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Heinz Gets Sophisticated, and Social

Posted by Barry Silverstein on October 26, 2011 04:01 PM

Ketchup. This ever-present condiment is found in 97 percent of American households, according to market research firm Mintel. Heinz has snared 59 percent of the ketchup market, estimates Symphony IRI Group (whose figures do not include Walmart). Hunt is a distant second among brand names, with about 15 percent market share, while store brands make up close to 22 percent.

That's why one might consider Heinz the Coca-Cola of ketchup — and why Heinz is consciously cautious about brand extensions, especially those that tamper with its original formula. Clearly, the company does not want to repeat the colossal branding mistake made by Coca-Cola in the 1980s when it introduced newly flavored "New Coke" and, after consumer outrage, was forced to bring back the "old" Coke.

Founded in 1869, Heinz Ketchup remains true to its roots, with its original flavor still dominant. In recent years, the company has conservatively expanded its line to include No Salt Added, Organic, and "Simply Heinz" (no high fructose corn syrup) versions. Heinz has also added one flavor enhancement — a "Hot & Spicy" variety that includes a touch of Tabasco sauce.

Yet Heinz has stayed away from any dramatic departure from its landmark flavor, toying instead with packaging, such as wide-mouth bottles, plastic bottles and its newest "Dip & Squeeze" container, with three times as much ketchup as regular packets. Previously restricted to restaurants, Dip & Squeeze now sells in 10-packs at stores.

Still, as tastes change, Heinz recognizes the need to keep up with the times — and elevate ketchup on the sophistication scale as well. So on November 14, Heinz will introduce "Heinz Tomato Ketchup Blended with Balsamic Vinegar." But just to keep a lid on it, so to speak, the new product will not be advertised. Instead, it will be unveiled in the US the brand's Facebook page, which currently has over 825,000 followers.

Everything about the new flavor, which replaces the white vinegar used in the original formulation with balsamic, is upscale. The product will be sold only in black-labeled glass bottles marked "limited edition." It will be priced at $2.49 per 14-ounce bottle, vs. $1.89 per plastic bottle of the original. And a consumer ordering a bottle through Facebook will have to tack on a $2 shipping charge — or they can wait until late December, when the balsamic ketchup will begin to hit US stores.

The New York Times reports that the Facebook campaign for the new ketchup flavor will include photographs of such foods as "Hamburgeur," "Haute Dog," and "French Frites" as Facebook visitors will be given the opportunity to "experience the richer, more sophisticated side of America's Favorite Ketchup."

Noel Geoffroy, VP for U.S. retail brands at H. J. Heinz, told the Times, "We're starting on Facebook first for our most avid fans. ... We think households who already use Heinz ketchup will use this in addition." The Facebook launch will be followed by limited product availability in supermarkets through the first quarter of 2012. If sales look promising, the balsamic product will become a permanent addition to the line.

It's actually a shrewd strategy — one that proved a hit earlier this year in the UK, where it's now available in grocery stores — to launch the brand extension on Facebook with the hope that Heinz ketchup-lovers will tell their friends about it and generate word of mouth buzz. Calling the product a "limited edition" both increases its cachet (enabling a higher price) and could also limit the risk of damaging the core brand if the reception to the balsamic version is lukewarm.

Looks like Heinz has figured out how to maintain the integrity of its core brand while testing a new taste.

Comments

Lorne McMillan United States says:

Now this is good on two counts: good product extension idea that adds some zip to the brand and great use of social media.  It would have been so easy to mess something like this up with something as venerable as this product, to do a 'new Coke' as it were.  In these fast times we can sometimes forget that core/pillar products like this need careful handling just as much as new products.

October 27, 2011 08:43 PM #

Tanny Gautama Indonesia says:

Clever way of introducing an extension you're not sure if people would respond well to! Good strategic thinking. Bravo!

October 31, 2011 12:22 AM #

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