Kraft Heinz shares slide 8% as shoppers skip processed food

Kraft Heinz is still struggling to adapt to consumers' changing tastes and their aversion to processed food. In this photo illustration, Heinz products are shown on March 25, 2015 in Chicago, Illinois.

Kraft Heinz is still struggling to adapt to consumers' changing tastes and their aversion to processed food.

The ketchup and macaroni king reported fourth quarter sales Thursday that fell 5% and missed Wall Street's forecasts.

Although earnings beat analysts' estimates, shares of Kraft Heinz fell 8%. The stock is now down nearly 40% in the past year, and has plunged almost 70% in the past three years.

Kraft Heinz has faced many challenges in the past few years, including accounting issues and a slide in sales and earnings as people try to eat fewer processed foods and embrace plant-based products.

The company's poor performance has also hurt the investment portfolio of Warren Buffett's Berkshire Hathaway.

Kraft Heinz is still a top holding for Berkshire, but 3G, the private equity firm that Buffett teamed up with first to buy Heinz in 2013 and then merge with Kraft in 2015, sold a big chunk of its stake last year.

Kraft Heinz also named a new CEO in 2019. Miguel Patricio, a veteran executive at Anheuser-Busch InBev, took over last July. He replaced Bernardo Hees, a partner at 3G who had been CEO at Heinz before the Kraft deal and then led the combined company.

Patricio said in a press release Thursday that "our 2019 results were disappointing" and vowed to make improvements, adding that Kraft Heinz is "making necessary investments in our brands based on deep consumer insights."

But it will not be an easy fix.

The company stunned Wall Street a year ago when it announced a $15 billion writedown of its Kraft and Oscar Mayer brands. Kraft Heinz followed that up in August with a nearly $500 million writedown in the value of several other poorly performing brands, including Velveeta, Maxwell House and Miracle Whip.

"Our turnaround will take time, but we expect to make significant progress in 2020, laying a strong foundation for future growth," Patricio said.

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