must be others like me
who avoid name brands like the plague
About 15 years ago I started providing data analytics services for a big FMCG provider
The billion dollar brands are mostly money spent on marketing, shelf space, display promotions etc. far less on R&D.
Gillette for example is better than other competitors but not so much better that it justified the price premium.
But the key points were
1. Shelf location (catches your eye is key).
2. Make sure it is always stocked when needed, but not too much as inventory costs (so detailed supply chain management)
3. Handling non performing inventory (again SCM)
4. Reducing the bottom line.
If an end customer didn’t find the product on shelf, you could potentially lose him.
So I follow your example and mostly avoid brands. The only brands I think are worth it are
1. Colgate BASIC toothpaste. The rest of their range are just money grabs imho.
2. Jacobs coffee
That’s about it. No processed stuff as far as possible. It’s the processed foods that make one fat imho.
Is Buffet a brilliant strategist, or is he just lucky? I think it has been a little bit of both. The luck part: When he started out, he happened onto a good investment strategy - The luck part.
He then followed that strategy relentlessly - The smart part.
But...The times, they are a-changin. He’s not quite as lucky anymore, and he’s not quite as smart anymore.
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