Kraft Heinz's Stock Looked Safe 10 Years Ago. Here's What Really Happened

Some people prefer investing in the best dividend stocks for long-term income production. Publicly traded companies that pay higher-than-average dividends tend to be established companies that are able to hold their values during economic volatility. Stocks from consumer staples businesses tend to be stable while providing good dividends.

Kraft Heinz (ticker symbol KHC) is one of the 20 largest U.S.-based consumer staples companies. From its headquarters in Pittsburgh, Pennsylvania, the business sells products in many countries around the globe. Some of the company's most well-known brands of products include Kraft, Heinz, Oscar Mayer, Kool-Aid, Velveeta, Jell-O, Philadelphia, and Ore-Ida.

The company's current market capitalization is $28.88 billion. While that is an impressive figure, it pales to where the market cap was a decade ago. At the start of 2016, the company's market cap was $88.29 billion. The Kraft Heinz market cap peaked at $112.27 billion in May 2017 before plunging to less than $40 billion just before the pandemic. The company's stock price dropped over the same period. The Kraft Heinz stock price was $71.38 at the start of 2016, peaked at $91.77 in early 2017, and dropped to $23.74 at the start of February 2026. The company cut the quarterly dividend as well. Each share had a $0.575 dividend in early 2016 and a $0.625 dividend in late 2018. Today's dividend is $0.40, as the company's profits have faltered for several reasons over the past decade, including overly aggressive cost cutting and ceding market share to competitors.

Kraft Heinz was born in a merger in mid-2015 when Kraft Foods Group and H.J. Heinz Co. came together. Berkshire Hathaway and 3G Capital had purchased Heinz in 2013, and the merger occurred soon afterward. Normally, one of the best tips for investing in stocks as a beginner is to mimic what Warren Buffett and Berkshire Hathaway do (while doing your own research). However, mimicking this investment decision would've been a poor idea with the steep Kraft Heinz stock price plunge that occurred within a few years of the merger.

The idea behind the merger of Kraft and Heinz was to improve results for shareholders by reducing the cost of manufacturing, opening new markets to the larger company's products, and gaining more financial leverage in negotiations with suppliers and retailers. Instead, some analysts believe the merged company, reportedly spurred by 3G Capital's decisions, became so focused on cutting costs that it failed to pay attention to food quality and changing customer preferences. The company's lack of attention to maintaining strong brands and innovating its products allowed competitors to grab market share, reducing profits for Heinz Kraft.

Just as the company was losing momentum, it had to release news that spooked investors even further. KHC posted a $12.6 billion loss in the fourth quarter of 2019 while announcing a $15 billion write-off in the value of its Kraft and Oscar Mayer brands.

Warren Buffett's smartest investments have made him millions, but he readily admits the investment in Heinz and the subsequent merger with Kraft were not among them. He said in 2020 that the price paid for Kraft in the merger was too high, even though the business's fundamentals remained good. Despite the stock price drop over the decade, Berkshire Hathaway maintained its ownership in Kraft Heinz. It held about 325 million shares in 2021 and held that same amount recently.

Even though Buffett retired at the end of 2025, his influence may still be occurring at Berkshire Hathaway. In September 2025, Kraft Heinz announced plans to split into two companies to try to regain momentum and gain greater appeal among investors. Soon after the announcement, Buffett expressed opposition to the plan to split, believing it wouldn't solve the company's fundamental problems. 

Soon after Buffett's retirement, Berkshire Hathaway's new CEO, Greg Abel, announced that the investment company planned to sell all its shares in Kraft Heinz. Considering Berkshire Hathaway's KHC stake is around 27.5%, the announcement represented significant news. In early February 2026, Kraft Heinz then announced it would be pausing plans to split. It's not clear whether the two announcements were directly related, but Abel praised the decision. It also remains unclear whether Berkshire Hathaway plans to go forward with its intention to sell its KHC stake, creating significant volatility in the stock that might be further spooking investors.