Heinz Serves New Ketchup with Relish. But Will it Be the Company's New Coke?

H.J. Heinz Co. (HNZ) is changing its ketchup. The company announced Thursday that its flagship brand will get new packaging and a new recipe over the next year. Heinz is the world's most popular ketchup, so that's a bold move -- and one that also has an unfortunate resemblance to Coca Cola's (KO) New Coke debacle of 1985.Launched in 1876, Heinz ketchup has been exported around the world since 1907, and the company produces 11 billion single-serve packets worldwide every year. The ketchup's status as an American institution is a two-way street: It symbolizes both American culture and the shortcomings of our diet. A single packet contains 170 mg of sodium: 7% of the recommended daily allowance. The dreaded high fructose corn syrup is the ketchup's third ingredient, and plain-old corn syrup is number four. (Heinz offers organic and reduced-salt versions, but they're hard to find.)

The reformulated recipe will improve Heinz's nutritional profile. This summer, the company will reduce sodium in its "core" ketchup by 15%, making Heinz the lowest-sodium ketchup line available nationally. And in March, the company will introduce "Simply Heinz" ketchup, containing sugar instead of high fructose corn syrup, in 32-ounce and 15-ounce bottles. The company says a 32-ounce bottle of Simply Heinz will cost the same as a 36-ounce bottle of the regular ketchup, which positions it between regular Heinz and Organic Heinz ketchups.

Dip & Squeeze, Pros & Cons

Heinz is also introducing single-serve packaging that should address customer complaints. Its standard ketchup packets, in use since 1968, will be replaced by Dip & Squeeze packets (pictured) that hold three times as much ketchup, and which are designed to enable consumers to squeeze or to peel open for dipping. Heinz intends the packaging to leave a smaller environmental footprint: According to the company, most customers use two or three traditional packets at a time, so the larger packets with more ketchup should reduce garbage.

But there's a potential downside: an increased amount of wasted ketchup. Cashiers at fast-food outlets routinely dump handfuls of packets in with each order. The cost of individual ketchup packets will "marginally increase," but Heinz is not working directly with restaurant chains to educate employees about the packaging change. The new packaging could translate into extra revenue for Heinz, but it could come with a stiff price for its retail customers.
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