The Real Reason Restaurants Are Running Out Of Ketchup

If you don't get enough ketchup packets with your french fries next time you hit the fast food drive-thru – or if you get none at all – don't blame the employee at the window. Like a lot of other supply-chain problems over the past year, the current ketchup shortage is COVID-19's fault.

The Wall Street Journal reports that Kraft Heinz, which makes most of the ketchup sold at retail in the U.S., has had trouble keeping up with the dramatic swings in demand after the pandemic led to restaurant closures and stay-at-home orders. Retail ketchup sales were up 15 percent in 2020, and Heinz scrambled to meet the demand for home-use ketchup. Meanwhile, restaurants were handing out more single-serve ketchup packets, thanks to the pandemic. In some cases, their business was restricted to takeout and delivery only. When restaurants were able to open their dining rooms, customers still had to use the packets because ketchup bottles had been taken off the tables to reduce the spread of the COVID-19 virus.

The Wall Street Journal isn't reporting that any of the big fast food chains have entirely run out of ketchup, but Long John Silver's came close. They had to switch suppliers to keep ketchup packets in stock. Due to high demand, the price of the packets has gone up, forcing Long John Silver's to spend $500,000 more on ketchup.

A Heinz representative told The Wall Street Journal the company is doing everything it can to meet the demand for ketchup packets. Heinz plans to increase production by 25 percent this month so that it is churning out packets at a rate of more than 12 billion a year. But it's not as if Heinz is just now finding out about increased demand for those single-serve packets. CNN reported nine months ago that demand for single-serve condiments was spiking. At FoodServiceDirect.com, sales of condiment packets were up 300 percent in the first half of 2020, compared to the same period in 2019.

If Heinz was slow to respond to the changes in demand for ketchup, they may pay a price in customer loyalty. Texas Roadhouse's 630 locations bought 55 million ounces of ketchup from Heinz in 2020. Now, the ketchup maker can't keep the steakhouse chain properly stocked. Texas Roadhouse managers are running to Costco to stock up, and the chain may even switch brands.