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Can Kraft Heinz Catch Up with Its Changing Market?
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Can Kraft Heinz Catch Up with Its Changing Market?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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At the end of February, when Kraft Heinz posted a .6 billion loss for 2018 and slashed its dividend by 36%, it wasn’t hurting for a lack of customer loyalty. The foods company has a brand portfolio that crowds supermarket shelves and must be the envy of rivals – Maxwell House coffee, Velveeta, Planters nuts, Jell-O, Oscar Mayer, and of course Kraft macaroni and cheese and Heinz ketchup. To boot, it also has Warren Buffett’s Berkshire Hathaway as its biggest investor with a 26.7% equity stake; New York City-based private equity firm 3G Capital is the next biggest investor with a 23.9% stake. Kraft Heinz CEO Bernardo Hees blamed higher manufacturing and logistics costs with rising commodity prices and the inability to extract more savings from the 2015 merger between Kraft and Heinz. However, a millstone has been its long-term debt of nearly $31 billion, which works out to a leverage multiple of 4.4 times its 2018 adjusted earnings, as a CNN report noted.…

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