By Heather Haddon and Micah Maidenberg
Kraft Heinz Co. replaced its chief financial officer with his predecessor after accounting errors and weak sales at the food giant have undermined the value of its brands and shares.
The Chicago-based company said on Monday that finance chief David Knopf, 31 years old, will return to 3G Capital, the private-equity firm that worked with Warren Buffett's Berkshire Hathaway Inc. to create Kraft Heinz through a merger in 2015.
Mr. Knopf will be replaced next month by Paulo Basilio, 44, who became finance chief of H.J. Heinz Holding Corp. in 2013 and retained that title for Kraft Heinz after the merger. In 2017, Mr. Basilio became president of Kraft Heinz's U.S. commercial business and last month became chief business planning and development officer.
Berkshire Hathaway and 3G remain top shareholders in Kraft Heinz. The stock, which was roughly flat on Monday, has declined 41% this year.
Kraft Heinz has struggled to generate sales growth in its stable of well-known brands, such as Oscar Mayer hot dogs and Kraft macaroni and cheese, that in many cases are out of step with trends toward more natural and healthful products. A big cost-cutting drive after the merger also diminished its ability to promote new or improved products, some former employees say.
Chief Executive Miguel Patricio, a former executive at Anheuser-Busch InBev SA who took the top job at Kraft Heinz in June, has said that he wants to revive sales of established brands without straying from 3G's focus on controlling costs.
"We have many opportunities ahead of us at Kraft Heinz as we chart a new course and rebuild our business momentum with a focus on driving long-term profitable growth," Mr. Patricio said in an email Monday morning to employees about the management changes.
Kraft Heinz said also said Monday that Nina Barton, currently the company's top executive for Canada and digital growth initiatives, will be promoted to the new position of chief growth officer. Carlos Piani, head of strategic initiatives and mergers and acquisitions, is leaving Kraft Heinz to pursue other opportunities, Mr. Patricio said in his note.
Some investors have urged Kraft Heinz to look beyond its own staff and other 3G companies for new leaders. Mr. Basilio and Mr. Knopf have been partners at the private-equity firm since 2012 and 2015, respectively. Also, some 3G executives are investors in Mr. Patricio's former employer, AB InBev.
"3G is again rotating talent," John Baumgartner, a food industry analyst at Wells Fargo, wrote in a research note.
Mr. Patricio in announcing Mr. Basilio's appointment, told Kraft Heinz employees that he wanted a seasoned executive in the finance job.
Kraft Heinz has marked down the value of its brands by nearly $17 billion this year after reporting slowing sales and a federal investigation into the accounting errors. The probe by the Securities and Exchange Commission continues.
The company has restated financial earnings as far back as 2016 after disclosing that it had understated the cost of goods sold by $208 million across roughly three years. The understatements pertained to how it booked rebates and expenses related to contracts with suppliers, the company has said.
Mr. Basilio was finance chief during part of the period when those misstatements were made. Kraft Heinz has said that top officials didn't know about the errors at the time and that it fired some employees who were responsible.
A Kraft Heinz spokesman declined to comment further on the procurement problems.
Mr. Knopf, who worked at Goldman Sachs after graduating from Princeton University, joined Kraft Heinz as a vice president of finance in 2015. When he became chief financial officer in October 2017 at the age of 29, he was the youngest finance chief of a Fortune 500 company.
Mr. Knopf has faced pointed questions from investors this year in connection with the company's delayed earnings reports. In February, Kraft Heinz wrote down the value of its Oscar Mayer and Kraft Heinz brands by $15.4 billion. Earlier this month it took a $1.22 billion write-down of assets, including international divisions and its U.S. refrigerated-foods unit.
"We are dissatisfied with our financial performance year-to-date," Mr. Knopf told analysts this month.
The food giant earlier this month reported net sales of $12.37 billion for the first half, down 5% from a year earlier.
Sales of older brands, including Maxwell House coffee and Velveeta cheese, remain weak, according to Nielsen data cited by analysts at Guggenheim Securities LLC. During the four weeks ended Aug. 10, retail sales of Kraft products fell 0.5%, according to Guggenheim.
Write to Heather Haddon at email@example.com and Micah Maidenberg at firstname.lastname@example.org