American investment tycoon Warren Buffett’s Berkshire Hathaway company disclosed in its financial report on Saturday that it has written down the investment value of food giant Kraft Heinz by $3.8 billion, reflecting the continued poor performance of this long-term investment.
As of the end of June, Berkshire Hathaway stated that it has adjusted the book value of its stake in Kraft Heinz to $8.4 billion. Since the merger of Kraft and Heinz to form the new company in 2015, the stock price has fallen by 62%, while the S&P 500 index has risen by 202% during the same period. Despite this, Buffett’s overall investments are still profitable, but this transaction is seen as one of the few “disappointing” investments.
Kraft Heinz is a major American food and consumer goods manufacturer, with products including Heinz ketchup, Kraft cheese, Oscar Mayer ham, deeply rooted in American households’ daily diets. However, in recent years, it has faced inflation pressures and changes in consumer eating habits, leading to a weakening demand for its high-salt, high-fat products. The company is considering splitting off some grocery business, as two directors appointed by Berkshire resigned in May.
Last month’s financial report showed that while Kraft Heinz sales have declined, it was not as severe as the market had expected, mainly due to pricing strategies partially offsetting the impact of declining shipments.
Berkshire also released its second-quarter financial report on the same day, with operating profit decreasing by 4% to $11.16 billion and net profit plunging by 59% to $12.37 billion annually, indicating overall investment returns are under pressure. The insurance underwriting business performed weakly, but the railroad, energy, manufacturing, service, and retail sectors saw general growth.
As one of the world’s largest conglomerates, Berkshire pointed out that the tariff policy newly implemented by President Trump brings uncertainty for the company’s future. The report stated, “In the first half of 2025, international trade policy changes and tariffs continue to intensify.” It also mentioned, “There is no ruling out that most of our operational businesses and stock investments will be adversely affected in the future, posing significant challenges to our profitability.”
As of the end of June, Berkshire’s cash and short-term investments totaled $344.1 billion, slightly lower than the $347 billion at the end of the first quarter but still close to a historical high. The company has been a net seller for 11 consecutive quarters, selling stocks worth $4.5 billion in the first half of this year. Additionally, despite the stock price falling by over 10% from its peak, Berkshire did not engage in stock buybacks in the first half of the year.
This also marks the first financial report after 94-year-old Warren Buffett announced he would step down as CEO at the end of the year. At that time, Vice Chairman Greg Abel will take over as CEO, while Buffett will remain as chairman of the board.