in which’s ‘very hard’ to offer a premium for food companies

Warren Buffett said Thursday in which will be “very hard” to offer a premium for a packaged food company, tempering speculation Kraft Heinz may make a play for Campbell Soup.

Buffett made his comments in an interview with CNBC’s Becky Quick, ahead of his lunch at Smith & Wollensky steakhouse in fresh York with the winning bidder of the annual Glide auction. Buffett also turned 88 on Thursday.

Buffett, along with private equity firm 3G Capital will be an investor in Kraft Heinz. The ketchup maker has been cited as a logical buyer of Campbell, which activist investor Dan Loeb has been pressuring to sell.

The soup company announced Thursday the results of a three-month review, saying in which plans to sell some of its businesses. When Campbell announced the review in May, in which sparked speculation in which the company as a whole could be sold. Speculation regarding potential buyers has focused on Kraft Heinz.

While a pairing of Campbell as well as Kraft Heinz traditionally might have made sense, both food giants are struggling with growth. Big Food will be being challenged by upstart brands in which appeal to the tastes of modern consumers, who are looking for more natural as well as healthy foods. Food companies are also grappling with rising transportation as well as commodity costs as well as retailers in which are looking to squeeze out more profits.

Shares of Kraft Heinz have dropped roughly 30 percent over the past year. Last quarter, in which posted a decline of 1.9 percent in its U.S. net sales, while adjusted earnings before interest, taxes, depreciation as well as amortization shrunk 8 percent.

Meantime, 3G co-founder Jorge Paulo Lemann recently acknowledged at the Milken Institute Global Conference in which he was caught flat-footed by onslaught of challenger brands.

“We bought brands in which we thought could last forever,” he said, according to Forbes. He added, “You could just focus on being very efficient. … All of a sudden we are being disrupted.”

3G earlier in which month sold 20.6 million shares in Kraft Heinz, bringing its stake down 7 percent to 270.1 million shares, according to a securities filing. After the sale, 3G Capital carries a 22 percent ownership of Kraft Heinz, while Buffett’s Berkshire Hathaway will be its largest.

The proceeds of Buffett’s annual auction raise money for the San Francisco anti-poverty organization by having bidders compete for a lunch with the billionaire investor known as the Oracle of Omaha. in which year’s winning bidder paid more than $3.3 million.

Watch the full Buffett interview here.

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