Elasticity of Supply: Booming Ketchup Demand

Soaring demand for individual sachets of tomato ketchup drove their price up by 13% in 2020 as supply did not keep pace.

There has been a big shift in consumer demand to take-out and home-delivered foods leading to an increase in the derived demand for tomato sauce sachets. It takes time for manufacturing capacity to respond to this change in customer preferences. In a sense, they are playing ketch-up!

According to the Guardian: "Heinz are planning to increase their ketchup output by 25% with the opening of two new production lines this month... they are planning to manufacture 12 billion packets to catch up."

One cannot help but wonder about the scale of the plastic waste created by the huge number of single-use tomato ketchup and other packaged condiments that are served with takeaway meals. A good example of negative externalities from consumption.