Should You Invest in Kraft Heinz?

OVERVIEW

The Kraft Heinz Company is a company based in the United States. The company manufactures and sells a wide range of food products around the world. The company operates under Capri Sun, Kraft, Heinz, Oscar Mayer, and many others. The company was founded in 1869.

Why You Should?

  1. Kraft Heinz is a great reopening play in an investor’s portfolio. The company saw a drop in demand for many of its commercial products as the pandemic shut down many restaurants and large venues. However, once the pandemic is over, the company will see strong growth across most of its brand categories.
  2. The COVID-19 pandemic also had some positive impacts on the company. The company saw consumer sales of food products like its line of condiments saw a dramatic increase in sales and growth as consumers around the world stocked up on food with a high shelf-life. This initial growth at the start of the pandemic helped the company go through a tough time.
  3. Kraft Heinz, like many other food companies, is a fairly safe investment option in an investor’s portfolio. Despite the economic times, consumers will continue to spend on cheap food products, like the ones that Kraft Heinz sells. The essential products that the company sells will benefit the company and its investors.

Why You Should Not?

  1. The company faces tough competition in the food industry. Some of these competitors include J. M. Smuckers, Conagra Brands, Hershey’s, and many others. This competition might hurt the company and its investors in the future.
  2. Kraft Heinz continues to be negatively impacted by inflation and supply chain issues across the economy. The company has seen rising costs of labor, raw materials, and shipping solutions due to massive demand and low supply of these products and services. This will continue to hurt the company and its investors until prices normalize.
  3. Kraft Heinz has seen sales growth starting to slow and fall in some markets as consumers around the world look for healthier and less processed food options. Consumers are shifting to a more organic and healthier lifestyle and have seen the negative impacts of having a diet with a lot of processed foods. This has hurt the company and its investors.
  4. The company continues to disappoint investors across multiple fronts. From slashing its dividend to taking multi-billion dollar losses on important brands like Kraft and Oscar Mayer, the company’s stock price has tanked over the past couple of years and has continued to underperform the market. This has hurt investors in the company and made Kraft Heinz a bad investment.

MY OPINION

I think that there are better food companies in the overall industry to invest in rather than Kraft Heinz because of tough competition, inflation and supply chain issues, changing consumer trends, as well as multi-billion dollar loss write-offs. However, the company is still a great reopening play, saw some benefits from the pandemic, and is a safe investment option as well.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.