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Ketchup, mustard and spice packets are selling like hotcakes

The pandemic has boosted demand for several products. Sales of...

Posted: Jul 1, 2020 3:47 PM

The pandemic has boosted demand for several products. Sales of toilet paper, hand sanitizer and canned goods all grew dramatically in the early days of the crisis.

Another pandemic best-seller? Ketchup packets. And salt packets. And even single-serve pizza seasoning.

When restaurants shut their dining room doors this spring in accordance with stay-at-home orders designed to help curb the spread of Covid-19, they quickly pivoted to delivery and pickup orders that often come with single-serve condiments. Now, as they start to reopen their doors, many are being instructed to limit the use of shared condiments and spices. The two shifts mean that demand for individually-sized packages are way up, according to industry experts and sellers of those items.

Both packets and portion cups used to dole out condiments to individual customers "are seeing rapid gains so far in 2020," said Jennifer Mapes-Christ, consumer and commercial group leader for the Freedonia Group, a market research firm.

It's a trend that could have negative implications for the environment, warned Kate O'Neill, a professor in the department of environmental science, policy and management at UC Berkeley.

Paper salt and pepper packets aren't that bad, she told CNN Business. If they're only made of paper, consumers could empty them out and recycle them.

But the messier condiment packets, like single-serve ketchup and mustard, are basically impossible to recycle, she explained, because they are contaminated by food. If contaminated products are recycled along with clean ones, they can ruin the whole batch. And because these packets are flimsy and often made with mixed materials, like foil and plastic, recycling facilities won't find them valuable even when cleaned.

"It adds in to the huge volume of single-use disposable plastics that we're seeing in general," she said. Trash collectors have been overwhelmed by household waste in areas where stay-at-home orders were put in place.

"These packets will show up in the waste stream," O'Neill said.

'Tremendous growth'

US Foods, a food service distributor that works with about 300,000 restaurants and food service operators, has been "seeing tremendous growth" in single-serve salt, pepper, ketchup, mustard and hot sauce, said Jim Osborne, the company's senior vice president of customer strategy and innovation.

Since some restaurants started reopening in May, sales of single-serve condiments have increased up to 40% compared to last year, he said. The highest increases have been in condiments that restaurants would normally put on table tops. Osborne noted that US Foods sells biodegradable and compostable cups and lids, which the company recommends to businesses that want more sustainable options.

The CDC has issued some reopening "considerations" for bars and restaurants, which include avoiding the use of shared condiments in dining rooms and switching to single-serve condiment packets.

Beyond hygiene implications, the switch could make customers more comfortable. Tanya Spaulding, principal at Shea Inc., a full-service restaurant design firm based in Minneapolis, Minnesota, recently told CNN Business that to entice customers, restaurants should clear their tables of anything that could be seen as unhygienic.

"People don't want to pick up something and use something that someone else may have," she said.

Some restaurants needed more spice packets when they started selling more off-premise meals, which also contributed to the spike in demand.

Dan Scott, head of operations for FoodServiceDirect.com, an online food service provider that sells to restaurants, offices, ghost kitchens, schools and other places that sell food, started seeing orders spike in mid-March, when some states instructed restaurants to close their doors.

Since mid-March, there's "been a massive demand ... for individually packaged items of absolutely everything," he said. In the first half of the year, sales of single-serve condiments like mayo, ketchup and salad dressings grew by 300% compared to the same time last year, he noted.

Pizza Spice Packet, which sells individual packets of garlic powder, Parmesan cheese, red pepper and other pizza spices, has also seen a spike in demand.

"We've seen an incredible, significant increase in [business to business] sales due to the unprecedented demand in the single-serve condiment packets," said David New, the company's CEO. "We're just trying to keep up with demand," he added. "It's been a really crazy time for us."

He said the packets, which are not recyclable, are less wasteful than individual plastic cups for sauces and the company is working on a biodegradable version of its product.

The uptick could continue into the future.

McCormick & Company is planning to increase the amount of single-serve spices it makes in order to accommodate new restaurant guidelines.

"As many places will be moving away from tabletop condiments, we are pivoting to portion-controlled packaging for dining and carryout," said CEO Lawrence Kurzius during a recent analyst call discussing the company's second-quarter financial results. "We're also exploring other options to expand our portion-controlled offering further." McCormick's single-serve dip cups are recyclable, and its single-serve sachets will be fully recyclable by 2025, a company representative told CNN Business in an email.

"If there is a significant presence of virus in the US, single-serve packaging for condiments should pick up materially in the coming months," predicted David Driscoll, an analyst covering packaged food at DD Research.

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