Heinz Goes to the Garden Department

Heinz-UK, which owns the country’s largest-selling sauce brands (Heinz & HP, which it purchased in 2007), is targeting garden centers for its barbecue sauces and other non-food retailers for other products.

The move is intended to avoid the dominance of supermarkets and the relentless march of their private label products. Heinz has watched its market share in sauces (including tomato ketchup) drop from 79,9% last year to 74.7%, while private label has grown from 15.8% to nearly 19%. Sales of private label products have surged in recent months thanks to retailer promotions. Dave Woodward, president of Heinz’s UK and Ireland business, describes garden centers as “white space opportunities.” The sauces and ketchup are already being sold by Heinz’s foodservice division in garden center cafes, but the company is aiming for retailers like Mothercare, a specialist retailer selling children’s clothing & furniture, as an outlet for its baby foods.

Gas stations and c-stores such as Nisa-Today’s and Spar are also on the radar. Heinz has sold seasonal products in these outlets in the past, but never year-round before. Currently 70% of sales are in traditional supermarket chains like Tesco, Asda, Morrisons and Sainsbury. Unlike many brands, Heinz makes only frozen desserts in a private label format. The move to c-stores will not be a no-brainer, since private label already accounts for 1/3 of all U.K. food sales and is rising in the convenience store channel. Tesco is looking to rent out plots (called “allotments”) to consumers for growing vegetables and raising chickens at its own Dobbies Garden Centres.

This blog includes excerpts from a weekly round-up of food industry & food licensing news provided free to Broad Street Licensing Group's clients, and as a paid subscription service (6 months $695; 1 year $1,125).

Too busy to keep up with the news wires & publications about the food business? If you or your company would like to subscribe to our news service, call Danielle Foley at Broad Street Licensing Group (tel. 973-655-0598) and ask for your free sample or click on our website.