Constellation Brands and Kraft Heinz: Market Underperformers Face Structural Challenges

Constellation Brands (STZ) and Kraft Heinz (KHC), both held in Warren Buffett's Berkshire Hathaway portfolio, have significantly underperformed the broader market over the past year. Constellation's stock plummeted over 40%, while Kraft Heinz declined 25%, contrasting with the S&P 500's 20% gain.

Constellation's beer-centric business—anchored by Mexican imports like Modelo and Corona—faces dual pressures: exposure to U.S.-Mexico trade tensions and shifting demographics. Despite Berkshire's $1.96 billion bet on the alcohol giant, tariffs and weakening demand among Hispanic consumers cloud its outlook.

Kraft Heinz, in which Berkshire maintains an $8.8 billion position, struggles with stagnant growth in its packaged food empire. The 2015 merger engineered by Buffett and 3G Capital now grapples with evolving consumer preferences toward fresh and organic alternatives.