Analysts now doubt if 3G's model was effective, given that the company's margins before interest and taxes fell to 23.2 percent in 2018 from 27.2 percent in 2015.
Bottles of Heinz tomato ketchup of USA food company Kraft Heinz are offered at a supermarket of Swiss retail group Coop in Zumikon, Switzerland December 13, 2016.
Kraft Heinz and other food makers that dominated grocery shelves for a good portion of the last century have been whipsawed by a seismic shift in what consumers want.
Kraft Heinz has recorded a $25m rise in costs for ingredients and other expenses that should have been recorded in previous quarters by its procurement arm amid an investigation by the US Securities and Exchange Commission into its accounting policies.
Kraft Heinz stock dropped 28 percent Friday after the company announced it was being investigated by the Securities and Exchange Commission.
Cut its dividend by 36%.
Families, particularly in the US, have pivoted away from familiar packaged foods amid a proliferation of products marketed as being more wholesome, or that promise new tastes. Its overall global sales also edged up, but its profit when excluding one-time charges still fell short of Wall Street expectations.
Created in 2015 by the merger of Kraft Foods and HJ Heinz, it is controlled by Berkshire Hathaway and the 3G Capital investment firm, which is known for its cost-cutting approach to its businesses.
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But the strategy apparently didn't work as planned at Kraft Heinz.
"There is no question we are disappointed that profitability did not ramp up with consumption gains", said Chief Executive Officer Bernardo Hees, who is also a 3G partner, during the earnings call.
"Investors for years have asked if 3G's extreme belt-tightening model ultimately would result in brand equity erosion", Goldman wrote. The company said the litigation costs related to the SEC probe had incurred an extra expense of $25 million on top of regular costs of products for the quarter.
"We think the answer arguably came yesterday in the form of a US$15 billion intangible asset write-down for the Kraft and Oscar Mayer brands", said Goldman, who cut his rating to "neutral" from "overweight".
Kraft's bond yield spread over Treasuries-a market gauge of company credit risk-briefly jumped by about 40 basis points on Friday morning.
Stifel downgraded the stock to "hold" from "buy" and more than halved its price target to US$35, well below the current median target of US$52.
"The cost-cutting mentality is coming back to bite them", said Ken Shea, an analyst at Bloomberg Intelligence.
Two years later, Kraft Heinz tried and failed to acquire Unilever for $143 billion in a deal that might have allowed it to continue cutting costs and increasing margins, analysts said.