Kraft Heinz (KHC) Stock: Why Buffett Is Dumping His $7.7 Billion Stake

TLDR

• Kraft Heinz stock fell 3.6% after Berkshire Hathaway filed to potentially sell its 27.5% stake worth $7.7 billion at current prices
• Warren Buffett admitted the 2015 investment was a mistake after Berkshire took $6.76 billion in write-downs on the position
• The potential exit comes before Kraft Heinz splits into two companies focused on groceries and sauces in late 2026
• Sales dropped 3% in 2024 as consumers shifted to healthier alternatives and rising prices hurt demand
• Analysts rate the stock a Hold with an average price target of $25.38, representing 6.8% upside potential

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Kraft Heinz stock dropped 3.6% in premarket trading Wednesday after a regulatory filing showed Berkshire Hathaway may exit its entire position. The filing gives Warren Buffett’s company the option to sell 325,442,152 shares, representing a 27.5% stake.

The Kraft Heinz Company, KHC

At Tuesday’s closing price of $23.76, the holding is worth approximately $7.7 billion. The filing doesn’t confirm a sale but allows Berkshire to dispose of shares whenever it chooses.

Berkshire accumulated the stake during the 2015 merger that created Kraft Heinz. The deal combined Kraft Foods and H.J. Heinz, with Buffett partnering alongside Brazilian private equity group 3G Capital.

The investment hasn’t worked out as planned. Buffett publicly called it a mistake, saying he was too optimistic about the food maker’s prospects.

Billions in Losses Mount

The numbers back up Buffett’s regret. Berkshire wrote down the investment by $3 billion in 2019 as Kraft Heinz struggled with falling sales and brand value. Another write-down of $3.76 billion hit in August 2025.

Those losses total $6.76 billion, making this one of Berkshire’s most expensive mistakes. The potential sale would close the book on a failed bet that lasted nearly a decade.

Kraft Heinz has battled multiple headwinds. Consumer tastes shifted toward fresher, healthier options. The company’s traditional packaged foods lost appeal as younger shoppers changed buying habits.

Management also drew criticism for underinvesting in brands and failing to innovate. Competition intensified while food inflation squeezed margins and pushed price-sensitive customers away.

Sales fell 3% in 2024, continuing a troubling trend. The company announced a plan to split into two businesses in September 2025, hoping to unlock value and improve operations.

Split Plans Move Forward

One company will handle groceries while the other manages sauces and spreads. Management said the current structure makes capital allocation difficult and limits growth in promising areas.

Steve Cahillane became CEO on January 1, 2026, tasked with executing the split. The transition coincided with Greg Abel taking over Berkshire from Buffett.

Both Abel and Buffett opposed the split decision. Their resistance may factor into Berkshire’s exit plans, though the filing doesn’t specify reasons.

The separation is scheduled for the second half of 2026. Berkshire appears unwilling to stick around to see how it plays out.

Analyst sentiment remains cautious on Kraft Heinz. The stock has dropped 19.4% over the past year as problems piled up. TipRanks shows zero Buy ratings, with 13 Hold recommendations and one Sell.

The average analyst price target of $25.38 implies 6.8% upside from current levels. That modest forecast reflects low confidence in a turnaround. At the January 20 closing price of $23.76, Berkshire’s stake is worth roughly $7.7 billion.

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