H.J. Heinz Corp. will take on General Mills in its organic home court by introducing organic ketchup to the U.S. market. The result of the tussle may be the legitimization of one of America's best-known conventional brands in the organic market, observers said.
Heinz Organic Ketchup, priced about 30 percent higher than the company's conventional versions, will challenge General Mills' Muir Glen Organic Ketchup and other natural brands for a share of the $600,000 U.S. organic ketchup market.
"The growth rate in condiments has been 15 [percent] to 20 percent over the past couple of years," said Michael Vaszily, brand manager for Heinz Organic Ketchup. "We saw this as a growing area and have received numerous consumer inquiries from people looking for organic ketchup."
Vaszily said Heinz isn't necessarily looking to court customers away from its conventional ketchup—at least not initially. "We are targeting organic consumers, people who want the product in an organic variety," he said.
But within 12 months of the September 2000 launch of Heinz Organic Ketchup in the United Kingdom, the category had doubled, Vaszily said. "At the end of 12 months, we had grabbed the organic category, solidified and mainstreamed it."
By October 2001, Heinz had a 78 percent share of the organic ketchup market in the United Kingdom and took that as a sign consumers were ready for other Heinz-branded organic products. Since then, Heinz has rolled out organic spaghetti sauce, baked beans, soups, baby food, and last spring, an organic salad dressing.
Given that interest in organic products is building, observers said they would not be surprised to see a similar market reaction in the United States.
"Currently in North America, there are very few recognized national brands of organic foods," said Michael Neuwirth, director of corporate communications for New Rochelle, N.Y.-based Acirca Inc., which manufactures the Walnut Acres brand of condiments, sauces and soups. "The opportunity certainly is there for an organic brand to build its own identity, and nonorganic brands are beginning to test the waters to see if [they] can go organic."
Whole Foods accepted Heinz Organic Ketchup, and a deal with Wild Oats is likely to come soon. Vaszily said the company is still working through agreements with mass markets.
Although Heinz Organic Ketchup will compete with The Hain Celestial Group's line of Westbrae Natural ketchups, Vaszily said the company does not see itself as cannibalizing its own market. Heinz owns about 20 percent of Hain Celestial.
"We used Hain quite a bit to do research with consumers," Vaszily said. "Consumers received the product well. It contains quality natural ingredients, and Heinz is a reputable ketchup brand name that they had no issues with."
Natural Foods Merchandiser volume XXIII/number 8/p. 10