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The Heinz-McDonald’s breakup probably isn’t that big of a deal, and has more to do with Brazil

Heinz

Breathlessly, The Huffington Post called it “the divorce of the century.” But in reality, McDonald’s and Heinz have been through this dance before — notably in 1973, when a tomato shortage caused Heinz to focus less on their bulk fast-food accounts. After that, many Heinz executives believed they were “on the outside looking in,” and in fact, U.S. customers would only have experienced Heinz ketchup in a Mickey D’s in Pittsburgh or Minneapolis. All other locations use private label ketchup; it’s generally slugged “McDonald’s Fancy Ketchup.”

Heinz could be hit hardest overseas — that’s where its ketchup tends to be more proactively paired with the Golden Arches — but in recent years, Heinz has actually become a fairly diversified company. Ketchup is the cornerstone of their brand, but as of December 2011, they actually have pretty strong market share around the world across a variety of their brands. They have ownership of T.G.I. Friday’s brands, although Carlson Companies is still the parent corporation there.

If you want a deep dive on the McDonald’s-Heinz breakup and why it essentially took root in Brazil, read this from The Daily Beast. 3G Capital, now under Warren Buffet’s watchful investment eye, is continuing the trend of Brazilians grabbing American companies with global value chains; this happened when InBev bought Anheuser-Busch as well (InBev was, at the time, run by a Brazilian). Brazil isn’t emerging as the economic superpower that everyone thought it could be, but the trend of Brazilians buying American companies is well-established. It hasn’t necessarily been working the other way:

All this is taking place as McDonald’s looks to face a tough fourth quarter and Heinz Field just became a house of horrors, as the Steelers look gawd-awful. Meanwhile, if you want to see the raw video of the press conference that set all this in motion — and ended what ultimately wasn’t even much of a partnership anymore, but seems like a huge deal to American fast food consumers regardless — here you go:

 

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