Heinz Ketchup Loses McDonalds

Associated Press

Ketchup was designed by a higher power specifically for fries to be dipped in, as we all know. And on that front, here’s some bad news for the world’s best known purveyor of the red stuff, the Pittsburgh Post-Gazette reports:

McDonald'sMCD +0.11% is moving to clear Heinz ketchup out of its system.
The restaurateur this week confirmed that it has started the process of moving to other vendors, following the appointment of former Burger KingBKW +0.05% Worldwide CEO Bernardo Hees to run Pittsburgh-based H.J. Heinz Co. Mr. Hees also serves as vice chairman of the board of Miami-based Burger King.
“As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time,” according to a statement from Oak Brook, Ill.-based McDonald’s.

In June, Berkshire HathawayBRKB +0.16% and Brazil’s 3G Capital completed their takeover of Heinz, installing former Burger King Chief Executive Bernardo Hees as CEO of the ketchup maker. The Brazilian private equity company bought Burger King for $4.1 billion in October 2010, and took a portion of the company public in 2012. It’s easy to imagine McDonald’s isn’t keen to have a supplier with such a close connection to its main competitor.
We reached out to McDonald’s and Heinz for comment; A Heinz spokesman said the company doesn’t discuss its relationships with customers, and McDonald’s didn’t get back to us. But losing McDonald’s is unlikely to have stung Heinz too badly, with only a small fraction of the burger chain’s U.S. restaurants getting their ketchup from Heinz to begin with.
Outside the U.S., Heinz was doing more business with McDonald’s, whose spokesperson told the Post-Gazette that the change was “a global transition.”
As the WSJ reported back in 2006, Heinz has spent years trying to win back the business of McDonald’s, which it first lost after being unable to supply the chain with all the ketchup it needed amidst a tomato shortage in the early 1970s. The mission to get McDonald’s back on board was a difficult one — “a marathon, not a sprint,” a Heinz executive told the WSJ at the time. Sometimes, marathons don’t end the way you hoped they would.