Has low-sugar tomato ketchup managed to halt the abandonment of the category and the decline in Osem and Heinz's market shares? According to Storenext figures that have reached "Globes", in the first week of July, two months after the product launch, the market share of Osem's low-sugar ketchup reached 10.7%, while the market share of Heinz's equivalent product reached 3%, six months after launch. The low-sugar ketchup ate into the sales of both Heinz and Osem's regular ketchup, but also boosted total sales in the category, which had been in decline for a year.
In the past six months, two lowd-sugar ketchup products have been launched in Israel, in anticipation of implementation of the measures introduced by the Ministry of Health requiring manufacturers to mark products containing large quantities of sugar and sodium. In December, food products importer Diplomat, which markets Heinz ketchup in Israel, launched a new ketchup containing 50% less sugar and 25% less sodium than Heinz's regular ketchup, based on the sweetener stevia. The product was sold to retailers at a price 15% above that of the company's regular ketchup, making it dearer for consumers as well.
A few months later, Osem Nestle, which dominates the Israeli ketchup market, launched a reduced sugar and sodium ketchup not based on an artificial sweetener, and announced that the product would be sold to retailers at the same price as that of its regular ketchup, but a check through Pricez revealed that while the average price of Osem's regular ketchup is NIS 10.80 for a 750 gram bottle, the average price of a 710 gram bottle of the low-sugar product is NIS 12.50 (the company says that the difference is in the specific weights of the two products, and that the volumes are the same).
According to the Ministry of the Economy, the ketchup market in Israel is worth NIS 220 million annually. In May and June, the category grew by 2.2% in volume terms in comparison with the corresponding period in 2016, and by 0.4% in money terms. In money terms, Osem's market share rose to 68.8% from 66.4% in May-June last year, while Heinz's share fell from 28.3% to 27.1%.
Last week, the Knesset Health Committee decided to ban the serving of ketchup in after-school care programs, along with sweetened beverages, chocolate spreads, and soups made from soup powders. The companies will presumably seek an exception for their low-sugar products.
Published by Globes [online], Israel business news - www.globes-online.com - on July 24, 2017
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