Kraft Heinz is planning to make ketchup in Canada again.

Kraft Heinz Co. is planning to make ketchup in Canada again, six years after its controversial exit from Ontario’s tomato belt pushed some Canadian shoppers to lash out and switch brands.

Av Maharaj, chief administrative officer at Kraft Heinz Canada, said on Monday the company will start producing Heinz ketchup at its facility outside Montreal, pumping out the equivalent of 13 million one-litre bottles each year starting in 2021.

“There has been an unprecedented demand for Heinz ketchup across North America,” he said, adding that the increase was part of a broader uptick in the sauces category that the company has been tracking for several years.

The Quebec government announced on Tuesday morning that it will loan $2 million of the total $17-million cost to add a ketchup production line at the Kraft Heinz factory in Mount Royal, Que.

The new line is scheduled to start running next summer and will create 30 new jobs, part of a $100-million capital investment in Kraft Heinz’s Canadian operations, Maharaj said. The Mount Royal line will produce 98 per cent of all the ketchup Heinz sells in Canada, save for a few specialty ketchup products that will continue to be made at the company’s facility in Fremont, Ohio, that currently handles ketchup production for the Canadian market.

The Mount Royal plant’s supply of tomatoes — roughly 50 million pounds a year — will be imported from the United States, at least in the short term. Maharaj said the company still has contract obligations with its U.S. tomato suppliers, but plans on switching to domestic producers after those contracts expire.

The hope is … all the tomatoes that we use will be produced in Canada, but we’re still at the early stages,” he said.

But the provenance of its tomatoes were a major factor in the years-long public relations crisis for Heinz ketchup in Canada.

In 2014, Heinz shut down its century-old plant in Leamington, Ont., cut 740 jobs and switched its production to the U.S. At the time, the plant was reportedly processing half of the entire $52 million tomato crop in Ontario.

The closure inadvertently set off what this newspaper described as “

the Condiment Wars

,” with Heinz pitted against mustard giant French’s Food Co. LLC.

The Leamington plant found a life after Heinz ketchup, when Highbury Canco Corp. took it over and kept around a third of the staff. The plant continued to process some products for Heinz, though not ketchup. But French’s started sourcing its tomato paste from Highbury Canco, boasting that its new ketchup was made from Canadian tomatoes. Boycotting Heinz became something of a sensation in Canada, particularly after one shopper pledged to switch to French’s in a widely shared 2016 Facebook post.

But Maharaj said the blowback wasn’t part of Kraft Heinz’s decision to bring ketchup production back to Canada. Instead, he said the move is based on the increased demand for ketchup, due in part to the pandemic, as well as the company’s ability to find

efficiencies in the Canadian supply chain and make room for ketchup production.

“We haven’t actually lost significant ground over the last four years,” he said. “While there was some people upset, Canadians still love Heinz ketchup. And so our market share has been relatively stable over this time.”

Kraft Heinz said it has a 74 per cent share of the Canadian ketchup market, citing Nielsen data. In 2015, Euromonitor International found Heinz ketchup accounted for 84 per cent of sales in Canada.

Maharaj also noted that Kraft Heinz currently uses

176 million pounds of tomatoes annually from the Leamington area, through its contracts with Highbury Canco, just not for ketchup.

Last year, Highbury Canco renewed its agreement with Kraft Heinz to produce products out of the Leamington facility, including tomato juice and pasta sauce. Highbury said that it had tripled its business since 2013, expecting to hit 650 full-time jobs, up from the 250 staff it was able to employ when it initially took over the plant, the Windsor Star reported at the time. 

Financial Post

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