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Tomato Ketchup Spring 2014. Christopher Wahrman Dr. Stassen MKTG 4443. About the Category.
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Tomato Ketchup Spring 2014 Christopher Wahrman Dr. Stassen MKTG 4443
About the Category Tomato Ketchup can be found in nearly every household in America. It is a staple in the condiment universe and known by many as the quintessential topping for hotdogs, hamburgers and french fries. It is because of this widespread popularity and notoriety as one of the most most popular condiments that I have chosen to analyze it for this audit. While regular tomato ketchup still dominates the category, I have found that specialty ketchups have begun penetrating the market and creating unique competition.
Heinz Del Monte Hunts Private Label
Category Role • I selected Ketchup somewhat out of limitation. Mustard is my favorite condiment was unfortunately taken when selections were being made and ketchup was the next best thing. I also wanted to choose a product that is a staple in many homes yet a category that I was unsure of the differentiation between demographics. • Size, in U.S. Sales • $515 million • Not exactly a huge category but not small either.
Stores Audited • 5 Stores Audited by Christopher Wahrman • Walmart Super Center #144 (MLK) • Marvin’s IGA #220 (College) • Ozark Natural Foods (College) • Harps #176 (Garland) • Aldi’s (MLK) All of these stores lie in Fayetteville, yet they lie across the city and may pull from different demographics within Fayetteville due to their location.
Stores Audited • Fayetteville-# of SKU’s • Walmart Supercenter MLK- 28 (Deepest) • Harps on Garland- 18 • Marvin’s IGA on College- 24 • Ozark Natural Foods College- 7 • Aldi on MLK- 1 • Total: 52 SKUs found.
Retailers SKU Percents • Not too surprising to see that Walmart has the majority of the SKU’s found. However IGA had nearly as large of an assortment with 46% of the total SKU’s found. They also had many SKU’s unique to it whereas Walmart’s shelf space consisted mostly of Heinz and Hunts.
Changes in Category • Heinz has greatly increased its size options and varieties of Ketchup since 2010 adding smaller 20oz. bottles and new varieties including Balsalmic Vinegar, Simply Heinz, and dip n’ squeeze packets. • Marvin’s IGA has introduced Melinda’s ketchups. While not a private label, they are unique to Marvin’s IGA and cannot be found at the other stores audited in Fayetteville. • Prices have stayed fairly similar, raising slightly for some SKUs and decreasing slightly for others. • The category has grown overall from 34 SKU’s in 2010 to 52 in 2014. While the store audited were slightly different from the 2014 data, there is still a great increase in the # of SKU’s found at Walmart, IGA and Harps.
The Suppliers • Heinz dominates the category having with 15 out of the 52 SKUs. (nearly 30%) • Hunt’s lags behind having only 7 unique SKUs among the 5 stores audited. (13.5%) • Private label has a smaller presence than I would have guessed with 13 out of the 52 SKUs shared among three manufacturers (Walmart, AWG and Aldi’s), across the 5 stores audited. • Ozark Natural Foods shelved only private manufactures and charged nearly double for similar and even smaller size containers as Walmart and Harps did for Heinz and Hunt’s. • Del Monte had a surprisingly low amount of shelf space in the context of their presence across grocery aisles showing up with only two at Walmart and five at Harp’s, which were the only two stores which carried the brand. We will discover why, despite its good scores among low income demographics, it has so few facings.
SKUs • 52 Total SKU’s found in audit • Walmart on MLK carried the most SKUs at 28 • Among the 5 stores • Heinz had the most SKUs at 15 • Hunt’s followed in second with 7 SKUs • Private label (comprised of 3 manufacturers) had 13 total. • This means 17 SKU’s composed the rest of the category, spread amongst 12 different manufacturers. • Heinz, Hunt’s and Private label therefore dominate the Ketchup Category.
Listing of Firms Dominant Brands Heinz Hunt’s Unique Brands by Store Walmart Aldi’s Harps IGA Ozark Natural Foods Struggling Brands Del Monte Red Gold • Great Value • Burmans • McIllhennyTobasco • Red Gold • Melinda’s • Walden Farms • Muir Glen Organic • Woodstock • OrganicVille • Annies Naturals • Sir Kensingtons • Westbrae Natural
Gross Margins • To arrive at the gross margins for this category, I had to find the highest possible input for unit 2 to create (mostly positive gross margins across each manufacturer. • Cost per ounce was generally from 30 to 60 cents per ounce while some of the Ozark Natural Food ketchups were a great deal higher. • For Heinz I had to increase the unit 2 so because there is no way they would be paying .04 per ounce.
Category Review • Heinz dominates the category • Carried by three out of the five stores • Comprises 50% of the shelf space at Walmart and over 25% at the other two locations • It is because of it’s high gross margins and high sales that it is stocked so high. • Private label should remain stagnant as it is an unpopular choice against the household names of Heinz and Hunt’s. • Category has grown greatly over the last four years introducing many new sizes in popular national brands as well as different varieties • Del Monte should try and increase deal due to very low gross margins percent's and total dollars.
