Kraft Heinz's giant setback could boost brand spending
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The stunning tumble of Kraft Heinz has caused pain for investors, particularly Warren Buffett. His Berkshire Hathaway suffered a huge hit late last month after Kraft Heinz took a $15.4 billion write-down on its assets, including its storied Kraft and Oscar Mayer trademarks, which lopped one-third off the value of its stock.
But Buffett’s loss could be advertising’s gain: The company’s plunge is energizing critics of the extreme cost-cutting pursued by Kraft Heinz under the leadership of Brazilian investment firm 3G Capital. Ultimately, ad agencies that rely on robust consumer packaged-goods spending could benefit, as 3G’s austere budgeting practices come under the microscope.
Paul Polman, who was CEO at Unilever when it fought back an acquisition attempt by Kraft Heinz in 2017, was among those exhibiting schadenfreude. “Wonder if they would have been able to destroy Unilever as well,” he tweeted on Feb. 23, two days after Kraft Heinz’s announcement. “Millions more would have…suffered.”
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