The Intelligent Investor's Mistakes: Warren Buffett: 38 Buffett’s Investment Stories, Gain Wisdom, Master Risk and Maximize Profits to Build Enduring Wealth

by Balaji Kasal

Since its acquisition, Kraft Heinz’s revenue has been struggling to grow. The company's valuation at Nasdaq reflects this, even though the company has tried to transform itself continuously through restructuring its operations. In the process, it sold off units like nuts and specialty cheese, while acquiring sauces and condiment companies. The crux of the issue: Kraft Heinz products have limited brand power. Hence, the company faces challenges while dealing with retailers, specifically, biggies. It limits the bargaining power. While these retailers always try to push their own private brands. One such case is Costco’s ‘Kirkland’, marketed as better quality at a lower price. This single brand at Costco earns more than 50% of sales as compared to the overall sales of Kraft Heinz. The Kirkland brand has been around for only thirty years, while the Kraft brand has existed for more than 100 years. Also, Kraft spends heavily on advertising.