The story begins when Berkshire Hathaway and 3G Capital bought Heinz and merged it with Kraft to estab- lish Heinz Kraft foods. Berkshire led by Warren Buffett, and 3G by Jorge Paulo Lemann, promised investors efficiencies would be realized through consolidating operations. In Canada, Leamington was the face of Heinz ketchup having produced the product for well over 100 years. The region has perfect growing conditions for tomatoes. It is the biggest processing region per acre in the world. Yet the community was anxious. The dreaded announcement came in June 2014. Heinz was relocating the ketchup line to Iowa. The Leamington plant would no longer produce nearly 200 bottles of ketchup per minute for Canadian store shelves. Over forty local farms committed their crops to Heinz and were left without buyers. TheHeinz plant directly employed in excess of 725 people with an additional 250 spinoff jobs for the community. Local inves- tors did what they could and were successful in retaining pro- duction of Heinz Tomato Juice. Canada prohibits the importa- tion of tomato paste tomanufacture foods so the juice line had to stay. The plant remained open, but was on life support. In what many in the area label a miracle, French’s revealed plans to grow their ketchup operations and signed a deal to operate in Leamington. The short term plan was to produce paste from local tomatoes for processing at facilities in Toronto and Ohio. The second phase is an eventual move of all processing to Leamington. In February, Brian Fernandez, a blue collar construction worker from Orillia Ontario, was shopping for groceries when he noticed a few bottles of French’s ketchup on a bottom shelf, squeezed beneath four rows of Heinz. Not aware that French’s made ketchup, he thought how he and his family love French’s mustard and thought he might give it a try. In doing so Brian, thought he’d do some Internet research before picking which one to buy. So this is where the butterfly flaps its wings.
When doing his research the first item that came up on Brian’s search was an article that he did not expected to see: Heinz pulling out of Leamington; 740 jobs gone; plant to close. “I didn’t even know there was a town called Leamington,” he said. He was shocked such a big company could stop using Canadian ingredients and he hadn’t heard about it. So the next day, Brian went back to the grocery store and picked up French’s so his family had to do a blind taste test to be sure they liked French’s Canadian ketchup. The first round was tastes tests were done but dipper their find into the ketchup. However, the second round tasted the ketchup on a French fry, which we all know is the true test of ketchup. Fernandez posted his support for the French’s ketchup on online telling his 400 online friends that his family was changing to French’s ketchup and explained why. That solitary act ignited a chain reaction on social media that now has close to 140,000 shares. Stores were selling out of French’s ketchup and consumers wanted more. Then the unbelievable transpired. Grocery giant Loblaws stated they would no longer stock French’s ketchup. They claimed “decreased demand” triggered the move. However, a leaked memo suggested the real reason was that French’s ketchup cannibalized their President’s Choice brand. Loblaws says the release was unofficial and not true. Nevertheless, social media exploded. A few days afterward Loblaws repealed their decision and vowed to restock the ketchup. Even the Premier of Ontario, Kathleen Wynne, threatened to launch a boycott aimed at Loblaws unless they changed their policy. French’s are thunderstruck. They maintain that a single voice started a movement that has them striving to keep shelves stocked with French’s ketchup. They are nego- tiating with manufacturers to relocate production from Ohio to Ontario with the added bonus of introducing new items that will be processed at that facility. French’s say the biggest thing they have learned is con- sumers want local ingredients and will support compa- nies that support them. Fernandez said he never planned for the post to go viral. The 49-year-old construction worker felt sympathy for those affected by the Heinz closure and wanted share his appreciation of French’s decision to step in. The butterfly created a hurricane.
“We bought a bottle. Absolutely love it!!”
We are sure that Brian Fernandez and his family will never have to worry about ketchup again.
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DECEMBER 2016 • SPOTLIGHT ON BUSINESS
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