April 6, 2021

The Impact Of Covid-19 Is Catching Up To Ketchup

by Jillian Straw

The impact of COVID-19 on restaurants has infiltrated headlines over the past year. From closures to re-openings to closures again, a lot of attention has been directed towards the high level changes in restaurants. For instance, the number of restaurants that have had to pivot their operations to reflect an emphasis on delivery as opposed to indoor dining.

The general concept is easy enough to grasp. Restaurant customers were unable to sit down and eat their meals, but still wanted to break up the doldrum of cooking for themselves while quarantined or sheltering in place.

The push for delivery has had an impact on the ways restaurants place orders for ingredients with their customers. One glaring difference actually appears in an ingredient most people don’t necessarily think of off the bat: Ketchup

Ketchup is a mainstay of restaurants in America. A full 40% of Ottimate clients order it.

As consumers in America we kind of just assume ketchup will arrive. Whether we order burgers, fries, chicken, onion rings, or any other assortment of food, we expect ketchup to appear in the bag. Back when we were sitting inside our favorite restaurants we expected it to already be sitting on our tables where we could add it guilt free to our meal (or any other less socially acceptable combinations- I’m looking at you ketchup-and-steak people).

So what happened to those lovely table top bottles of tomatoey goodness?

Well, data from Ottimate indicates a sharp drop-off in demand for table-top 20oz ketchup bottles. 

Since restaurants no longer need to keep stockpiling 20oz Bottles for their guests and so it’s 114oz cans to the rescue.

The sharp increase last April shows the industry as a whole recognizing that topping off their tables with fresh bottles (or marrying what’s left after a night of service) was going to be put on pause for the foreseeable future.

Well, how did that affect the prices? We know the basic concept of supply and demand, and with such a drastic decrease in demand the prices should reflect that, right?

In a way, they did. In the same month that 20oz bottle orders tanked and 114oz cans skyrocketed, we can see a sharp decline in price for both. However, the steady demand for those larger cans created a sharp increase in price in the months directly following- a price vendors were able to more or less maintain throughout the rest of the year as many areas were still under strict dining restrictions.

Additionally, according to the Wall Street Journal:

The pandemic has also led to many restaurants pivoting into takeout specialists, making individual ketchup packets the primary condiment currency for both national chains and mom-and-pop restaurants. Packet prices are up 13% since January 2020, and their market share has exploded at the expense of tabletop bottles, according to restaurant-business platform Ottimate.

With many states beginning to reopen restaurants at limited capacity, we’re intrigued to see how this will affect the ordering trends seen thus far across the country.

At Ottimate we’re able to track this data because our customers care about the cost of their ingredients, especially when it comes to price volatility. Price volatility in supply chains can be disruptive because most operators don’t have the ability to update their menu prices to reflect the most current cost of ingredients. One of the solutions to managing food cost volatility is to lock in contracts and enforce them. 

With Ottimate Insights, operators can set up price tracking and price comparison of commonly ordered restaurant supplies across locations, so they can better manage their costs and enforce contract pricing (if applicable).

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