French’s ketchup was ‘cannibalizing’ sales of PC brand, Loblaw memo says

(Photo from Loblaw Companies Limited’s Facebook page)

TORONTO – A leaked internal memo sent to some Loblaw employees said the grocery chain decided to stop stocking French’s ketchup because it was “cannibalizing” sales of its in-house President’s Choice variety.

Loblaw confirmed the memo’s existence but said it wasn’t an official one.

The memo addressed to grocery managers and retailers said it intended to explain why French’s ketchup was being pulled from store shelves.

“We are in the process of delisting French’s ketchup because it is cannibalizing the sales of PC ketchup and has had little impact to Heinz ketchup,” reads the memo.

The Canadian Press obtained a photo of the memo from someone who says they are a Loblaw employee. The employee, who wished to remain anonymous due to fears of workplace reprisal, identified the sender of the memo as a senior director at the company.

Loblaw, however, described the sender as a mid-level employee who is a member of the company’s operations team for a group of stores.

“The memo was unofficial, misinformed and sent by a staff member prior to (Tuesday’s) decision to restock French’s ketchup,” Kevin Groh, vice-president of corporate affairs and communication, said Wednesday in a statement.

“Customer preference was the single reason the product was removed from our shelves, and the single reason it is back.”

Loblaw announced Tuesday it was reversing its decision to discontinue selling French’s ketchup following social media outcry.

French’s ketchup became an Internet darling after a man’s Facebook post lauded the U.S.-based company for using 100 per cent Canadian-grown tomatoes.

Other Canadians answered the call to support local farmers and demand for French’s increased. People shared stories of their local grocers being unable to keep French’s ketchup in stock due to high demand.

The memo indicates Loblaw was concerned about French’s ketchup eating into its President’s Choice profits, but Groh reiterated his company’s position that French’s ketchup simply wasn’t selling.

“In past, French’s ketchup has not come close to matching the sales of the other brands – even when discounted,” Groh said.

The leaked memo also says that social media buzz didn’t necessarily translate to actual sales.

But the memo does take issue with the notion that French’s ketchup is a Canadian-made product. It says French’s ketchup contains Canadian-grown tomatoes, but it is made in the U.S.

A spokesperson for French’s said the ketchup it sells in Canada is produced in both Canada and the U.S.

Loblaw’s President’s Choice ketchup, on the other hand, sources its tomatoes from California, but is produced in Canada.

“If we truly want to support Canadian, we must rally behind PC ketchup since it is made in Canada,” the memo says.

Groh said one brand is not more Canadian than the other, but President’s Choice is continuing conversations to purchase tomatoes from Canadian farmers if high-quality produce can be available in the amount needed for the right price.

“We have not yet found that balance,” he said.