> ## Content Index > Fetch the complete content index at: https://www.thecloser.fm/llms.txt > Use this file to discover other available public pages before exploring further. # Episode 5: Ketchup Wars: 3G’s Takeover of Kraft and Heinz - URL: https://www.thecloser.fm/episode-5-ketchup-wars-3gs-takeover-of-kraft-and-heinz/ - Published: 2023-03-06T10:35:26.000Z - Updated: 2026-10-12T13:44:03.000Z - Description: When Brazilian private investment firm 3G took over Kraft and Heinz, they thought they had a perfect plan. The Closer digs into where it went wrong and who got hurt. It's the story of Ketchup, the evolution of capitalism and the limits of any single successful business strategy. - Author: Bradley Hope - Tags: Podcast, #ben, #aimee Ketchup and capitalism are arguably the United States’s most influential exports. That's what [Episode 5](https://apple.co/3ZmOVf2?ref=thecloser.fm) of *The Closer* – Ketchup Wars: 3G’s Takeover of Kraft and Heinz – is all about. It’s out now wherever you listen to podcasts! The fascinating thing about the Brazilian investment firm 3G is that they had what seemed for years like the perfect strategy. They’d acquire a company, and boost margins by cutting costs with a very unique tactic called zero-based budgeting. [View transcript](https://www.thecloser.fm/episode-5-transcript/) [![Apple Podcasts](https://www.thecloser.fm/assets/img/apple-purple.png)](https://apple.co/3ZmOVf2?ref=thecloser.fm) [![Spotify](https://www.thecloser.fm/assets/img/spotify.png)](https://open.spotify.com/show/7jQPWgY7Yk6J13dN3day4H?ref=thecloser.fm) [![Amazon Music](https://www.thecloser.fm/assets/img/amazonmusic.png)](https://music.amazon.com/podcasts/241fe45d-78c5-492d-9d3d-b82481c175e4/the-closer?ref=thecloser.fm) Zero-based budgeting is great business school jargon because it sounds like it could put you to sleep and is, once fully explained and understood, pretty insane. Here’s the deal: zero-based budgeting means that for each unit of a company, the baseline for their budget for the next planning period (the coming year, or quarter, or whatever) is not the previous budget, but zero. So managers have scramble to justify the existence of their entire team. Nothing is sacred; nothing is certain; tradition must be torn down; everything is new; anything is possible. It’s like if Robespierre went to Wharton. And it was wildly successful. 3G seemed to have found the answer. And then it... just stopped working. It turns out, things like marketing and product development look like costs that can be easily slashed, up until consumer tastes change. And tactics that once upended the usual way of doing things have a tendency to become your competitors’ standard operating procedure. And in my favorite moment of [this episode](https://apple.co/3ZmOVf2?ref=thecloser.fm), Jorge Paulo Lemann seems to grasp this sort of existential conundrum that leads success to collapse onto itself. **If you subscribe to the** [**Brazen+ channel**](http://apple.co/brazen?ref=the-closer) **subscription on Apple Podcasts, you'll get ad-free listening and access to exclusive bonus episodes.** As always, there was too much to include in a single episode, here here's a bit of the reporting that helped us tell this story. [BE A CLOSER - SIGN UP HERE](https://www.thecloser.fm/#/portal/signup/free) – The FT profiles [Jorge Paulo Lemann, 3G’s founder](https://www.ft.com/content/ad85be00-d2ff-11e4-b7a8-00144feab7de?ref=thecloser.fm). – The Wall Street Journal takes a close look at how [3G’s cost-slashing strategy backfired](https://www.wsj.com/articles/it-shook-the-food-business-by-snagging-burger-king-kraft-and-heinz-now-3g-is-reeling-11550875206?ref=thecloser.fm): competitors adopted it and consumer tastes – which had been modeled as effectively constant – shifted. – How 3G’s ownership of Kraft Heinz pushed Big Food to take a different course ([the WSJ](https://www.wsj.com/articles/the-failure-of-kraft-heinz-11550803181?mod=article%5Finline&ref=thecloser.fm)) – The FT dissects [the $143bn flop and tells the story of how Warren Buffett and 3G failed to takeover Unilever](https://www.ft.com/content/d846766e-f81b-11e6-bd4e-68d53499ed71?ref=thecloser.fm). It all begins, I kid you not, with a conversation about margarine spread. – “\[Zero-based Budgeting\] is not simply a cost-cutting measure. It’s a daily mindset that is resistant to complacency”: 3G’s Alex Behring, the chairman of Kraft Heinz, sits down for an interview with [the Financial Times](https://www.ft.com/content/268f73e6-31a3-11e7-9555-23ef563ecf9a?ref=thecloser.fm). (And here’s [the complete transcript](https://www.ft.com/content/850c39a2-330d-11e7-bce4-9023f8c0fd2e?ref=thecloser.fm)) – Warren Buffett announces he’s stepping down from the Kraft Heinz board[ in 2018](https://www.ft.com/content/3910bc22-43dc-11e8-803a-295c97e6fd0b?ref=thecloser.fm) in the wake of the company’s failed $143 billion takeover attempt of Unilever. – And the following year, after taking a $3 billion charge on Berkshire Hathaway’s investment in Kraft Heinz, Buffett admits “[we overpaid](https://www.ft.com/content/c6d7dd12-38f8-11e9-b72b-2c7f526ca5d0?ref=thecloser.fm).” – The history of ketchup as the quintessential American food, and [its deeply international origin story](https://qz.com/quartzy/1335299/ketchup-may-be-quintessentially-american-but-its-roots-are-anything-but?ref=thecloser.fm), from Quartz. ![The Closer podcast logo, from Project Brazen and PRX](https://storage.ghost.io/c/3a/b2/3ab24ac3-6659-4e40-b780-779a1acb1fb4/content/images/2023/02/221201_TheCloserPodcastCovers_J-03.png) Subscribe now on [Apple Podcasts](https://apple.co/3ZmOVf2?ref=thecloser.fm) or wherever you listen. [![Apple Podcasts](https://www.thecloser.fm/assets/img/apple-purple.png)](https://apple.co/3ZmOVf2?ref=thecloser.fm) [![Spotify](https://www.thecloser.fm/assets/img/spotify.png)](https://open.spotify.com/show/7jQPWgY7Yk6J13dN3day4H?ref=thecloser.fm) [![Amazon Music](https://www.thecloser.fm/assets/img/amazonmusic.png)](https://music.amazon.com/podcasts/241fe45d-78c5-492d-9d3d-b82481c175e4/the-closer?ref=thecloser.fm)