I Heart Ketchup

If you've read my previous blogs, you already know that I grew up in Pittsburgh. Pittsburgh is many things for many different blogs, but for this particular blog, it's the home of Heinz ketchup. Heinz is one of those companies that helps define a city. Pittsburgh's (relatively) new football stadium is called Heinz Field, and the drive out of the city on Route 28 gives every commuter a glimpse of the Heinz plant, an unchanging, even reassuring aspect of the landscape. But perhaps more to the point, you won't find a restaurant in Pittsburgh that serves Hunts or any other brand aside from Heinz. Of course, that's true for most other places too.

Malcolm Gladwell has already done the unique stature and market leadership of Heinz ketchup justice in his New Yorker article "The Ketchup Conundrum," so there's no need to rehash it again here. But I will mention a couple of things that Heinz (and its impenetrable ketchup empire) has taught me as an MBA and an aspirating entrepreneur. First, most businesses cannot rely on intellectual property to protect their market positions, particularly in today's global economy, but Heinz has still managed to build a fortress around its product because no one can replicate it. Brand aside, the ketchup itself is difficult to copy because it requires incredibly precise controls on the key input: tomatoes. Gladwell points out: "tomatoes vary, in acidity and sweetness and the ratio of solids to liquid, according to the seed variety used, the time of year they are harvested, the soil in which they are grown, and the weather during the growing season." Couple that with protecting the recipe by trade secret, and the result is defensibility more insurmountable than any patent. Secondly, Gladwell points to a unique quality of ketchup. Ketchup is unique in its universality, unlike mustard and pasta sauce, which have many different types that appeal to many different people. In a world where mass customization is king--where you can design your own personal boots on Timberland.com, or create your iGoogle home page to suit your personality and tastes--the idea of one, universal product that is the optimal product for everyone is a powerful one.

Ketchup may be an extreme case, but surely there are other examples of products that transcend market segments and standalone without begging for line extensions. Make one and you'll be the envy of entrepreneurs and major corporations alike!