INSIGHT-New breed of food execs raised on mergers, not marketing

Thu May 21, 2015 6:56am EDT
 
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* Private equity mentality spreads in consumer sector

* Highlights importance of financial prowess

* JAB, Nomad Foods have links to 3G-controlled AB InBev

By Martinne Geller

LONDON, May 21 (Reuters) - The consumer goods world has long been dominated by marketing whiz kids raised through the ranks of Procter & Gamble or PepsiCo, but the executives now in demand come from a new school that values cost-cutting and mergers over marketing.

The new playbook, embodied by U.S. private equity firm 3G Capital, applies cutthroat Wall Street sensibilities to Main Street shopping aisles, demanding the highest performance from fewer people willing to work extra hard and progress quickly.

The spread of a private equity mentality to more of the largest names in the sector exacerbates the pressure on finance chiefs, already wading through increased volatility of commodities and currencies, and highlights the need for financial prowess outside the finance department.

The 3G management philosophy was developed by three Brazilian investment bankers and pioneered at Budweiser brewer Anheuser Busch InBev, the world's biggest brewer, which they helped create through a series of big mergers. It is now also in effect at Burger King owner Restaurant Brands International where they are major shareholders, and ketchup maker Heinz which they have bought. Soon it will arrive at Kraft Foods, which is being bought by Heinz.

The Brazilians have demonstrated that the private equity model can be implemented on a large scale, potentially creating big winners and losers in a low-growth sector.   Continued...