Heinz deal is a triumph for marketing
Heinz’s £18bn sale to one of the most astute investors in the world is testament to the power of brand building.
The biggest deal in a year of big deals is not the acquisition of a nimble digital company on the up but a 144-year-old house of brands that have been deliberately built and nurtured across the world.
It is unusual to read a statement aimed squarely at investors and the financial press littered with references to brands. Yesterday’s announcement of Berkshire Hathaway and private equity firm 3G Capital’s deal to buy Heinz was peppered with references to the power of marketing.
Warren Buffett, one of the world’s richest men and known as the “Sage of Omaha” for his business acumen, talked of Heinz’s growth potential and success to date being based on “investing behind strong brand equities”.
Elsewhere, Alex Behring, managing partner of 3G Capital talked about the “great respect” it has for Heinz’s brands and the intention to expand the “value of the storied brand”. Private equity firms, it is fair to say, are not known for the unequivocal support of marketing.
The duo know the resonance of the brand in developed markets - it has the highest Buzz ranking in its category in the UK, according to YouGov’s Brand Index – and will be hoping that love will help it grow the business globally. In particular in emerging markets where revenue increased 13 per cent in the fourth quarter.
Buffett and Behring’s comments should be edifying to marketers. The power of brand building is not a subject usually discussed openly with such passion by cold hard business operators. Marketing as a revenue generator is a reality but not one that often raises the pulses of investors.