1. Christopher Wahrman Dr. Stassen MKTG 4443
Tomato Ketchup Spring 2014
Christopher Wahrman
Dr. Stassen MKTG 4443

2. 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.

3. Product Snapshot Tomato Ketchup
TOTAL CATSUP (COND/GRAV/SAUC) OZ. Total Consumption BehaviorScape Framework
LifeStyle
BehaviorStage
Cosmopolitan Centers
Affluent Suburban Spreads
Comfortable Country
Struggling Urban Cores
Modest Working Towns
Plain Rural Living
Total
Start-Up Families HHs with Young Children Only < 6 91 94
135
105
123
115
Small Scale Families Small HHs with Older Children 6+
118 92
112
116
143
117
Younger Bustling Families Large HHs with Children (6+), HOH <40
152
150
175
196
167
209
178
Older Bustling Families Large HHs with Children (6+), HOH 40+
188
165
190
202
173
Young Transitionals Any size HHs, No Children, < 35 44 68 81 53 67
101 65
Independent Singles 1 person HHs, No Children, 35-64 39 42 50 56 52 64 51
Senior Singles 1 person HHs, No Children, 65+ 37 32 38 47
Established Couples 2+ person HHs, No Children, 35-54
109
108
140
111
Empty Nest Couples 2+ person HHs, No Children, 55-64
106 95
122
104
Senior Couples 2+ person HHs, No Children, 65+ 74 77 89 83 96 98
119
100

4. Heinz Del Monte Hunts Private Label Demographic Variables % Volume
% Volume
Index
Race of Head of Household
White
70.7%
102
Black
11.6% 97
Hispanic
12.5%
100
Asian
3.1% 72
Other
2.1% 94
Number of Persons
1 Person
11.2% 41
2 Persons
28.7% 89
3 Persons
19.4%
119
4 Persons
18.8%
143
5+ Persons
21.9%
197
Household Income
Under $10,000
6.3% 82
$10,000 - $19,999
8.2% 73
$20,000 - $29,999
9.7%
$30,000 - $39,999
10.0% 99
$40,000 - $49,999
8.9%
$50,000 - $74,999
18.7%
104
$75,000 - $99,999
14.1%
$100,000 - $149,999
14.6%
$150,000 or More
9.6%
107
% Volume
Index
58.7% 85
18.8%
157
16.3%
130
2.9% 67
3.4%
152
14.5% 53
29.1% 90
15.3% 95
17.3%
131
23.8%
214
9.9%
129
12.9%
116
11.9%
109
127
11.7%
18.7%
104
9.7% 82
7.0% 57
5.3% 59
% Volume
Index
65.4% 95
13.7%
114
15.2%
121
3.2% 74
2.6%
116
14.1% 52
29.1% 90
18.7%
115
18.5%
141
19.6%
177
7.3%
11.6%
103
11.1%
101
12.1%
120
10.5%
19.9%
111
11.7% 98
9.9% 80
6.1% 68
% Volume
Index
69.4%
101
12.9%
108
13.1%
105
2.0% 48
2.6%
116
13.4% 49
27.2% 84
17.1%
19.0%
144
23.4%
210
9.8%
127
14.2%
130
11.7%
115
10.8%
120
18.1%
9.2% 78
7.9% 64
4.3%

5. 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.

6. Assigning a Role to the Category

7. 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.

8. 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.

9. Retailers SKU Percents
Store
# SKU
% of Category
WMMLK 28
52.85%
IGA 24
46.15%
HRPS 18
34.62%
OZKNF 7
13.46%
ALDI 1
1.92%
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.

10. 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 While the store audited were slightly different from the data, there is still a great increase in the # of SKU’s found at Walmart, IGA and Harps.

11. 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.

12. 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.

13. Listing of Firms Dominant Brands Heinz Great Value Hunt’s Burmans
Unique Brands by Store
Walmart
Aldi’s
Harps
IGA
Ozark Natural Foods
Struggling Brands
Del Monte
Red Gold
Great Value
Burmans
McIllhenny Tobasco
Red Gold
Melinda’s
Walden Farms
Muir Glen Organic
Woodstock
OrganicVille
Annies Naturals
Sir Kensingtons
Westbrae Natural

14. Tomato Ketchup Facings

15. 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.

16. Gross Margin Dollars

17. Mean Gross Margin

18. Circular Trade Areas: Fayetteville Grocery Stores
Demography
Walmart MLK
Marvins IGA
Harps Garland
Ozark Nat. Foods
Aldi's MLK
% HHs
HHs Index
Race of Head of Household
White
77.80%
113
83.2%
121
82.9%
120
83.3%
76.3%
111
Black
7.90% 66
6.1% 51
6.0%
5.9% 50
1.1% 9
Hispanic
5.10% 41
4.0% 32
4.1% 33
15.0%
119
Asian
5.30%
123
3.1% 74
3.8% 88
3.6% 85
0.9% 22
Other
4.00%
178
3.5%
156
3.2%
141
139
6.6%
295
Number of Persons
1 Person
48.00%
177
42.3%
41.8%
154
23.4% 86
2 Persons
31.10% 96
33.1%
102
33.0%
29.5% 91
3 Persons
11.40% 70
12.8% 79
13.4% 83
18.0%
4 Persons
6.30% 48
8.1% 62
7.6% 58
7.7%
114
5+ Persons
3.20% 29
3.7% 37
14.1%
127
Household Income
Under $10,000
25.90%
339
20.5%
268
18.7%
244
17.6%
230
4.6% 60
$10,000 - $19,999
23.40%
209
20.1%
180
18.8%
168
17.2%
9.5% 84
$20,000 - $29,999
14.20%
130
12.9%
118
12.6%
115
12.5%
16.8%
$30,000 - $39,999
11.90%
12.0%
12.4%
122
13.1%
129
10.2%
100
$40,000 - $49,999
7.50%
7.9%
6.8% 76
6.9%
10.3%
$50,000 - $74,999
8.10% 45
9.2% 52
9.7% 54
10.5%
21.8%
$75,000 - $99,999 27
5.4% 46
6.7% 56
7.0% 59
11.7% 99
$100,000 - $149,999
3.90%
7.1%
9.0% 73
9.4%
12.2%
$150,000 or More
1.90% 21
4.8% 53 34

19. Circular Trade Areas: Fayetteville Grocery Stores
Demography
Walmart MLK
Marvins IGA
Harps Garland
Ozark Nat. Foods
Aldi's MLK
% HHs
HHs Index
Age of Head of Household
Age
27.40%
651
21.4%
508
18.8%
447
17.3%
411
7.5%
178
Age
29.70%
197
25.3%
167
28.5%
189
27.6%
183
19.2%
128
Age
13.80% 80
14.3% 82
16.1% 93
16.2%
19.4%
112
Age
10.20% 51
12.7% 63
12.4% 62
12.6%
18.3% 91
Age
9.80%
13.1% 68
12.3% 64 65
15.5%
Age
5.10% 39 57
6.8% 52
7.0% 53
10.4% 79
Age 75 or More
3.90% 37
5.8% 54
5.1% 47
6.6%
9.7% 90
Age and Presence of Children
Age < 6
5.20% 71 69
5.4% 74 78
10.9%
147
Age
8.10% 44
9.6%
10.7% 58
11.0% 60
19.6%
106
Age < 6 &
3.00% 46
4.0% 61
4.5%
8.9%
135
No Children
83.60%
124
81.3%
120
79.4%
118
78.7%
117
60.7%
Housing Tenure
Own
17.40% 27
30.6%
34.7%
35.9% 55
57.1% 88
Rent
82.60%
236
69.4%
198
65.3%
186
64.1%
42.9%
123
Education of Head of Household
Not a High School Graduate
9.10% 70
8.7% 67
6.2%
6.0%
13.8%
High School Graduate
18.30% 72
17.4%
15.1% 59
16.4%
31.1%
122
Some College
40.50%
141
33.1%
115
35.5%
33.9%
25.6% 89
College Graduate
18.00% 95
22.4%
23.8%
125
24.1%
127
18.7% 98
Post College Degree
14.10%
103
18.4%
134
19.5%
142

20. Category Strategy Walmart MLK Heinz
Product continues to provide highest GM$ and GM% so maintain or even raise the shelf space
Del Monte
Despite it being favorable among lower income households, it is one of the worst sellers and should be kept only to keep the depth of the category at a good point.
Harps Garland
Private Label
Harps should slightly decrease the shelf space for its private label category due to its lower GM$ than shelf space.
Hunts
Hunts should also be given slightly more shelf space to match the %gross margins with the number of facings so need can be met.
Marvin’s IGA College
Other
IGA should run deal on their Melinda’s and Walden Farms ketchups. With the right angel they could see traffic from specialty ketchup enthusiasts.
Hunt’s
Hunt’s shelf space should also be decreased slightly due to lower gross margins.

21. Walmart Ketchup Selection

22. 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.