What happened

Kraft Heinz (NASDAQ:KHC) stock shed 11% last year, compared to the 19% increase in the broader market, according to data provided by S&P Global Market Intelligence.

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Shares pulled ahead of the market in February, but that slight outperformance didn't hold as the year progressed.

So what

Kraft Heinz's share-price drift makes sense given how unclear its growth prospects are. Its offer to acquire Unilever was rebuffed, and, with stocks up sharply since then, the prospects for attractively priced merger deals have thinned.

A woman pushes a shopping cart through a grocery store aisle.

Image source: Getty Images.

The consumer products giant isn't producing solid revenue gains from its core business, either. Organic sales in the most recent quarter were up 0.3% to mark just a tiny improvement over the prior quarter's 0.9% decrease.

Now what

CEO Bernardo Hees and his team aren't expecting a quick rebound in the fiscal fourth quarter. In fact, the market for packaged foods is "both dynamic and challenging," executives told investors in early November. The good news is management is executing well on its efficiency initiatives despite these problems. Cost cuts have pushed profit margin up to 15% of sales from 12.7% a year ago. That success sets the stage for healthy earnings growth down the line -- assuming Kraft Heinz can find a path toward its next phase of revenue gains.

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