Red Gold® CAN Help You Save Money In Months Ahead

Red Gold® began its business 80 years ago by picking and processing tomatoes, then packaging them into cans. It is still the perfect packaging for preserving fruits, vegetables and tomatoes, picked fresh from the field with unmatched shelf life today.

Unfortunately, market forces are poised for a significant increase to the price of steel cans. Red Gold wants to help you understand the market forces impacting pricing and offer a head start on some money-saving options.

The cost of steel cans remained relatively stable for many years, but as consumers began their movement away from canned foods to fresh, the interest in producing cans for the food industry by steel suppliers to can manufacturers began to wane. Today, domestic steel suppliers have cut production of a raw product essential to food can manufacturers, called “tinplate steel”, to only 2% of their overall production capabilities.

When the COVID pandemic hit the U.S., consumers quickly shifted their buying habits from fresh to canned foods because of their shelf stability to load their pantries. In only a few months, the demand for canned foods at supermarkets jumped by nearly 13%. The dramatic shift left the inventory of tinplate steel available for can production extremely low.

The Federal government’s tariffs and quotas designed to build domestic tinplate steel production before the pandemic has stymied tinplate imports. Bottomline, the supply of tinplate steel for 2022 is only 60% of projected demand, causing the greatest inflation in can prices in history. For example, in September 2019 and 2020, a ton of tinplate destined for can manufacturers was $560. In September 2021, the price increased to $1,940*.

At a supermarket, 41% of the cost of a 15 oz. can of corn is the can itself. Only 22% is in the corn and 14% is in the labor to get it in the can!

At the supermarket, 41% of the costs of a 15 oz. can of corn is the can itself. Only 22% is in the corn and 14% is in the labor to get it into the can**!

Red Gold’s existing can inventory, and our existing contracts will maintain current pricing through January 2022. As the largest privately held tomato company in the world, Red Gold’s buying power has reduced some of the impact of astronomic price increases due to can price inflation. However, new contracts for metal cans will require a significant price increase effective February 1, 2022.

Red Gold has secured enough can inventories for both Retail and Foodservice. Red Gold will be able to sustain its service level of 99% Order Fill Rate for both Channels. However, here are some tips for saving money as a Foodservice Operator in 2022 by shifting your purchases to alternative packaging:

• Consider switching #10 can Ketchup to pouch and plastic packaging – Shift your packaging choice from metal cans to pouches or plastic packaging, which is projected to increase only a minimal amount on February 1, 2022. (See equivalency chart below for conversion to other packaging of Red Gold ketchup).

• If you desire fresh-packed Peeled Tomatoes, buy NOW! – We had a great growing season in 2021, and the harvest is complete. Canned Peeled Products (such as Diced, Stewed, and Whole Tomatoes) under previous can contracts are now inventoried and available at 2021 pricing through June 25, 2022. Next year’s harvest, we will need to utilize the higher cost cans.

• Red Gold Fully Prepared Marinara sauce is available in pouches. You may wish to switch to pouches to avoid price increases on February 1, 2022 on #10 cans.

• For dine-in customers, consider a shift from Ketchup packets or dipping cups back to 14 oz. or 20 oz. plastic bottles of Red Gold Folds of Honor Ketchup or ramekins filled by Red Gold’s 3-gallon Bag-in-Box ketchup or 114 oz. Jugs (packed with a pump in the case). Remember, one ramekin containing 1.5 ounces of ketchup is equal to five ketchup packets.

• Red Gold now offers Mustard in a 13 oz. plastic bottle, and in a 105 oz. Jug (packed with a pump in every case).

Transparency in pricing is part or our commitment to our foodservice operators. Our mission is to provide you with the freshest, best tasting tomatoes in the world, no matter the package. Take advantage of these insights and begin the conversion to plastic and pouch packaging before our price increase—to maintain your food costs in the new year.

*CRU Group, 2021

**Can Manufacturers Institute