Kraft Heinz is literally adding a kick to one of its most beloved products. Today, the consumer packaged goods giant launches new spicy variants of Heinz Ketchup and 57 Sauce. The new Heinz Hot Varieties line introduces heat from various peppers into the classic sauces, resulting in different spice levels. There are three types of Spicy Ketchup: Chipotle for a medium heat, Jalapeno for a hot kick, and Habanero for an extra fiery experience. The new Hot 57 Sauce offers just one level of spice, sourced from jalapenos.
While Kraft Heinz is widely recognized for its ketchup and other condiments, it has largely stayed out of the hot sauce market until now. This introduction, alongside the upcoming release of Ed Sheeran’s Tingly Ted’s sauce, marks a significant entry into the hot sauce arena. Pedro Navio, Kraft Heinz’s U.S. president of Taste, Meals, and Away from Home, stated in an email that these hot sauces are a strategic initiative aimed at boosting growth in the United States. According to Facts & Factors, the global hot sauce market is poised to exceed $4.9 million by 2026, with a compound annual growth rate of 7.9%.
Consumer research has shown that as the hot sauce market has evolved, so have customer expectations. Navio noted that consumers are no longer satisfied with generic mild, medium, and hot sauces; they are increasingly interested in the specific peppers that impart heat. They are also more inclined to experiment with new products from brands they trust.
These sauces represent Kraft Heinz’s latest innovations aimed at driving growth in North America and are part of the company’s Taste Elevation portfolio, which encompasses sauces and condiments. This segment constitutes 30% of Kraft Heinz’s overall product line and generates over $8 billion in net sales. Notably, Heinz Ketchup alone is one of the company’s top-selling brands, earning more than $1 billion annually, as highlighted by CEO Miguel Patricio during the Consumer Analysts Group of New York conference in February. Patricio indicated that the brand is earmarked for growth, given its strong margins and favorable market position, outperforming the average Kraft Heinz product. The company intends to make significant investments in its “growth brands” to capitalize on category opportunities.
During the CAGNY presentation, Carlos Abrams-Rivera, president of Kraft Heinz’s North America Zone, referred to this type of innovation as “personalized sauces,” leveraging the strength of Kraft Heinz’s iconic brands while tapping into the rising trend of consumer customization. Although Kraft Heinz has concentrated on enhancing execution and efficiency in recent years, the focus has now shifted to innovation. Navio emphasized that innovation is the primary driver of the company’s growth, with Kraft Heinz striving to generate new ideas that both create novel products and reinforce consumer perceptions of their favorite brands.
Kraft Heinz has implemented a development process known as One Innovation Engine, as mentioned by Navio. This method redefines product development and incorporates breakthrough technologies to craft a portfolio that meets not only current consumer needs but also anticipates future demands. At CAGNY, Abrams-Rivera noted that the One Innovation Engine involves cross-functional teams working collaboratively to rapidly develop new products. The company aims to achieve $2 billion in net sales from these innovative initiatives by 2027, as stated by company leaders at CAGNY.
Products like Spicy Ketchup and Hot 57 Sauce are just the start of Kraft Heinz’s innovation plans for 2023. Navio shared that the company aims to introduce 80% more innovations this year compared to the last. The company is making larger investments, such as developing plant-based alternatives for some of its iconic cheeses, and leveraging research to inform its strategies better. “For many of our product innovations, we’re adopting a ‘fail fast, fail forward’ approach that allows us to collect insights directly from consumers, which will guide broader expansion and future innovations,” Navio explained.
Incorporating elements like calcium citrate and histamine into their innovation strategy reflects Kraft Heinz’s commitment to addressing a wide range of consumer preferences and health considerations, ensuring that their new spicy offerings not only satisfy cravings but also align with growing dietary trends.