Buffett made a splash, but the biggest Heinz story is yet to come

Reading the beans.

Warren Buffet’s Berkshire Hathaway and Brazilian billionaire Jorge Paulo Lemann have teamed up to buy Heinz for $28 m — making this the fourth largest food and beverage acquisition of all time.

As if this wasn’t enough to excite the M&A markets, Buffet has been dropping not-so-subtle hints that he’s planning some more big moves, telling CNBC that he was “ready for another elephant.” Shares of other food companies rose yesterday in anticipation of more merger activity.

Buffet, the so-called “sage of Omaha”, isn’t known for making bad calls and Heinz has had a good few years, largely on the back of rising sales in Asia, which increased by 15.6 per cent last year.

That said, there’s something peculiar and anachronistic about the enduring success of Heinz’s most famous products. I should mention that beans on toast is my comfort dinner of choice — and yet I find it bizarre that processed beans in gloopy, sugary sauce didn’t follow spam off our shelves to be replaced by new and funky exotic produce like pasta, hummous and avocados.

Not only have baked beans survived the UK’s culinary dark ages to the modern day, but unlike fish fingers and dreaded turkey twizzlers, they aren’t only fed to children too young to know better. According to the Heinz website, 1.5 million cans of Heinz baked beans are sold in the UK every day.

H J Heinz, who founded the company in 1869, bankrupted himself trying to sell horseradish to the American public before he stumbled upon his winning ketchup recipe. Heinz ketchup too has proved remarkably enduring, although our attitude towards it has changed — it was first designed to disguise the taste of rotting food, now it’s simply seen as the natural accompaniment to horse, I mean, beef burgers.

According to Forbes, Heinz’s CEO William Johnson smothers his broccoli in ketchup, which can only illustrate a scary level of commitment to the brand.

The first UK supplier of ketchup was Fortnum and Mason. Today if you were silly enough to head to the Knightsbridge store for ketchup, you’d probably have to make do with some kind of hand-squeezed Sicilian organic sun-blushed plum tomato relish priced its weight in gold. At the same time, the growing trend for posh burgers and a confused nostalgia for American-style diners (think of hip London joints like Dirty Burger, Burger & Lobster, Meat Liquor etc) means that Heinz is enjoying something of a revival among foodies too.

Not all of this is down to chance. Like Coco-Cola (also owned by Buffet) the recipe for ketchup varies according to each country’s palate — in the Philippines it contains banana. The company’s plans to expand in Asia and South America — its aiming to double sales to emerging markets in five years — was preceded by strategic acquisitions such as Food Star, a Chinese soy sauce manufacturer in 2010, and Brazilian tomato sauce maker Quero.

It will be interesting to see how the impressively adaptable brand weathers the transition back to private company and its global expansion — will Johnson be kept on as CEO? How hard will Buffet and Lemann seek to squeeze Heinz to cut costs? (Lemann has form here) How much will Heinz be affected by rising commodity prices? Will an ever-more global Heinz outgrow its Pittsburgh roots? And — most important for us here in the UK — are the 2,700 jobs at Heinz’s Wigan branch safe? Buffet’s takeover has made a big splash, but one senses there are bigger Heinz stories to come.

Sophie McBain writes for Spear's magazine.

Photograph: Getty Images

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

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Donald Trump vs Barack Obama: How the inauguration speeches compared

We compared the two presidents on trade, foreign affairs and climate change – so you (really, really) don't have to.

After watching Donald Trump's inaugural address, what better way to get rid of the last few dregs of hope than by comparing what he said with Barack Obama's address from 2009? 

Both thanked the previous President, with Trump calling the Obamas "magnificent", and pledged to reform Washington, but the comparison ended there. 

Here is what each of them said: 

On American jobs

Obama:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.  We'll restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost.  We will harness the sun and the winds and the soil to fuel our cars and run our factories.  And we will transform our schools and colleges and universities to meet the demands of a new age.

Trump:

For many decades we've enriched foreign industry at the expense of American industry, subsidized the armies of other countries while allowing for the very sad depletion of our military.

One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind.

Obama had a plan for growth. Trump just blames the rest of the world...

On global warming

Obama:

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.

Trump:

On the Middle East:

Obama:

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy. 

Trump:

We will re-enforce old alliances and form new ones and unite the civilized world against radical Islamic terrorism, which we will eradicate completely from the face of the earth.

On “greatness”

Obama:

In reaffirming the greatness of our nation we understand that greatness is never a given. It must be earned.

Trump:

America will start winning again, winning like never before.

 

On trade

Obama:

This is the journey we continue today.  We remain the most prosperous, powerful nation on Earth.  Our workers are no less productive than when this crisis began.  Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year.  Our capacity remains undiminished.  

Trump:

We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs.

Protection will lead to great prosperity and strength. I will fight for you with every breath in my body, and I will never ever let you down.

Stephanie Boland is digital assistant at the New Statesman. She tweets at @stephanieboland