Why is Heinz Ketchup still so popular in Pittsburgh?

by on April 22, 2009 at 7:32 am in Economics | Permalink

From the latest issue of the JPE, Bronnenberg, Dhar and Dube write:

We document evidence of a persistent “early entry” advantage for brands
in 34 consumer packaged goods industries across the 50 largest U.S.
cities. Current market shares are higher in markets closest to a
brand’s historic city of origin than in those farthest. For six
industries, we know the order of entry among the top brands in each of
the markets. We find an early entry effect on a brand’s current market
share and perceived quality across U.S. cities. The magnitude of this
effect typically drives the rank order of market shares and perceived
quality levels across cities.

You'll find ungated versions here.  The upshot is this:

Across 49 current leading national CPG brands, dating back to the late 1800s and early 1900s, we find that the current share in markets close to the city of origin, is, on average, 12 share (i.e., percentage) points higher than the national average of 22 percent.

What's amazing is how long these effects — however they are motivated — last.  Miller Beer was introduced to Chicago in 1856 (a very early launch though technically not its first city) and it still has an advantage there, relative to other cities.  Heinz Ketchup originated in Pittsburgh in 1876 and it still has an market share advantage there, again relative to other cities.

What is the mechanism?  Is it that durable relationships with retailers persist for a very long time?  Do area consumers develop the brand habit and pass it down across the generations?  Or is the brand from a particular area better suited for people of that area in the first place, perhaps for reasons which are demographic or ethnic in nature and somewhat persistent through time?

Slocum April 22, 2009 at 7:51 am

Do area consumers develop the brand habit and pass it down across the generations?

I’d say that’s it (maybe with a bit of the retailer relationships thrown in). I think that the habit often includes an awareness that the product is not popular elsewhere, and so there is a sense of ownership — even if the company is no longer (or never was) local. In Chicago, I would think of ‘Old Style’ beer, for example.

Andromeda April 22, 2009 at 7:53 am

I think it’s not just the ketchup but the Heinz here. I grew up an hour and some away from Pittsburgh, and even I knew that the Heinz family had had a deep relationship with the city. I suspect that relationship element, the family history, persists for a long time in local memory, and we humans are suckers for personal relationships.

sourcreamus April 22, 2009 at 8:02 am

When we have one product exclusively for an extended period of time it conditions our taste buds. The taste of Heinz becomes what ketchup is supposed to taste like. This preference is handed down from generation to generation. Last year I did a small taste test between Hunts and Heinz and the only person to prefer Heinz was from Pittsburgh.

Thomas April 22, 2009 at 8:24 am

Isn’t this just a nondurable goods version of the home-country bias in finance? Of course, that doesn’t answer the question, but it does suggest that perhaps we generally prefer the local to the foreign.

Matt April 22, 2009 at 9:17 am

It’s just better ketchup. Their other products may be closer in quality to the competition, but for Ketchup nobody compares. When you go to a restaurant and they have a different kind, it feels you are eating at some cheap cafeteria.

Zamfir April 22, 2009 at 9:44 am

It might be interesting to compare this with numbers on brand loyalty across generations, and see whether the effect is stronger than expected based on those numbers.

These brands are hardly typical: brands that exist for such a long time are likely to have a strong parent-to-child loyalty effect.

Brian April 22, 2009 at 10:12 am

Dr. Pepper in Texas is a perfect example.

Greg Ransom April 22, 2009 at 10:37 am

Would a neoclassical economist allow that experience shapes — changes — tastes? Can you put that into math? Can you create a journal publication out of that, something for your CV?

Matthew Ernest April 22, 2009 at 10:46 am

Matt: “It’s just better ketchup.”

This other Matt has answered the wrong question. It’s not about being more popular than other brands, but being more popular than other places.

Back to the question at hand, I wonder how this tracks continuing blue-collar employment in the home city, i.e. buying from the employer that is putting food on the table in more than one sense. Does the home city share revert to national mean if manufacturing is moved away?

babar April 22, 2009 at 10:50 am

maybe it pairs better than other ketchups with the other stuff people eat in pittsburgh?

Noah Yetter April 22, 2009 at 11:31 am

I guarantee it’s generational. There’s no other explanation for why anyone would drink Miller beer than “my dad drank it”.

All joking aside, our taste for products like ketchup is definitely shaped by what we eat as kids.

John April 22, 2009 at 11:52 am

The Steelers. Heinz field.

mike April 22, 2009 at 1:00 pm

Colin

Yuengling is from Pottsville, in the east of PA. Strawbs is from St. Mary (up north).

secretivek April 22, 2009 at 1:40 pm

Isn’t this like asking, “Why are the Steelers so popular in Pittsburgh?”

Slocum April 22, 2009 at 1:42 pm

Could this be a reaction to the underreported St. Louis / Chicago rivalry as Chicagoans would not want to be seen drinking their enemy’s beer?

If so, then one would predict sales of Miller would fall off as the rivalry with the Milwaukee Brewers heats up (Milwaukee hasn’t been back in the National League and in the Cubs’ division long enough for it to be very intense yet). But, on the other hand, shouldn’t the hated Green Bay Packers already be depressing the sales of Wisconsin beer?

Mike April 22, 2009 at 1:53 pm

In Arkansas there’s definitely brand loyalty, though with something like Walmart I’d also say that they designed their business based on what’s around them. (Big catch-all stores are convenient when you have to drive 75 miles to get to anything.)

Benito April 22, 2009 at 1:59 pm

I’ve visited Pittsburgh once, but I do remember reading some restaurant reviews in the paper that specifically pointed out that the establishment served Heinz. As if it were some basic fact like “wheelchair accessible” or “open on weekends”. Also note that the design on the Heinz label is a stylized keystone, after the Keystone State.

Heinz does seem to have a knack for maintaining brand loyalty–look at the British products like their “beanz” and salad cream that are considered staples over there.

Another example might be Old Bay Seasoning in Maryland, but are there any other competitors?

Pete J April 22, 2009 at 2:11 pm

The hometown pride issue is there, but even more than that is the ubiquitous name. There’s the already mentioned Heinz field (football is almost religion there). The gigantic ketchup bottle on the skyline certainly keeps the brand in the front of your thoughts.

The Heinz family also supports several non-profit organizations in the city itself. These include the City’s history museum (Heinz History Center), a large scholarship program that brings college students to Pittsburgh (Heinz Scholars), Heinz Hall (symphonic hall), and numerous other smaller charities. They pump millions into the City’s entertainment and culture scene… wouldn’t you continue to support them and by proxy, your city.

gud April 22, 2009 at 2:47 pm

A better question would be, Why would anyone ever vote for a Kennedy?

Discuss.

monkeyboy April 22, 2009 at 4:46 pm

I think brands can be involved in setting a region’s notion of what tastes right.

For non-brands, look at regional pizza styles

Someone who moves from one region to another is often dismayed that the locals don’t know how to make pizza.

I (from New Haven) was flabbergasted when I ordered a pizza in Los Angeles. The first quest they asked was whether I wanted a whole wheat or white crust. WTF? Whole wheat “pizza” is not pizza.

Zamfir April 23, 2009 at 6:21 am

Zbicyclist, the effects he mentions are interesting, and probably much more important for economics as a whole than a home town effect. Buit this study is about home towns in particular, while his mechanisms would work for any early presence in a market. Those can’t be too hard to separate experimentally?

Matt Weiner April 23, 2009 at 11:36 am

I’ll add to the other commenters about the prominence of the Heinz brand in Pittsburgh. One way to think of it is that Heinz gets a lot of advertising in Pittsburgh that it doesn’t anywhere else — anytime anyone hears the name of the football stadium or the history museum or any of a bunch of other things, they hear the name “Heinz.” Plus there’s hometown loyalty.

The results about cities close to the city of origin, but not identical with it, might be more illuminating. Cleveland has no reason to love the Heinz name — is Heinz ketchup relatively more popular there?

meter April 23, 2009 at 1:41 pm

Do Pittsburghers use Heinz mustard over other mustards?

Having grown up on Heinz ketchup but French’s and Gulden’s mustards, I see yellow Heinz bottles and my mind can’t process it.

Tom April 25, 2009 at 4:22 pm

I think of “Heinz” as relating to “ketchup” in the way “Kleenex” relates to facial tissues, only more-so in that the quality advantage of Heinz ketchup over competitors is greater than the Kleenex advantage for paper goods. I know we occasionally used Hunt’s or DelMonte ketchup or “catsup”(uugggh!) when I was a kid, but after a certain point you decide any cost savings is not worth the sacrifice in flavor/quality (unless you consume some astronomical amount of ketchup). Speaking of which, I wonder if the study separated retail from commercial sales. I would imagine a local company of longstanding may have more of a lock on nearby business customers, and may be able to offer more favorable prices than to commercial users some distance away; otherwise those commercial users (due to the volume issue) may be more receptive to using cheaper alternate brands.

SCEPTRE Laptop Battery May 18, 2009 at 10:15 am

Isn’t this just a nondurable goods version of the home-country bias in finance? Of course, that doesn’t answer the question, but it does suggest that perhaps we generally prefer the local to the foreign.

となり日本を沸 March 10, 2010 at 11:26 am

lxq
どのジャージにおいても、タテに走るネイビー色のラインは生地に直接染めてありますNIKE ジャージ。
レプリカジャージはナイロンメッシュ生地です。NIKE ジャージほぼ同じ倍率にも関わらず、メッシュ穴の大きさが他の2つに比べて、小さく非常にきめ細かに入っていることがわかります。またナイロン独特のテカつきがあるのも特徴ですNIKE ジャージ。
一方、スウィングマンジャージはポリエステルメッシュ生地で出来ていますNFLジャージ。レプリカジャージよりもメッシュ穴が大きく、目を凝らすと生地の織り目まで見えます。オーセンティックジャージ(≒実使用)にも同じ生地素材を採用してい用いるチームが多いため、より選手が着用する実使用の物に近い仕様になっております。また、手触りはレプリカジャージと異なり、reebok ジャージザラザラしているのも特徴です。
オーセンティックジャージは、reebok ジャージ同じチームでもホーム・アウェイ・3rd(現オルタネート)の種類ごとに生地の素材が異なる場合が多く、レイカーズ ジャージ今回は偶然にも、スウィングマンジャージの生地素材と同じでした。見た目はほとんど変わりませんが、オーセンティックジャージの方がメッシュ穴がきめ細かに入っています。また、触った感じではオーセンティックジャージの方が厚手に感じられます。

Matt January 3, 2011 at 9:24 am

I live in Leamington. It’s the most southern point of Canada, but is also the Tomato Capital of Canada. Heinz has a very large factory in Leamington, and the company supports hundreds of jobs.

In our town, Heinz isn’t just a company. It’s a brand. It’s a household name. No other ketchup compares. I’ve talked to numerous people across the country, and they can’t eat any other ketchup. Some people will actually not put ketchup on their burger because of the brand of ketchup (or lack thereof).

Craig White January 3, 2011 at 12:38 pm

In my opinion its a two fold subject. It is in the the branding and in the flavor. My mother bought Heinz, thats all I ever used when I was growing up and still today. My wife is from the west coast and she grew up with Hunts catsup. My wife is a very accomplished cook so I have developed a keen sense of taste. The branding made Heinz the brand of choice and your pallet. Therefore nothing taste as good. My wife now uses Heinz

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