Historic animosity should stay out of boardrooms
The most trivial-sounding stories sometimes hide a great truth. I’m thinking of this week’s revelation that McDonald’s is to stop serving Heinz ketchup after more than 40 years of brand partnership.
What on earth would make the world’s biggest restaurant chain by sales decide to end ties with the world’s most popular and well-recognised ketchup brand? McDonald’s says this is “the result of recent management changes at Heinz” after Bernardo Hees, the former boss of Burger King, took over as chief executive of the ketchup business.
So let’s make no mistake. This is not really a story about something like dull old management issues. This is a story about how even at the top of multimillion dollar businesses, personal relationships and allegiances still define brands and their actions. This is the enduring truth behind this funny little story about red sauce and burgers.
Brazilian Bernardo Hees has been in charge of Heinz since the summer, when the company was bought by Warren Buffett’s Berkshire Hathaway and Brazilian investment fund 3G Capital. Burger King is also controlled by 3G Capital. It would seem fair to say that the Burger King link is fairly relevant here.
Of course, none of us know what has gone on at the McDonald’s/Heinz meetings that have seen a brand relationship spanning more decades than most partnerships come to an end. Heinz isn’t telling. And McDonald’s will only refer back to the “management changes” and point out that it has been migrating to other suppliers for some time.
But the appearance of Hees at Heinz is key to the complete split with McDonald’s. The founder of McDonald’s, Ray Kroc, once said of his competitors “If they were drowning to death, I’d put the hose in their mouth”. That’s a pretty personal sort of statement. While Kroc may be long gone, McDonald’s still seems to see its age-old rivalries as matters of life and death.
Hees is also known for occasionally raising hackles. Back in 2011, he was forced to make a public apology after an ill-conceived joke when he was still boss at Burger King about British food being “terrible” and that the “women are not very attractive”. Thanks Bernardo.
Ultimately, personal relationships and histories can be both positive and negative for brands. When brands are built on the absolute passion of their employees and executives, they make other people care about them too. Brand partnerships built on shared values, shared passion and friendships can withstand tough times.
But if age-old rivalries mean that businesses miss opportunities because of any historic animosity, this is when brands should look very carefully at whether their passion has spilled over into negative territory. This may not be the case for McDonald’s and Heinz, but sometimes it is clear that brands can get too personal.