What can you learn from Heinz ketchup? - Finance and Markets

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The story:

Ketchup, the tomato-based condiment that you find everywhere. Heinz ketchup is the #3 condiment by sales in the U.S. But do you ever wonder where it comes from? Believe it or not, ketchup as we know it today has its roots in ancient Asian cultures.

When the maritime peoples began the age of exploration, sailors were introduced to ke-tsiap. Ke-tsiap was a foul, fermented sauce akin to fish sauce. To the sailors, it was a godsend because they’d been eating the same stale hardtack and salt-beef for months.

Over the centuries, people in England and the Americas had adapted the sauce using other ingredients. Ketchup was made from all sorts of things like walnuts, mushrooms, and even tomatoes. That’s why it says on the bottle “Tomato Ketchup” and not just ketchup.

Today, you can find a whole section of the supermarket devoted to ketchup, but Heinz is the #1 choice. According to an NPR survey, 97% of Americans have had Heinz. Heinz Ketchup also commands 80% of Europe’s market share and 60% in the U.S.

The reason Heinz is the #1 tomato ketchup is because of their flavor. You might think that Heinz would make its ketchup recipe with fresh tomatoes to get the best taste. But Heinz actually turns its vine-ripened tomatoes into tomato paste and uses that to make its ketchup all year long.

Heinz’s secret is consistency. Using tomato paste lets them control the flavor of their product at all stages of the process.

The takeaway for investors:

Even in a hot market, one company will stand out.

Heinz didn’t invent ketchup. They weren’t the first to make tomato ketchup. But they do make tomato ketchup better than everyone else.

When it’s time to add a new sector, industry, or business to your portfolio, don’t add any old company. Take the time to find the best, and it will pay off in the end.

Image: Google