Ketchup shortage is nearing an end, says Kraft Heinz

Brian Sozzi
·Executive Editor
·3 min read
17

The Great Ketchup Shortage of 2021 — which has led to out of stocks of mostly ketchup packets as restaurants removed germ-encrusted condiment dispensers due to the pandemic — has an end in sight.

"If you think about the next few weeks in the summer months, we will be able to be fully supplied for all of the demand needs for a particular Heinz ketchup," Kraft Heinz (KHC) U.S. Zone president Carlos Abrams-Rivera told Yahoo Finance Live.

The Wall Street Journal first reported on the ketchup shortage in early April.

Abrams-Rivera said investments in ketchup-making capacity are kicking in now and should help to alleviate any shortages soon.

"It's a great thing to see how much demand there is for a beloved brand like Heinz ketchup. And the reality is that we actually saw it coming early — it was specifically in our business for foodservice that we saw some of the shortages in the past year. And what we did quickly as the pandemic started and we saw restaurants moving to smaller formats and packaging, was we increased the amount of labor in our factories to make sure we focused on the critical SKUs," explained Abrams-Rivera.

Individual packets of Heinz ketchup are seen at a fast food restaurant in Omaha, Neb. Tuesday, Feb. 28, 2006. H.J. Heinz Co., one of the world's largest food producers, said on Tuesday that its fiscal third-quarter earnings fell 24 percent because of high costs related to downsizing and divestitures.(AP Photo/Nati Harnik)
Individual packets of Heinz ketchup are seen at a fast food restaurant in Omaha, Neb. Tuesday, Feb. 28, 2006.(AP Photo/Nati Harnik)

The ketchup shortage didn't hinder Kraft Heinz from delivering another solid quarter as it continues its turnaround under CEO Miguel Patricio. Backed by the strong eating-at-home tailwinds of the pandemic, first quarter sales rose 3.9% and adjusted operating profits gained 11.6%.

Sales increased in all of the company's business segments: U.S. (up 2.5%); international (up 7.2%); and Canada (up 8.8%). Adjusted operating profits improved year-over-year in all segments, led by a 57.4% increase in Canada.

Here is how Kraft Heinz performed compared to Wall Street estimates in the first quarter:

  • Net Sales: $6.39 billion vs. $6.25 billion

  • Adjusted Diluted EPS: $0.72 vs. $0.60

Kraft Heinz shares gained nearly 5% in Thursday's session and closed up nearly 4%. The stock has been one of the best-performing packaged foods year-to-date, according to Yahoo Finance Plus data — shares are up 21%.

Its stock price performance will likely be put to the test in coming months as Kraft Heinz — like others in Big Food — begin to cycle tough comparisons to consumers stocking up on food last year at the height of the pandemic. To that end, Kraft Heinz said it sees a low single-digit percentage decline in organic net sales this year. Meanwhile, the company forecasts a mid single-digit percentage decline in constant currency adjusted operating profits.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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