CHICAGO, IL - MARCH 25: In this photo illustration, Kraft and Heinz products are shown on March 25, 2015 in Chicago, Illinois. Kraft Foods Group Inc. said it will merge with H.J. Heinz Co. to form the third largest food and beverage company in North America with revenue of about $28 billion.  (Photo by Scott Olson/Getty Images)
Scott Olson/Getty Images
CHICAGO, IL - MARCH 25: In this photo illustration, Kraft and Heinz products are shown on March 25, 2015 in Chicago, Illinois. Kraft Foods Group Inc. said it will merge with H.J. Heinz Co. to form the third largest food and beverage company in North America with revenue of about $28 billion. (Photo by Scott Olson/Getty Images)
Now playing
01:08
Kraft Heinz shares tank on slew of bad news
Now playing
04:22
Levi's CEO has message for Mitch McConnell
Elon Musk's Neuralink says this monkey is playing Pong with its mind
From Neuralink/Youtube
Elon Musk's Neuralink says this monkey is playing Pong with its mind
Now playing
01:41
Elon Musk's company says this monkey is playing Pong with his mind
CNN
Now playing
02:36
The truth behind Covid-19 vaccines for sale on the dark web
Heinz ketchup packets are shown in New York on Monday, August 22, 2005. H.J. Heinz Co., the world's biggest ketchup maker, said first-quarter profit fell 19 percent on expenses to cut jobs and sell businesses.  (Photo by Andrew Harrer/Bloomberg via Getty Images)
Andrew Harrer/Bloomberg/Getty Images
Heinz ketchup packets are shown in New York on Monday, August 22, 2005. H.J. Heinz Co., the world's biggest ketchup maker, said first-quarter profit fell 19 percent on expenses to cut jobs and sell businesses. (Photo by Andrew Harrer/Bloomberg via Getty Images)
Now playing
01:53
Restaurants face a nationwide ketchup packet shortage
CNN
Now playing
03:53
Norwegian Cruise Line CEO to CDC: We want to be treated fairly
Getty Images
Now playing
02:18
This airplane-shaped bag is selling for more than some actual planes
A medical worker prepares to administer a dose of the AstraZeneca vaccine in Belgrade, Serbia, Tuesday, March 23, 2021. American federal health officials say results from a U.S. trial of AstraZeneca's COVID-19 vaccine may have included "outdated information" and that could mean the company provided an incomplete view of efficacy data. (AP Photo/Darko Vojinovic)
Darko Vojinovic/AP
A medical worker prepares to administer a dose of the AstraZeneca vaccine in Belgrade, Serbia, Tuesday, March 23, 2021. American federal health officials say results from a U.S. trial of AstraZeneca's COVID-19 vaccine may have included "outdated information" and that could mean the company provided an incomplete view of efficacy data. (AP Photo/Darko Vojinovic)
Now playing
03:46
These are all the complications AstraZeneca's vaccine has faced
A driver rides his car in front of the Lyft Drivers Hub in Los Angeles, California, March 29, 2019. Ride-hailing company Lyft made its Initial Public Offering (IPO) on the Nasdaq Stock Market on March 29th. (Photo by Apu Gomes/AFP/Getty Images)
Apu Gomes/AFP/Getty Images
A driver rides his car in front of the Lyft Drivers Hub in Los Angeles, California, March 29, 2019. Ride-hailing company Lyft made its Initial Public Offering (IPO) on the Nasdaq Stock Market on March 29th. (Photo by Apu Gomes/AFP/Getty Images)
Now playing
04:55
Lyft co-founder: Supporting voter access is important for business
Citigroup Chairman Richard Parsons delivers remarks on the US economy at the New York State Bar Association meetings in New York, January 28, 2009. Troubled US banking giant Citigroup last week named Parsons as its new chairman, the longtime top executive at media giant Time Warner, to steer it through its most challenging period.  AFP PHOTO / Emmanuel Dunand (Photo credit should read EMMANUEL DUNAND/AFP via Getty Images)
EMMANUEL DUNAND/AFP/AFP via Getty Images
Citigroup Chairman Richard Parsons delivers remarks on the US economy at the New York State Bar Association meetings in New York, January 28, 2009. Troubled US banking giant Citigroup last week named Parsons as its new chairman, the longtime top executive at media giant Time Warner, to steer it through its most challenging period. AFP PHOTO / Emmanuel Dunand (Photo credit should read EMMANUEL DUNAND/AFP via Getty Images)
Now playing
02:47
Dick Parsons: Georgia law is a bald-faced attempt to suppress Black vote
Resturant Yurkevcih Pkg 1
CNN
Resturant Yurkevcih Pkg 1
Now playing
02:55
Restaurants are still struggling, but see hope on the horizon
WASHINGTON, DC - SEPTEMBER 16:  Patrick Soon-Shiong, chairman and CEO of the Institute for Advanced Health, participates in a discussion at the Bipartisan Policy Center, September 16, 2014 in Washington, DC.  The Bipartisan Policy Center released a report titled Innovative Strategies from America's Business Leaders.  (Photo by Mark Wilson/Getty Images)
Mark Wilson/Getty Images North America/Getty Images
WASHINGTON, DC - SEPTEMBER 16: Patrick Soon-Shiong, chairman and CEO of the Institute for Advanced Health, participates in a discussion at the Bipartisan Policy Center, September 16, 2014 in Washington, DC. The Bipartisan Policy Center released a report titled Innovative Strategies from America's Business Leaders. (Photo by Mark Wilson/Getty Images)
Now playing
04:04
Patrick Soon-Shiong: We have to recognize racism and 'break it'
ATLANTA, GA - MARCH 03: Demonstrators stand outside of the Georgia Capitol building, to oppose the HB 531 bill on March 3, 2021 in Atlanta, Georgia. HB 531 will add controversial voting restrictions to the state's upcoming elections including restricting ballot drop boxes, requiring an ID requirement for absentee voting and limiting weekend early voting days. The Georgia House passed the bill and will send it to the Senate. (Photo by Megan Varner/Getty Images)
Megan Varner/Getty Images
ATLANTA, GA - MARCH 03: Demonstrators stand outside of the Georgia Capitol building, to oppose the HB 531 bill on March 3, 2021 in Atlanta, Georgia. HB 531 will add controversial voting restrictions to the state's upcoming elections including restricting ballot drop boxes, requiring an ID requirement for absentee voting and limiting weekend early voting days. The Georgia House passed the bill and will send it to the Senate. (Photo by Megan Varner/Getty Images)
Now playing
02:24
Coca Cola, Delta Airlines strike back at Georgia voting laws
Now playing
03:08
'I want women to be as rich as humanly possible': Meet TikTok's wealth coaches
Now playing
05:41
NFTs have completely transformed these digital artists' lives
P&G
Now playing
01:45
This new P&G ad confronts stereotypes against Black Americans
(CNN Business) —  

It seems that Kraft Heinz was so focused on cutting costs that it forgot the most important thing for a food company to do: Make tasty products that people actually want to buy and eat.

Kraft Heinz shocked investors Thursday when it posted a gigantic loss due to the writedown of its Kraft and Oscar Mayer brands, slashed its dividend and disclosed an SEC probe into its accounting.

Investors never like to find out the SEC is investigating a company’s books. But the bigger problem for Kraft Heinz is that analysts are now questioning the company’s strategy and are worried that it has lost its way in the highly competitive food business.

Kraft Heinz (KHC) was created nearly four years ago when Heinz, which was bought by Warren Buffett’s Berkshire Hathaway (BRKB) and private equity firm 3G Capital in 2013, merged with Kraft. 3G installed one of its partners, Bernardo Hees, as Heinz CEO after that deal and Hees is now the leader of Kraft Heinz (KHC).

The combined company quickly went to work to reduce expenses after their merger in order to boost profits. Kraft Heinz even hoped that another deal could lead to more big savings.

Kraft Heinz bid more than $140 billion in 2017 for UK-Dutch food and beauty products conglomerate Unilever (UN) (UL), the owner of Ben & Jerry’s, Lipton and Hellmann’s as well as Dove, Vaseline and Q-Tips. Unilever (UN) (UL) rejected the deal and Kraft Heinz walked away.

Kraft Heinz needs healthier food

It’s been all downhill for the company since. Shares have plunged more than 60% during the past two years, including Friday’s 26% drop due to the latest bad news.

Analysts rushed to downgrade Kraft Heinz shares Friday.

Many were quick to point out that the biggest problem for Kraft Heinz, the maker of Jell-O and Kraft Macaroni & Cheese, is that the company hasn’t adapted to changing consumer tastes. There’s a growing interest in healthier and organic food as opposed to processed cheese and lunch meat.

Several of Kraft Heinz’ competitors have already latched on to this trend.

General Mills (GIS) bought Annie’s in 2014. Hershey (HSY) acquired SkinnyPop maker Amplify Snack Brands in 2017 and also bought the maker of Pirate’s Booty from B&G Foods, last year. And ConAgra (CAG) scooped up Pinnacle, owner of Smart Balance and the Udi’s brand of gluten free food last year.

Analysts have grown sour on the Kraft Heinz deal strategy

If Kraft Heinz was hoping to expand in organic food through acquisitions, that may now be tough, if not impossible, to do. The window for any future mergers may have been sealed shut.

“We now must accept that getting an attractive deal done may be less likely than we had hoped,” said Michael Lavery, an analyst with Piper Jaffray, in a report Friday. Lavery was one of several analysts to downgrade Kraft Heinz following its deluge of bad news.

JPMorgan’s Ken Goldman also downgraded the stock. And he was painfully blunt about his thoughts on the company’s strategy.

“We think it is fair to ask if 3G has created any value since Kraft and Heinz merged,” Goldman wrote.

Stifel analyst Christopher Growe downgraded Kraft Heinz as well. He also expressed growing impatience with the company.

“Gone are the days of investors giving this management team instant credit for any future cost savings from an acquisition – we believe investors will maintain a skeptical eye,” Growe wrote.

Despite this, Kraft Heinz management still seems to think that acquisitions will be a big part of its growth strategy. The company mentioned “future consolidation” eight times during a conference call with analysts Thursday.

Food deflation in aisle 11 due to Amazon and Walmart

But even before Thursday’s earnings bombshell, many investors were worried about the pressure Kraft Heinz and other food companies were facing.

Prices have come down for many supermarket staples as Amazon (AMZN)/Whole Foods, Walmart (WMT) and Target (TGT) become even bigger players in the grocery business. That’s hurt profit margins.

So it should come as no surprise that Kraft Heinz wasn’t the only food stock tumbling Friday. Its bad news spilled over to rivals ConAgra, General Mills, Campbell Soup (CPB), Smucker (SJM) and Kellogg (K) as well.