Greg Abel took the reins as the CEO of Berkshire Hathaway (NYSE:BRK)(NYSE:BRK) at the start of 2026. While the Warren Buffett successor has made many changes to the company’s investment portfolio, one of the first stocks he said he would sell remains a prominent holding.
Kraft Heinz Charts Turnaround Under New CEO
Like Berkshire Hathaway, food company Kraft Heinz (NYSE:KHC) began 2026 with a new CEO. The company is now led by Steve Cahillane, who is helping oversee a turnaround after years of stock underperformance.
The new CEO and his plan appear to be enough to have won over Abel, even if temporarily, after the new Berkshire CEO said he wasn’t pleased with the stock performance and was ready to sell Berkshire’s stake in Kraft Heinz.
In a recent interview with NBC News, Cahillane emphasized Kraft Heinz’s focus on keeping its legacy brands affordable, as consumers look at prices and off-label alternatives amid rising inflation and costs.
The CEO highlighted promotions, packaging, and strategic price cuts as three key areas of focus for the company.
"We can’t just rely on having a strong brand and saying that’s enough to be enough," Cahillane told NBC News.
A report from McKinsey, highlighted by NBC News, says 85% of consumers believe private-label products are as good as or better than name-brand products.
"Consumers have only so many dollars available for their food budget in a month’s time, and so you have to earn the right to be in that basket each and every day," Cahillane added.
Cahillane said the company’s sizing strategy isn’t shrinkflation, but rather a focus on having more sizes at different prices.
For Kraft Heinz, the strategies may be working. The company has been beating earnings per share estimates from analysts, but until recently struggled to beat revenue estimates.
Kraft Heinz beat analyst estimates for revenue in the first and second quarters of the current fiscal year, after missing estimates in eight of the nine previous quarters.
Berkshire’s Change of Heart
Earlier this year, Berkshire filed plans to sell up to 325,442,152 shares of Kraft Heinz, a position that represents around 27.5% of the entire food company. The position is part of a stake acquired by Berkshire Hathaway after the conglomerate helped fund the purchase of H.J. Heinz with 3G Capital in 2013 and later helped fund the merger of Kraft and Heinz in 2015.
Berkshire Hathaway has seen a significant loss on the investment in Kraft Heinz over the years.
In a shareholder letter, Abel was critical of the company and Berkshire’s position.
"Our investment in Kraft Heinz has been disappointing," Abel said. "Even after considering the preferred equity component in our original Heinz investment, our return has been well short of adequate."
With the Kraft Heinz filing and Abel’s comments, it seemed inevitable that Berkshire Hathaway would sell its stake in the first or second quarter.
While Abel cut the Berkshire holdings from 42 to 29 in the first quarter and sold some stocks previously held for more than a decade, Kraft Heinz remained strong in the conglomerate’s portfolio. The stake has not been trimmed in the first or second quarter.
At the end of the second quarter, Kraft Heinz was the 11th largest position in the Berkshire Hathaway portfolio at 2.6% of assets, valued at around $7.7 billion.
The turnaround strategy by Cahillane appears to be working with consumers and Berkshire Hathaway. Could investors be next?
Kraft Heinz shares are down 0.4% year-to-date and down 6.8% over the last 52 weeks.
Photo by Jonathan Weiss via Shutterstock
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