What if there was a Ketchup War, yet no one showed up to fight?
The surprise deal that saw Berkshire Hathaway and 3G Capital Managementswoop in this with a $28 billion bid for ketchup maker H.J. Heinz, came with an interesting wrinkle that links two of the world's biggest burger behemoths.
Call it two degrees of supply chain separation: 3G owns a majority stake in Burger King, which is a direct competitor of McDonald's. Heinz — now partly owned and likely to be run by 3G — supplies red sauce to both fast food giants.
Heinz new ownership structure raised an improbable, yet plausible, possibility. If the new bosses at 3G wanted to squeeze Burger King's competition, it could terminate the agreement to supply Heinz ketchup to McDonalds.
To be certain, no industry analysts have called such a scenario,or are even willing to consider it. A clutch of analysts who cover Heinz were contacted by CNBC, and dismissed the idea. Even more importantly, consumers could be turned off by such corporate hardball, especially if executed by a venerable and normally squeaky-clean consumer icon like Heinz.
Yet at least in theory, a ketchup supply disruption could send the Golden Arches scrambling to fill a void left by a key condiment supplier.
Pittsburgh-based Heinz commands a 60 percent market share in the U.S., withConAgra's Hunt's ketchup its nearest competitors with less than 20 percent of the market. Heinz share of markets abroad is even larger.
In other words, Heinz rules the global ketchup market in ways few other companies can. At a minimum, the deal shines a light on an area of food services that gets little attention: the supply of condiments and little items that add the finishing touches to the fast food experience.
Still, using Heinz to squeeze McDonald's "would be a little tough to pull off. My feeling is you've got to be careful about stuff like that," said Jack Trout, a marketing strategist at Trout & Partners.
The brand consultant pointed out that customers go to fast-food establishments for their sandwiches and not their sauces. In addition, the fallout may not be worth the arguably tantalizing prospect of watching two corporate giants slug it out in a cold war, using ketchup as a weapon.
"I don't think they want to get into, and secondly why," Trout said. "When people are showing up for a Big Mac or a Whopper, the subject of what ketchup is out there is not important."
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