A ketchup shortage in the US is causing prices to spike - and it could get harder to find ketchup packets at restaurants

Grace Dean
·4 min read
AP732304337125
Associated Press
  • Over the past year, an increase in take-out orders has caused ketchup sales to spike.

  • At the beginning of the pandemic, ketchup sales were up over 300% from the previous year.

  • Kraft Heinz is working to keep up with the increase in demand by streamlining its process.

  • See more stories on Insider's business page.

The COVID-19 pandemic has wreaked havoc on the global supply chain, causing shortages of toilet paper, Peloton bikes, and computer chips. Ketchup packets are its latest casualty, according to a new report by The Wall Street Journal

Kraft Heinz confirmed the ketchup shortage to Insider. Steve Cornell, the company's president, told Insider that demand for ketchup has outstripped supplies.

Some shoppers told The Journal the popular condiment has already become a difficult item to get at drive-thrus, comparing it to searching for hand sanitizer or toilet paper at the onset of the pandemic.

In July, CNN reported ketchup packets and other single-use items could soon be in short supply. Sales of the packets spiked 300% in the beginning of 2020 from the previous year, according to FoodServiceDirect.com.

The ketchup shortage can largely be attributed to the ever-changing role of restaurants in the pandemic.

Video: How a bidet can help while toilet paper shortages are happening

Because of restrictions on restaurants offering sit-down dining during the pandemic, many have pivoted to offering takeout instead - a move that has significantly increased the demand for condiments in individual-portion sizes. Some restaurants that can offer on-site dining have opted not to use communal bottles, which are high-frequency touch points, to single-serve packets.

More people have also been eating at home, meaning that the hospitality industry is also competing with increased domestic demand for ketchup.

What's more, many unused single-use packets end up in the trash as they are stuffed haphazardly into take-out bags and left at tables. Chef Mike DeCamp told The Journal he sees many packets go to waste.

The Journal reported that prices of ketchup packets have risen 13% since January 2020, citing data from Plate IQ. In order to combat the price hike, restaurants are turning to substitute brands or decanting ketchup from larger bottles into smaller tubs.

Executives from the fast-food chain Long John Silver's told the publication that it had spent an extra $500,000 on ketchup this year because of soaring demand combined with the fact that single-serve portions cost more than bottles.

Steakhouse chain Texas Roadhouse, which went through 55 million ounces of ketchup in 2020, told the Journal it had to pivot to wholesalers and generic brands after struggling to obtain Kraft Heinz ketchup. 

Smaller restaurants have reportedly been struggling with shortages, too. Chris Fuselier, who owns Blake Street Tavern in Denver, told the publication that the restaurant had been "hunting high and low" for ketchup, but had struggled to get enough supplies. The restaurant, which counts burgers and fries among its staple dishes, had to switch from Kraft Heinz to a generic version. As a result, Fuselier said servers often have to apologize to customers for the switch.

Kraft Heinz dominates the ketchup market and accounts for nearly 70% of the retail market in the US, the Journal reported, citing data from Euromonitor.

Kraft Heinz told Insider that early on in the pandemic the company was forced to add extra production shifts and prioritize more popular products in order to help meet the increase in demand.

The company plans to open multiple manufacturing lines in April, with more to follow. It said this would increase production by around 25% and bring its total yearly production to more than 12 billion packets.

The company has also been working creating innovative ways to spare ketchup packets from going to waste. In November, the company created a no-touch dispenser to maintain COVID-19 standards, while cutting back on the single-use packets.

Ketchup shortages at restaurants is one of many difficulties the US supply chain has faced this year in the wake of COVID-19 shut downs and port delays. Many shoppers are already seeing delays and price spikes in anything from furniture to gas and car prices.

Read more about the ketchup shortage over at The Wall Street Journal.

Read the original article on Business Insider