New York CNN Business  — 

Kraft Heinz is having an absolutely miserable 2019. The ketchup and cheese company’s stock has plunged nearly 35% this year.

Investors are growing concerned that the company focused too much on cost cutting following the 2015 merger of Kraft and Heinz and not enough on finding new, innovative food products that younger consumers would actually want to buy and eat.

Making matters worse, Kraft Heinz (KHC) is enduring an accounting nightmare that has caused it to restate earnings for 2016 and 2017 because of employee misconduct.

The company is now dealing with a probe from the Securities and Exchange Commission and has yet to file its latest quarterly results to investors as a result.

More bad news could come.

“We have no visibility into whether the SEC is satisfied with the company’s response [to its queries],” said Credit Suisse’s Robert Moskow in a recent report. Investors also don’t know if Kraft Heinz’s accountant PwC will sign off on its latest financials.

Kraft Heinz’s poor performance is even dragging down the portfolio of Warren Buffett’s Berkshire Hathaway (BRKB), whose stock is down more than 1% this year.

According to Buffett’s latest annual letter to Berkshire shareholders in February, the cost basis — i.e. the amount Berkshire paid for its 325.4 million shares — for its Kraft Heinz investment was $9.8 billion. But with the stock now trading around $28.50 a share, Berkshire’s stake is now worth just $9.3 billion. The Oracle of Omaha is sitting on a $500 million loss on paper.

It’s unclear if Kraft Heinz will be able to right the ship anytime soon. Kraft Heinz did not respond to a request for comment. Neither did Berkshire Hathaway.

Not enough innovation at Kraft Heinz

The aggressive cost cutting and layoffs at Kraft Heinz may be the root of the accounting problems, Credit Suisse’s Moskow thinks. The company has been slashing costs and jobs since Buffett’s investing partner 3G Capital took over the Kraft Heinz’s management.

“We fear that the dramatic reduction in Kraft Heinz’ headcount after its merger may have played a role in the breakdown of internal controls. When a company loses institutional knowledge in highly complex areas of the business, the consequences can be severe,” he wrote.

The accounting issues and delayed earnings are clearly a distraction that the company doesn’t need at a time when many other food companies are doing their best to launch innovative new products — either organically or through acquisition.

The success of plant-based food company Beyond Meat (BYND) since its initial public offering and all the buzz about privately held rival Impossible Foods, which has partnered with Burger King on an Impossible Whopper and recently raised a new round of financing from billionaire Jay-Z, Serena Williams and Katy Perry, shows that Kraft Heinz is missing out on the meatless trend.

Too little too late?

Other food giants have also been more aggressive with purchases of smaller, innovative rivals.

General Mills (GIS) bought organic mac and cheese maker 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.

Kraft Heinz is trying to fight back with deals of its own. Its Canadian unit acquired Vancouver-based fairtrade, organic coffee company Organic Bean last September and Kraft Heinz also purchased Primal Nutrition, which makes healthier versions of mayonnaise and salad dressings as well as avocado oil.

But these deals are relatively small and may not move the needle financially for Kraft Heinz as quickly as investors would like.

And if all this weren’t bad enough, an outbreak of African swine fever could pose another big problem for Kraft Heinz.

BMO Capital Markets analyst Andrew Strelzik noted in a report last month that Kraft Heinz generates more than 20% of its retail sales from meat proteins due to its Oscar Mayer cold cuts business. That’s the highest percentage among the major food firms.

Strelzik argued that costs for pork will likely rise because of the outbreak. That could put further pressure on profits at Kraft Heinz for the second half of this year and 2020. That’s the last thing Kraft Heinz needs.