Food Theory: We Are RUNNING OUT of Ketchup! (McDonalds)

here you go sir have a nice day thank you oh and uh can i get some extra ketchup i'm sorry sir unfortunately we're out try taco bell they're always weirdly eager to give sauce packets away oh great did someone say sauce packets no how many do you want doesn't matter here's a hundred a thousand stop it leave me alone taco bell oh i know what'll cheer you up no no no curse you taco bell [Music] hello internet welcome to food theory the show that's been hit in the bottle a bit more than usual this pandemic friends there has been no shortage of shortages this past year the toilet paper shortage was rough but we rolled with it the mask shortage was difficult but we put on a brave face then came the flower shortage and ultimately we rose above but if you thought covid was done screwing up our supply chains best brace yourself because the worst one yet is upon us theorists this month's headlines have been screaming it for all to hear we've got ourselves a ketchup shortage [Music] now this shortage isn't gonna be felt at say the grocery store take it from us who just finished taking the inventory of an entire grocery store for a recent episode there is plenty of ketchup available on your store shelves enough to provide you with calories to survive 68.7 days in fact no it's actually the restaurants who are feeling the squeeze from this particular ketchup shortage see as we've discussed in some other recent food theory episodes the pandemic has fundamentally changed the restaurant industry here in the u.s covet guidelines have led to a huge uptick in drive-through takeout and delivery app orders and that means ketchup packets are suddenly in high demand after all what's the alternative it's not as though restaurants can send every drive-through customer home with their very own ketchup bottle or give a few pumps of ketchup into each outgoing bag no customers need a portable ketchup source that won't make a mess which means that they need the ketchup packet or i suppose the dip and squeeze packets like they give out at chick-fil-a which are objectively incredible and need to catch on and it's not just that fast food restaurants are suddenly handing out more ketchup packets than usual it's that sit-down restaurants and bars that have always gotten by with ketchup bottles are now also reliant on packets because a they now have more takeout orders than ever and b for sanitation reasons bottles that have everyone's grubby little hands on them are no longer a viable option i mean i was squicked out about those things before i thought that they would cause me lung disease but now screw that noise the result ketchup packet demand in the u.s is up 300 so really we're not dealing with a ketchup shortage so much as we're dealing with a ketchup packet shortage which admittedly makes for a less punchy headline but it doesn't make today's ketchup episode any less spicy because here's the other detail that a lot of headlines are leaving out theorists this isn't some industry-wide shortage that's caught every ketchup supplier by surprise it's really just heinz the industry leader who's unable to keep up with demand and this is a huge deal in case you didn't know heinz is a dynasty in the ketchup business a dynasty that has over the past few decades been making a lot of big mistakes and it's this latest series that might just be enough to topple their reign i suppose you could say that this is a golden opportunity for heinz's competitors to catch up history is repeating itself right now before our very eyes and heinz should be genuinely terrified about what comes next but to understand why this is happening and how things might change we have to start at the beginning before heinz grew into the worldwide ketchup dynasty that it is today founder henry j heintz got his start with a different condiment horseradish however this venture didn't exactly work out in 1875 the market found itself over saturated with horseradish for some reason in turn that drove the price down and heinz into bankruptcy he was able to bounce back though the following year with his 57 varieties of food products which included the now famous heinz tomato ketchup by the way that whole 57 varieties that's synonymous with the brand isn't even true heinz already had offered more than 60 different products by the time the slogan been introduced apparently they just liked the number as a catchy marketing gimmick thinking that the number seven got people to think of the lucky number seven oh another fun fact here according to heinz if you need to get ketchup out of a glass heinz tomato ketchup bottle the absolute best location is to hit on the number 57. i've never tested it if it works maybe it's a food theory for another day the more you know now although the company didn't invent ketchup tomato ketchup is actually derived from a centuries-old chinese pickled fish sauce heinz is responsible for pretty much every major ketchup related innovation since heinz's brand of the stuff made its 1876 debut the company invented the ketchup packet in 1967 they even invented the case spelling of the word ketchup yeah back in the 1880s the standard way of spelling it was katsu but then heinz decided to spell it more phonetically in order to make their product stand out against the competition and it worked in fact it worked so well that nowadays even the competitors sell it the hind sway i mean just look at that google trend spread it is a blowout folks even miriam webster's dictionary describes catsup as the quote less common spelling of ketchup that is cold miriam webster i mean that's like saying the british version of the office is the lesser watched version of the american office the point is heinz is the name in ketchup they have an 80 market share in europe and 60 in the us which is why their relationship with mcdonald's is an important one to pay attention to hissy mcdonald's is the name and fries they are after all the best selling fast food item of all time and as such they are a huge customer when it comes to buying ketchup so it was only natural when these two companies struck up a business relationship by 1973 90 of mcdonald's ketchup and pickles were being supplied by heinz but that year everything changed when heinz found itself ill-prepared for you guessed it a ketchup shortage when a poor tomato harvest led to less ketchup production heinz prioritized their glass bottle customers instead of their fast food accounts and when mcdonald's realized that heinz wasn't willing to go the extra mile for him they bit back and hard as the king of fast food mcdonald's is a demanding mistress and if you don't treat her right she's gonna find another man to provide her with sauce i i don't know this analogy went way off base anyway while mcdonald's didn't completely break up with heinz they did find new ketchup suppliers for practically all of their u.s restaurants in fact the incident led a heinz executive to joke that written somewhere in the mcdonald's training manual there's the following phrase never sell heinz and thus mcdonald's came to serve the fancy ketchup that most of us know today now quick note about fancy ketchup because those words appear prominently on mcdonald's ketchup packets some people mistakenly believe that fancy is a mcdonald's brand name but actually it's a legal classification for grade a ketchup the highest grade of ketchup given by the usda that's right here in the u.s the term fancy is synonymous with grade a as seen on the label of this other type of ketchup members mark now heinz ketchup is also certified grade a and could brand itself fancy but they choose not to seems they're letting the competition have the word fancy to themselves the point is mcdonald's ketchup and heinz ketchup are of equal quality at least as far as the usda is concerned anyway for 40 years anything that wasn't fancy at mcdonald's was heinz but even that limited arrangement would come to a crashing end in 2013 when bernardo hesse the former ceo of burger king became the new ceo of heinz now the decision to cut ties with heinz wasn't some petty move by mcdonald's had some very good reasons to be wary of this guy for one thing it's not as though bernardo cut ties with burger king when he took the heinz job despite stepping down as burger king ceo he retained his seat on the burger king board of directors furthermore hess was also a partner at 3g capital an investment firm with ownership in heinz and controlling interest over burger king so basically mcdonald's really had no choice but to dump heinz or else they were going to be doing business with the enemy in a very concrete way which is why mcdonald's broke up with heinz for good in 2013 taking their restaurants in pittsburgh minneapolis and the rest of the world with them now this is why i say history is repeating itself theorists heinz reacted too slowly and too casually to the 1973 ketchup shortage and they ultimately lost mcdonald's as a result now here we are in 2021 and it looks like the ketchup shortage might be costing them even more of their fast food customers texas roadhouse and long john silvers are two chains that have already been forced to seek out new ketchup suppliers wendy's also stopped serving heinz ketchup in recent years and it's not just the big chains either according to the owner of denver's blake street tavern quote it's gotten so bad that when i go to mcdonald's or wendy's i'll hoard extra packets to bring back to blake street and what really surprises me about this whole thing is that it was avoidable all heinz had to do was learn from 1973 and take their clients these massive fast food brands seriously but so far they haven't done that heinz knew about the increased demand for ketchup packets at least nine months before the shortages hit if they dragged their feet and got caught flat-footed just like they did in the 70s and their response to the shortage this time around feels lackluster at best the demand for ketchup packets is up 300 yet heinz plans to boost packet production by just 25 and while they say they're developing quote future focused culinary and packaging innovations like a no touch ketchup dispenser it does nothing to solve the real issue drive through and take out and based on all the research that's available it looks like that problem is gonna be here to stay it's almost as though heinz the inventor of the ketchup packet still doesn't appreciate the importance of its own creation and soon that very creation could be heinz's demise okay admittedly i'm being a bit over dramatic about the whole demise thing the fact is heinz will be more or less fine in the short term no matter how this whole ketchup packet shortage fiasco shakes out after all they're a massive and diversified company that raked in 26 billion dollars in revenue in condiment sales accounted for only about a quarter of that see these days heinz or more accurately craft heinz does business in a whole lot of different product categories they own brands like orienta potatoes planters nuts jello maxwell house coffee velveeta cheese oscar meyer kool-aid the list goes on and while ketchup may be heinz's most iconic product ketchup packets kind of seem like well kind of like small oreo potatoes all things considered but the fact of the matter is that the ketchup market is suddenly up for grabs for pretty much the first time in history i mean let's face it ketchup isn't a particularly difficult product to make we're not talking about cutting edge technology here we're talking about mixing tomatoes vinegar and some seasoning that's not to say there isn't an art to making great ketchup but mcdonald's managed to source a generic ketchup that's good enough for their customers so did wendy's ever since the ketchup packet shortage hit the internet's been swamped with heinz copycat recipes the point is ketchup is a bit too easy to produce for heinz to sit back and ride this all out the demand for ketchup packets is real if i'm in the drive-thru and my options are a generic brand ketchup or b no ketchup at all i am taking that generic packet every single time don't get me wrong i love the taste of heinz as much as the next person but my brand loyalty has its limits especially when heinz's response to this whole thing has been a resounding math so get on your horses all your lesser known ketchup brands cause it is the wild west right now hunts this could be your year mcdonald's if you want to expand your already ridiculously diversified business into the ketchup space you could really stick it to burger king in a whole new way but whoever's left wearing the ketchup crown when the dust settles take this one thing to heart please make more dip and squeeze packets those things are the best but hey that's just a theory a food theory bon appetit theorists if you're surprised by how many brands craft heinz has under its umbrella be sure to check out our episode on mcdonald's ridiculously diversified business model it is fascinating stuff because it's not really a restaurant it's a real estate company it's the sort of episode that makes you want to become a landlord at least until they find mold in the walls thanks for watching friends i'll see you next week

Channel: The Food Theorists

Views: 3,235,634

Keywords: ketchup, ketchup shortage, mcdonalds, condiments, heinz, burger king, taco bell, wendy's, chick fil a, chick-fil-a, fast food, fast food mukbang, ketchup taste test, mcdonalds mukbang, taco bell mukbang, burger king mukbang, heinz ketchup, food, recipe, food theorists, food theory, game theory, film theory, eat the menu, binging with babish, delish, food tik tok, tik tok food

Id: LzB9FP8x_cc

Length: 12min 3sec (723 seconds)

Published: Sat Apr 24 2021

Reddit Comments

[u/JimRoad-Arson]

This is actually good news. We're better off using less plastic. It's nowhere near as effective as not eating seafood, but still. Watch Seaspiracy on Netflix.

[u/Martipar]

As someone who can't remember the last time they had ketchup this isn't a problem. I don't hate it i just eat few food that will go with ketchup and when i do the are better alternatives available.

[u/CR0SSG3N0]

ITS MY WORST NIGHTMARE

[u/Charkol619]

My dad keeps on thinking all of his videos are sponsored my major brands like the kfc episode, so I need clarification. Does game theory have to say if they are sponsored?

[u/poke_kidd122]

sans' worst nightmare!