Warren Buffett's Investment Hit on Kraft Heinz Impairment

Berkshire Hathaway Inc. is a leading American multinational conglomerate holding company based in Omaha, Nebraska. Originally founded as a textile manufacturer, it transformed into a diversified conglomerate starting in 1965 under Warren Buffett’s leadership, who served as chairman and CEO until 2023, with Charlie Munger as vice chairman until that year. Greg Abel has succeeded Buffett as CEO, overseeing the company’s investments and operations[1][2]. Berkshire Hathaway is renowned for its unique business model that combines full ownership of a variety of subsidiaries with significant equity stakes in publicly traded companies. Its portfolio includes wholly owned companies like GEICO (insurance), Dairy Queen (food retail), and BNSF Railway (transportation). Additionally, Berkshire holds influential stakes in firms such as American Express and Kraft Heinz, without necessarily seeking full control[2]. Under Buffett and Munger’s value investing philosophy, the company has generated impressive shareholder returns. From 1965 to 2023, Berkshire Hathaway’s compound annual growth rate (CAGR) was 19.8%, significantly outperforming the S&P 500’s 10.2% CAGR. Even in recent years, its performance has remained competitive with the broader market. In August 2024, Berkshire became the eighth U.S. public company—and the first non-tech firm—to surpass a $1 trillion market capitalization, marking a milestone in corporate valuation[1][2]. Berkshire’s Class A shares are notable for having the highest per-share price globally, exceeding $700,000 as of August 2024, since the company has historically avoided stock splits. It ranks 5th on the Fortune 500 list by total revenue and 9th on the Fortune Global 500, also standing among the largest U.S. employers[1]. In 2025, Berkshire Hathaway's stock demonstrated resilience amid market volatility, gaining 17.3% through April, due in part to its distinct portfolio compositio

The Kraft Heinz Company is a leading global food and beverage corporation known for its extensive portfolio of iconic brands, including Kraft, Heinz, Oscar Mayer, Philadelphia, and Capri Sun. It operates across multiple categories such as condiments, cheese, meats, beverages, and snacks, serving consumers worldwide with a diverse range of products. The company is publicly traded on Nasdaq under the ticker symbol KHC. Formed in 2015 through the merger of Kraft Foods Group and H.J. Heinz Company, this union created one of the largest food and beverage companies globally. The merger combined Kraft’s strong presence in cheese and dairy with Heinz’s leadership in condiments and sauces, establishing a powerful platform for innovation and market reach. Since its inception, Kraft Heinz has focused on leveraging scale, operational efficiency, and brand strength to drive growth and profitability. In recent years, Kraft Heinz has been actively evolving its business strategy. Notably, in 2025, the company announced plans to split into two scaled, focused companies to accelerate profitable growth and unlock shareholder value, signaling a strategic pivot to enhance agility and better address market demands[1]. This move reflects the company’s responsiveness to changing consumer trends and competitive dynamics in the food industry. Financially, Kraft Heinz maintains a strong market presence with consistent quarterly reporting, including upcoming third-quarter 2025 results scheduled for release on October 29, 2025[2][3]. The company’s emphasis on innovation, quality, and sustainability continues to be central to its operations, aiming to meet evolving consumer preferences while driving business performance. Kraft Heinz’s notable aspects include its global footprint, iconic brand portfolio, and strategic adaptability in a highly competitive sector, making it a key player for those interested in business and food technology developments.

## Overview 3G Capital is a prominent global investment firm headquartered in New York City, with a secondary office in Rio de Janeiro[1][4]. The firm is widely recognized for its focus on long-term value creation, operational excellence, and deep sector expertise—particularly within consumer brands and retail industries[1]. Unlike traditional private equity firms, 3G Capital stands out for its hands-on, owner-operator approach, often taking significant management roles in its portfolio companies to drive transformation and efficiency[1][3]. ## History Founded in late 2004 by Brazilian billionaires Jorge Paulo Lemann, Marcel Telles, and Carlos Alberto Sicupira, 3G Capital evolved from their original investment office[1][2][3]. The trio, who amassed substantial wealth in Brazilian investment banking, established 3G Capital to manage and grow their personal fortunes alongside a select group of trusted family offices[2]. Alexandre Behring, who has managed their investments since the 1990s, is also a key figure in the firm’s leadership[2][3]. The firm has remained relatively private, with its partners as the largest investors, and has historically focused on a small number of high-impact acquisitions[2]. ## Key Achievements 3G Capital’s portfolio is marked by several transformative deals in the consumer sector. In 2010, the firm acquired Burger King, revitalizing the brand and eventually taking it public again before exiting after 15 years[1][2]. Perhaps its most notable transaction was the 2013 acquisition of H.J. Heinz in partnership with Warren Buffett’s Berkshire Hathaway, followed by the merger of Heinz with Kraft Foods to create Kraft Heinz, one of the largest food companies globally[1]. More recently, in 2022, 3G Capital completed a $7.1 billion take-private deal for Hunter Douglas, a leading Dutch window treatments brand[2]. The firm is also known for investments in CSX and other

Kraft Foods, founded by James L. Kraft in 1903, began as a wholesale cheese delivery business in Chicago. Kraft revolutionized the dairy industry by inventing pasteurized processed cheese in 1915, patented in 1916, which offered a longer shelf life without refrigeration. This innovation led to significant early success, including selling millions of pounds to the U.S. Army during World War I. The company quickly expanded, incorporating as J.L. Kraft & Bros. Company in 1909, opening its first cheese factory in 1914, and adopting innovative marketing methods such as color magazine ads and circulars to grocers[1][2][3]. Throughout the 20th century, Kraft grew into a food conglomerate with a diverse product portfolio, including iconic brands like Kraft Cheeses, Maxwell House coffee, and Post cereals. The company underwent several transformations: in 1924, it was renamed Kraft Cheese Company and went public; by the mid-20th century, Kraft broadened its product range and global reach. In 1989, Kraft was acquired by Philip Morris, which also owned General Foods, consolidating major food brands under one roof. Kraft regained independence in the 2000s, joining the Dow Jones Industrial Average in 2008, signaling renewed growth and market significance[1][2][3][4]. A defining moment came in 2015 when Kraft Foods merged with Heinz, forming Kraft Heinz, a global powerhouse in the food and beverage industry. This merger combined Kraft’s extensive distribution network with Heinz’s strong international brand presence, creating one of the world’s largest food companies valued in tens of billions. Today, Kraft Heinz continues to innovate and adapt to consumer trends, focusing on convenience, health-conscious products, and sustainability while maintaining its legacy of trusted, affordable food staples[5]. Kraft’s history is notable for technological innovation, strategic acquisitions, and marketing breakthroughs, making it a case study i

The H.J. Heinz Company, founded in 1869 by Henry John Heinz in Sharpsburg, Pennsylvania, began as a producer of horseradish and quickly expanded into a broad range of condiments and preserved foods including ketchup, pickles, vinegar, and apple butter[1][2][4]. After an initial business failure during the Panic of 1873, Heinz reorganized with family partners in 1876, introducing tomato ketchup that same year, which became one of its signature products[1][2]. By the early 20th century, Heinz had grown into the largest producer of pickles, vinegar, and ketchup in the United States, with a workforce exceeding 6,000 and 25 factories across the country and internationally[1][4]. Heinz was a pioneer in food safety and quality, advocating for the Pure Food and Drug Act of 1906 and implementing hygienic production methods that earned consumer trust[1][2]. The company also adopted progressive employee welfare policies, offering amenities such as roof gardens, libraries, and dining rooms[1]. Under successive family leadership—Henry Heinz followed by his son Howard and grandson Jack Heinz—the company expanded globally, establishing factories and offices in Europe and around the world, serving over 200 countries by the late 20th century[1][3]. The company’s iconic branding includes the “57 Varieties” slogan, devised in 1896, despite then producing over 60 products, symbolizing its diverse offerings and marketing ingenuity[4]. Heinz also achieved notable success in the UK with products like Heinz Baked Beans, Cream of Tomato Soup, and Salad Cream, which became staples despite economic hardships and wartime shortages in the 20th century[5]. Today, Heinz operates as a flagship division of the Kraft Heinz Company, formed by the 2015 merger of H.J. Heinz Holding Corporation and Kraft Foods Group, continuing it

IBM (International Business Machines Corporation), nicknamed "Big Blue," is a leading American multinational technology company headquartered in Armonk, New York, operating in over 175 countries. Founded in 1911 as the Computing-Tabulating-Recording Company (CTR), it was renamed IBM in 1924 and became a pioneer in computing technology, notably dominating the computer industry during the 1960s and 1970s with its IBM System/360 mainframe series. This system was revolutionary as the first to cover a full range of applications from small to large-scale computing[2]. IBM is renowned for its extensive industrial research organization, the largest globally, with 19 research facilities worldwide, and it held the record for the most U.S. patents annually for 29 consecutive years (1993–2021)[2]. Its mission focuses on making the world work better through innovation, business ethics, environmental responsibility, and responsible technology, impacting societies globally[3]. Today, IBM leads in hybrid cloud and artificial intelligence (AI) solutions, integrating software, consulting, infrastructure, and financing services. Its software segment, including automation and Red Hat, is the most profitable, driving growth alongside consulting and infrastructure services that focus on hybrid cloud platforms and AI deployment[1][4]. IBM's AI business alone is valued at over $9.5 billion, reflecting its strategic emphasis on AI-driven transformation[1]. Financially robust, IBM reported Q3 FY 2025 revenue of $16.3 billion, a 9% year-over-year increase, with expanding margins and a raised full-year outlook. The company is also innovating in AI-enabled mainframes and hybrid cloud strategies, supporting enterprise-scale AI adoption[1][7]. Notably, IBM is committed to environmental sustainability, targeting net-zero greenhouse gas emissions by 2030, and remains a significant contributor to technological advancement while facing scrutiny regarding some geopolitical involvements[2][3]. In summary, IBM is a historic yet forward-looking

## Overview Coca-Cola is one of the world’s most recognizable brands, synonymous with global beverage culture. The Coca-Cola Company, headquartered in Atlanta, Georgia, is a multinational corporation primarily engaged in the manufacture, distribution, and marketing of nonalcoholic beverage concentrates, syrups, and finished products, including its flagship Coca-Cola beverage[2][6]. The company operates in over 200 countries, offering a portfolio that extends beyond cola to include water, juices, sports drinks, teas, and energy drinks[6]. ## History Coca-Cola was invented in 1886 by Dr. John Stith Pemberton, an Atlanta pharmacist who sought to create a distinctive-tasting soft drink[1][2][4]. Originally marketed as a medicinal tonic, the beverage debuted at Jacobs’ Pharmacy in Atlanta, served as a syrup mixed with carbonated water[4][7]. Frank M. Robinson, Pemberton’s bookkeeper, coined the name “Coca-Cola” and designed its iconic script logo[1][2]. After Pemberton’s death in 1888, businessman Asa G. Candler acquired the company, aggressively expanding its distribution and pioneering innovative marketing tactics such as couponing and branded merchandise[1][5]. By 1895, Coca-Cola was sold across the United States, and in 1899, the first bottling agreements were established, enabling rapid global expansion[1][5]. ## Key Achievements Coca-Cola’s growth was fueled by strategic bottling partnerships, innovative advertising, and product diversification. The company’s advertising campaigns, celebrity endorsements, and global reach became hallmarks of its success[5]. Notable milestones include the introduction of Diet Coke in 1982, the brief but infamous launch of New Coke in 1985, and the acquisition of numerous beverage brands worldwide[6]. Coca-Cola was among the first to use recycled plastic in bottles and has consistently led industry sustainability initiatives[