Warren Buffett just put a lotta ketchup in his cupboard

Consider ketchup. Tomatoes, vinegar, sugar and a little salt. There’s not much more to it than that. And yet it is on top of that humble ketchup bottle that the H.J. Heinz company built a $28 billion empire.

Today, Warren Buffett’s Berkshire Hathaway announced that it will partner with investment firm 3G Capital to buy Heinz for$23 billion in cash. But with debt assuption, the whole deal is valued at around $28 billion. 

The Pittsbugh-Based Heinz owns all sorts of products like Classico Spaghetti Sauces and Ore-Ida fries, but it is the company’s ketchup that is so iconic. “If you think about it this is a brand — like Fedex or Coke or Starbucks more recently — that has become the placeholder for the category,” says Harvard business historian Nancy Koehn. “If we ask for ketchup and we don’t get Heinz — wherever we are — there is a little bit of a reboot … it looks wrong.” 

Koehn says Heinz has always been innovative in terms of production, marketing and distribution, and was even in front of the pact when it came to safety and regulatory standards. Also, says Koehn, ” A lot of the foods that grew up with ketchup — including fast food in the 1950s — grew up literally in tandem with alliances and suply relationships with Heinz.”