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In November 2013, managers at H.J. Heinz Co. gathered their workers within the cafeteria of the company’s century-old plant in Leamington and broke some bad news.
The plant’s new owners – Berkshire Hathaway and Brazilian private equity finance firm 3G capital – had chose to shut the plant down. It was unclear whether the small Southwestern Ontario town was going to get over this type of crippling blow.
The plant had 740 full-time employees and 350 seasonal workers. The tomatoes it processed for Heinz taken into account 1 / 2 of Ontario’s $52 million crop. Devastated workers left the meeting inside a hail of curses and tears, making panicked calls to real estate agents about the worth of their homes.
A few months later, a brand new company called Highbury Canco Corp. offered a reprieve. The company took over the guarana plant and signed instructions of intent to carry on processing tomatoes for Heinz – but not for ketchup, its former signature product, and not enough to keep more than about one-third from the plant’s workers employed.
Little did Heinz realize that 2 yrs later, lingering anger over its treatment of Leamington would play directly into the hands of 1 of their biggest competitors.
In late 2014 to little fanfare, The French’s Food Co. LLC – best known because of its mustard – started selling ketchup in grocery stores. Heinz hit back a few months later, ramping up distribution and marketing of their retail mustard: “For years, Heinz ketchup has been using the wrong mustard. Well, not anymore,” said the voiceover of the commercial released in April 2015.
Struggling to challenge Heinz’s market leadership, French’s rolled out a brand new advertising campaign positioning itself because the natural, local condiment alternative, free of additives, high fructose corn syrup and gluten. That included buying paste made by Highbury Canco from tomatoes grown in Southwestern Ontario because of its Canadian ketchup.
Today’s consumers, especially millennials, “want things local,” said French’s president Elliott Penner. “They don’t need to see things that they don’t know where they originated from.”
And boy, was he right. A minimum of if you’re counting likes and shares – and prepared to stretch the definition of “local.”
In January, per month after French’s starting delivering press announcements touting that “working with local farmers in Ontario, French’s Ketchup is now made with 100% Canadian tomatoes,” the CBC bit and ran a tale about how Leamington tomatoes were being used for ketchup again. About 6 weeks later, a construction worker in Orillia came across that story and wrote a viral Facebook post with 133,000 shares and counting, saying his family had decided to change to French’s: “Absolutely love it!! Bye. Bye. Heinz.”
When word got out a week ago that Loblaw Cos. Ltd. was pulling regular-flavoured French’s ketchup from stores, citing low sales, the mood on social media turned from love-in to lynch mob.
Yet another post went viral, a video featuring an irate and heavily tattooed man waiting in front of the Loblaws store holding a bottle of French’s ketchup and vowing never to shop there again unless the company reverses its decision. “FRENCH’S are coming up with jobs for Canadians while Loblaws/Heinz take away jobs from Canadians.CALL AND COMPLAIN NOW !!” he wrote in a Facebook post accompanying the recording.
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- Loblaw pulled French’s ketchup because it was ‘cannibalizing’ PC brand sales, leaked memo revealsLoblaws to re-stock French’s ketchup after social networking backlashLoblaw stops stocking French’s ketchup, just like sales skyrocket over viral Facebook post
And complain people did: #Frenchsketchup was a trending hashtag on Twitter and Loblaw announced it might restock French’s regular ketchup (lost within the din was the fact Loblaw hadn’t pulled the product completely: French’s Buffalo and garlic ketchups had not left shelves of the company’s various grocery brands). It had been a definite PR victory for French’s – but maybe not a lot for Canadian jobs.
Just like Heinz, French’s is a member of an overseas multinational. U.K.-based Reckitt Benckiser Group PLC includes a market capitalization of US$46.72 billion and it is portfolio includes brands such as Clearasil, Durex and Lysol, along with French’s.
Loblaw, meanwhile, is one of Canada’s biggest and most successful companies, employing 200,000 people across the nation. Its PC make of ketchup is produced at a plant in Winona, Ont., that employs 430 people; French’s retail ketchup is manufactured in Ohio.
Sylvain Charlebois, a professor at the University of Guelph’s Food Institute, said the social media response was more emotional than rational.
“Other brands might be as Canadian as French’s,” he explained. “In the end, it doesn’t matter. It’s all about perceptions.”
So how, exactly, did that perception spread so quickly?
According to an analysis performed for the Financial Post by McGill University information technology professor Xue Liu and the students Mingyuan Xia and Xinye Lin, the original viral Facebook post by the Orillia construction worker doesn’t show any indications of meddling by French’s or other people. “We believe this post going viral is really a true social event,” Liu said within an email.
The other mystery is whether all the attention has translated into actual sales for French’s ketchup. Penner, the president of French’s, claims it has, saying sales to retailers have quadrupled over the last a month: “It’s humbling what happened. It teaches you the power of consumers…. For anybody to consider that’s not translating to sales, I don’t understand what to say.”
But those numbers are impossible to verify. French’s share of the ketchup marketplace is not big enough for research firms to trace – specifically in Canada, where Heinz ketchup taken into account 84 per cent of sales in 2015, according to data from Euromonitor International. In Loblaw’s statement announcing it might restock French’s ketchup, the organization alluded to previous poor performance in the cash register: “We will re-stock French’s ketchup and hope that the enthusiasm there has been in media as well as on social networking means sales from the product.”
What’s clear is the power of Leamington’s story, a David and Goliath tale that pits hard-working, blue-collar Canadians against a huge, foreign corporation. And while Penner denies it has almost anything to do with Heinz at all, the very fact Canadians are letting French’s play the hero to Heinz’s villain is excellent news for that would-be condiment king.
cbrownell@nationalpost.com
Twitter.com/clabrow
