H.J. Heinz Co. says it’s the largest deal ever in the food industry. The company, based in Pittsburgh, also makes Classico spaghetti sauces, Ore-Ida potatoes and Smart Ones frozen meals.
Buffett’s Berkshire Hathaway and its partner on the deal – 3G Capital, the investment firm that bought Burger King in 2010 – say Heinz will remain headquartered in Pittsburgh. Heinz CEO William Johnson said in a statement that the company “will have an opportunity to drive further growth” as a private enterprise.
“It’s our kind of company,” Buffett said in an interview on CNBC, noting its signature ketchup has been around for more than a century. “I’ve sampled it many times.”
The company was founded by Henry John Heinz and his neighbor L. Clarence Noble in 1869. Their first product was grated horseradish, bottled in a clear glass to showcase its purity. The first ketchup was introduced in 1876; the company says it was the country’s first commercial-grade ketchup.
Last year, Heinz says it had sales of $11.6 billion, with ketchup and sauces accounting for just under half of that. Given the saturated North American market, the company has increasingly looked overseas for growth. In 2010, for example, the company bought Foodstar, which makes Master brand soy sauce and fermented bean curd in China. Heinz expects emerging markets to account for a quarter of the company’s sales.
Representatives for Heinz and the investment group weren’t able to immediately provide any further details on the deal, including whether there would be any management changes or layoffs.
Heinz has the type of brand equity that takes years to create and it has been able to raise prices even in the highly competitive grocery business, said Brian Sozzi, chief equities analyst for NBG Productions.
— This article appeared on page B1 of the Albuquerque Journal