Ketchup’s Big Moment: Our Top Condiment Goes Upscale
By Jennifer Wells

For decades, Heinz has dominated the ketchup market. And while the brand has introduced versions tweaked with balsamic vinegar or chili spice, it’s the classic version that dominates kitchen tables and children’s palates around the world. But as Star feature writer Jennifer Wells reveals in her new Star Dispatches ebook, Ketchup’s Big Moment: Our Top Condiment Goes Upscale, the kiddification of ketchup is now under serious assault, with much smaller companies following the lead of mustard and introducing high-end, gourmet-friendly varieties. Is the threat to Heinz, which is exiting Leamington, Ont., after a century of making ketchup there, a serious one? Is the red stuff going the way of Grey Poupon?



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Excerpt:
Ketchup’s Big Moment: Our Top Condiment Goes Upscale

There’s a chill wind from the east as Wayne Palichuk steps behind the shelter of his rusting 4 x 4, hitching his thumbs up under his armpits the way he does, his grey-blue eyes casting across the sandy acreage and the bleached, stumpy remnants of last year’s seed corn stalks.

He has ordered in 17 tonnes of fresh mushroom substrate, enough to tamp down a single acre where the soil keeps blowing off. He’ll receive five more loads of the compost tomorrow, moving quickly now to ready his fields with the rich organic matter that’s left after the mushroom growers have completed their own harvest. The substrate will help ready the beds for the tomato seedlings that up until mid-April Palichuk didn’t know he’d be planting.

It’s been a scramble. Ever since Heinz announced the closure of its Leamington plant in November, local farmers have been on tenterhooks. Even after the proposed buyout by Highbury Canco Corp., with a contract to co-pack tomato juice for Heinz along with a few other products — tinned beans and such — the new company’s tomato requirement was unknown.

Palichuk is one of the lucky few. A 43-farmer Heinz supply base spread through Essex and Kent counties has been shrunk to 10 for the new company. Palichuk wonders if the fact that the family has grown for Heinz longer than any other — some 80 odd years now — may have been a factor in his favour.

That change has come isn’t a huge surprise. Ever since the Oracle of Omaha, investor Warren Buffett, and the Brazilian private equity firm 3G Capital bought Heinz early in 2013, there has been an expectation that the factory was going to be right-sized somehow. “In the back of our minds we always said this factory might not exist as what it was in the olden days,” Palichuk says. “But we always thought they would stay here.”

Palichuk is 58, third generation on the land and so proud that eldest son Shawn, a graduate of the agriculture program at the University of Guelph, is working full-time on the farm and loving it.

The common concern for father and son and the farming community for that matter was the factory would “deseasonalize,” taking itself out of the business of processing fresh tomatoes, effectively severing direct relations with the tomato growers.

But a total shutdown? The news was a shock. A punch.

Palichuk’s first thought upon hearing the news of the closure? “We’re done.”Heinz dominates the town, sitting at the core intersection of Oak and Erie Streets, its 200-foot-high yellow brick smokestack blazing the name “Heinz” in commanding black lettering. Scott Holland, who wrote a book on Heinz Canada upon its centenary in 2009, says there were two stacks initially and the closest he could get to the number of bricks that went into building them both was a rough 15,000.

One of the stacks came down in ’89 to make way for a new jet-powered system — a marker of progress. The obverse was noted this spring, when a hole was blown out the Erie side of the factory to extricate Line 59. It was on Line 59 that Heinz Canada produced its 100-ounce jug of ketchup — Big Red they call it. That line has been shipped to the Heinz factory in Muscatine, Iowa, the state having extended tax credits in exchange for expansion and job creation. In Muscatine, Heinz is a growth story.

In Leamington, the Highbury owners are hoping for success based on a far smaller footprint. On May 23, approximately 150 Heinz employees will be severed from the factory. At the end of June, a further 350 employees will exit, leaving a core work force of 250 shouldering what has been presented as one of the key tricks to survival — substantially lower, as yet undisclosed, wages. Volume will fall by an estimated 60 per cent.

In the first week of May, with the deal still in negotiations, plant manager Sam Diab acknowledged that planning for the future required “a bit of a leap of faith.” As winter nodded toward spring, the company that was not yet a company needed to contract for tomatoes. Otherwise, there would be no juice to produce. “So the intention is, we make the commitment, grow the seedlings, grow the tomatoes. The hope is that we will process them as Highbury . . . Failing that, I’m assuming Heinz would want to run their tomato juice this year and then would have to just delay the inevitable.”

On May 21, Heinz announced the completion of the deal. As of June 27, Highbury will take over as operator, Diab will take over as president and the community will wait to see if this much smaller operation can make a go of it. “It’s an aging facility and it’s a large facility relative to the volume, so what it really comes down to is how do you streamline your footprint and remove some of the complexity that’s here and make it a viable entity in the future,” says Diab.

This much is certain: Leamington ketchup is done. No longer will 200 bottles of the red stuff roll off the Leamington line every minute. No longer will the plant, which really has played a muscular role in the growth of the global conglomerate, boast of 80 million bottles of ketchup made annually. No longer will Heinz ketchup sport the “Proudly Prepared in Canada” label, the one with the red maple leaf, a claim made since the first bottle of Leamington ketchup was stoppered in 1910.

As a result, that monster-sized rendering of a ketchup bottle on the Oak Street side of the factory, the one with the crowing banner “Home of Canada’s Finest Ketchup,” will have to go. As for the argument over whether the Canadian version is sweeter than the Heinz ketchup made in the U.S. of A. — well, that conversation is over.