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  The Squeeze on Ketchup   The Squeeze on Ketchup  Jennifer Gidman  
The Squeeze on Ketchup Founded in 1869 by Henry John Heinz, the Heinz brand rules the ketchup market (registered sales reached US$ 267.1 million in 2005) and has achieved a 60 percent share of the category. ConAgra, maker of second-place Hunt’s ketchup, trailed behind with a 16 percent share during the same period, while Del Monte barely made a blip with 5.3 percent—falling even behind private-label brands which had a 17 percent share.

The Heinz name has achieved iconic status and become one of those rare brands that single-handedly drive a category. A study done on the brand in 2005 by The New England Consulting Group estimated the lifetime brand value for Heinz at more than US$ 20 billion. Heinz ranked first in a 2008 overall brand equity study from EquiTrend, which evaluated more than 1,000 brands across 39 categories.

"I do think Heinz does have a quality product,” says Andrew F. Smith, author of Pure Ketchup: A History of America's National Condiment. “It's very sticky; I don't like ketchup that drips off a French fry. Their ketchup is slow, which is what their commercials promoted in the 1960s and 1970s. It has a high viscosity, so it sticks to whatever you put it on—if you bite into a hamburger or hot dog, it doesn’t squish out the other end. People see that quality and have brand loyalty. It's a great story not many commercial products have.”

Most consumers rely on trusty Heinz 57 to perk up their hamburger patties, but who is buying the number-two and number-three brands? And why? “It’s mainly price,” says Smith. “The Hunt's and Del Monte varieties have a lower price point than Heinz." The Packaged Facts report backs up his assertion: people with household incomes greater than US$ 100,000 are more likely to use Heinz, while Hunt's is the most often-used ketchup brand in households with incomes less than US$ 20,000.

Viscous Visibility
So, with such one-sided dominance in the category, what type of marketing is necessary for the top brand, as well as for its distant competitors?

"When you're controlling 60 percent of the market, why innovate?" laughs Smith. “Heinz controls the commercial ketchup market in ways that no one else can compete with. Once you get to that point, it doesn't matter if Del Monte and Hunt's advertise their ketchups—Heinz sales actually go up when they do that!"

Most of the marketing and advertising initiatives that have cropped up in recent years have revolved around packaging innovations. In 2002, Heinz and ConAgra both launched their inverted squeeze ketchup bottles—the Heinz Easy Squeeze and Hunt's Perfect Squeeze—in the same week.

Heinz continued pioneering in packaging with its Top-Down and Fridge Door Fit bottles. They reached out to younger consumers as well, with Silly Squirts bottles, designed with different nozzles to let little hands create their own dinnertime concoctions. The company also launched a “Create-A-Label” campaign where consumers could visit to create customized messages, as well as the "Top This” TV challenge that allowed users to compete to create the next Heinz TV commercial.

Hunt’s has tried to keep up in the bottle wars by jumping on the green bandwagon: its 46-ounce bottle recently won an Institute of Packaging Professionals’ sustainable packaging award for its DiamondClear PET construction, which Hunt’s claims makes the bottle 12 percent lighter and more environmentally friendly than Heinz bottles of the same size.

Other recent ConAgra promotions designed to gain visibility for the brand have included its role as an exclusive food sponsor for Six Flags, Inc., which put Hunt’s ketchup front and center on every theme-park fast-food platter to enhance brand loyalty and reach out to consumers beyond traditional media. The Hunt’s brand also took the unusual step of offering "taste guarantee certificates" to consumers: anyone not satisfied with the brand’s new, thicker ketchup can opt for a full cash refund or swap the certificates for a US$ 20 discount on other ConAgra product purchases.

Sticky Situations
Ketchup’s reputation as the untouchable topper, however, has not gone unchallenged. There was the "salsa scare,"which, depending on which report you’re reading, has seen salsa and ketchup alternate as the number-one condiment in the US.

The nature of the product itself has seen little change over the years, and ketchup continues to tickle the palate by appealing to all five of the basic taste receptors on the tongue: salty, sweet, sour, bitter and umami—a savory sensation triggered by glutamic amino acid.

With the exception of Heinz’s ill-fated colored ketchups that didn’t quite catch on with the kid demographic, as well as a Hot & Spicy Heinz ketchup that hasn’t given the brand the extra kick that was expected, the only other recent brand extensions within this category—Heinz’s organic ketchup and Hunt’s no-salt added—are focusing on health benefits.

Ketchup contains lycopene, a nutrient that has been linked to staving off some cancers and other diseases, and the recent brand extensions seem to be an attempt to appeal to an increasingly health-conscious public. Sixty-six percent of consumers say that they eat organic foods at least occasionally, according to the Organic Trade Association (OTA).

Smith isn't buying the organic angle, however. "It won't catch on,” he asserts. “Heinz was worried with salsa, so they made a salsa ketchup [in 1993 that was eventually discontinued].”

Expanding Markets
Despite failed brand extensions and competition from more culturally influenced condiments, Smith doesn’t see a decline in the ketchup category coming anytime soon—and he looks to local food markets as proof.

“There are a huge number of designer ketchups,” he says. “If I go into a gourmet food store here in New York, I’ll find ten or 15 different types of ketchup. It’s not just the basic three. Restaurants are also serving fresh ketchup that they’re making themselves. I think that shows the vibrancy of the category—it’s an exciting field that hasn’t grown stagnant.”

Furthermore, there is an international market for the condiment. In other countries, as Smith documents in his book, ketchup is used on anything from pasta (Holland and Venezuela) to cabbage rolls (Japan) and meatballs and fishballs (Sweden). “The formulas could also be different, depending on location,” he says. “They change based on local needs." Kraft Foods, for example, produces curry- and paprika-flavored ketchups in Europe, says Smith.

With that level of international appeal, ketchup is poised to become a respected ingredient instead of a panacea for bland dishes. And, as with salt and mustard, ketchup is gaining notoriety in the gourmet market, which may have Heinz seeing red.     



Jennifer Gidman lives and works in New York.

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The Squeeze on Ketchup
 market leader(s), no matter how large and dominant they are, should they choose to cut and slow innovation, that is when their foothold will start shaking.
I got to say, life is tough, you need not only grow up but to keep on growing or the other kids on the block will start bigger and bigger.

innovation= business continuity. 
Raziel, full time brand junkie/part time corporate sales - November 15, 2008
 A few years ago I saw a TV documentary about the history of the Heinz company. After learning about their devotion to sanitation and their progressive policies for their workers, I have been a loyal Heinz consumer. 
Tom Brown, retired journalist - November 17, 2008
 Raziel makes a good point regarding innovation = business continuity.
Let’s look at one startling point that was stated in the article: “people with household incomes greater than US$ 100,000 are more likely to use Heinz, while Hunt's is the most often-used ketchup brand in households with incomes less than US$ 20,000.” Can Heinz take advantage of this data, and generate an offering that has some appeal to the under $20k household (other than price point)? What is resonating with this group? Are there emotional considerations when ketchup is purchased? By sitting back and not innovating, Heinz may be missing an opportunity here to increase their stronghold on the category. 
Dave, Marketing Communications, Michelin - November 17, 2008
 I am a Heinz devotee but was sad to hear nothing about whether they are using recycled materials for their bottles while Hunt's is doing so. Come on Heinz. Make me proud. 
- November 17, 2008
 When you're this big you can leak from above and below. Above is the gourmet market. People looking for the "fleur de sel" of red condiments are unlikely to go to any exotic new product with the Heinz name on it - they'll want something from someone different. And below: when I worked in restaurants I remember seeing staff refill Heinz bottles from industrial cans of generic ketchup. This eventually cuts the 'sticky' product quality out from under the name and the brand becomes more like a label. These, of course, are not the worst kind of problems to have when you own the big 60 in the middle. 
Paul Belserene, Senior Strategic Storyteller, Envisioning and Storytelling - November 17, 2008
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