UPDATE: Why McDonald’s Stopped Serving Fancy Ketchup
If you remember, we talked about McDonald's lack of "Fancy" distinction on their ketchup packets earlier this month. A small innate detail that most adults can probably remember from their childhood, regular old ketchup wasn't good enough for your favorite fries, it had to be fancy ketchup.
As you and I learned in wasting our time researching it that day, "fancy" is just a marketing designation to assert the quality of the product - ie - how much of the condiment is actually made of tomatoes. I know, it's weird. We also learned that Heinz made that fancy ketchup for McDonald's.
Having not found a reason for why McD's ditched their fancy ketchup, the logical jump to conclusions was they probably found a way to make it themselves cheaper. We've all heard stories about how an airline started serving two olives instead of three with their regular in-flight meals to save a million dollars a year, so it's not a far-fetched theory.
As it turned out, that theory was wrong.
The real reason McDonald's stopped offering the same old Heinz fancy ketchup is pettiness. It wasn't an argument over price, manufacturing, supply, demand, etc... It all came down to who Wall Street hired to run the Heinz company.
Way back in February of 2013, the Heinz company was sold off to America's most famous investor Warren Buffet and an investment firm out of Brazil called 3G Capital. It's not clear why it was necessary to sell, but that's just how Wall Street works.
Now, there's no reason that Brazillian-based investment group 3G Capital should sound familiar to you, they're off in a different part of the world... but you should know they're heavily invested in RBI - AKA - Restaurant Brands International... Who, at the time, was the controlling parent company of a little fast-food joint and McDonald's arch-enemy Burger King.
When the purchase of Heinz by these two investment conglomerates was complete, they had the option to name a new CEO to the condiment company. An obvious choice would be someone with experience in the food trade, with experience in how to make deals to sell to larger companies to makes stacks-on-stacks-on-stacks of cash...
After weeks of deliberation, the rumors that inevitably swirled, dozens of names that were tossed out, Buffet and 3G Capital announced an executive named Bernardo Hees would head the newly acquired H.J. Heinz Company.
Here's the rub that showed McDonald's pettiness...
Bernardo Hees had been the CEO and head honcho of industry-rival Burger King for the previous three years.
Within days of the new Heinz CEO announcement, McDonald's had legal papers drawn up to end the ketchup relationship with one of America's most successful home-grown companies.
Over the years McDonald's slowly transferred their ketchup orders to other manufacturers over the next couple of years, and if you try to follow the trail nowadays, it's impossible to find one source of McD's ketchup today. We just know it's no longer of a "fancy" standard of quality.
Here's another rub... If you eat at a McDonald's in Pittsburgh - home of Heinz - you'll still be served that classic Heinz Fancy Ketchup with your meal. After all, with such a rich history, how could they ever expect Steel City to accept any other substitute?
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