April 9, 2021
After enduring a year of closures, employee safety fears, and start-stop openings; now, many American restaurants are now facing a nationwide supply chain shortage of one of their customers’ favorite condiments: ketchup.
More specifically, according to a report by The Wall Street Journal, ketchup packets are being grabbed up by the handful—as toilet paper was earlier in the year—depleting restaurant supplies.
To meet the demand, managers are using generic versions, pouring out bulk ketchup into individual cups, and hitting the aisles of Costco for substitutes.
“We’ve been hunting high and low,” Chris Fuselier, owner of the Denver-based Blake Street Tavern told the Journal, saying he has struggled to keep ketchup in stock for much of this year.
The pandemic turned many sit-down restaurants into takeout specialists, making individual ketchup packets the primary condiment currency for both national chains and mom-and-pop restaurants. Packet prices are up 13% since January 2020, and their market share has exploded at the expense of tabletop bottles, according to restaurant-business platform Plate IQ.
Even fast-food giants are pleading for packets. Long John Silver’s—a nearly 700-unit chain—had to seek ketchup from secondary suppliers because of the rush in demand. The industry’s pandemic shift to packets has pushed up prices, costing the Louisville, Kentucky-based company an extra half-million dollars, executives said, since single-serve is pricier than bulk.
“Everyone out there is grabbing for ketchup,” Chief Marketing Officer Stephanie Mattingly told the business news outlet.
The ketchup conundrum strikes at a cornerstone of American diets. The tomato spread is the most-consumed table sauce at U.S. restaurants, with around 300,000 tons sold to food-service last year, according to research firm Euromonitor. Even more is eaten at home, and the pandemic helped push retail ketchup sales in the U.S. over $1 billion in 2020, around 15% higher than 2019, Euromonitor data showed.
Kraft Heinz Co. is ketchup’s king, with the research firm saying Heinz holds nearly 70% of the U.S. retail market for the condiment. But the more than 150-year-old brand wasn’t prepared for the pandemic.
Kraft Heinz couldn’t keep up with orders for its sachets––the industry term for ketchup packets.
Steve Cornell, Kraft Heinz’s president of Enhancers, Specialty and Away from Home Business Unit, said restaurants need patience while it ramps up supply. The company plans to open two new manufacturing lines in April, and more after that— increasing production by about 25% for a total of more than 12 billion packets a year. Kraft Heinz already is running extra shifts at plants, and cut back on some varieties to focus on making more single-serve packets.
The company also invented a no-touch ketchup dispenser to help meet demand for COVID-safe alternatives to shared bottles.
“We’re busy doing everything we can,” Cornell said.
Research contact: @WSJ