Leamington, a little town in the province of Ontario, is the tomato capital of Canada. The town earned that honor by farming vast acreages of tomatoes in fields and greenhouses. Their tomato expertise caught the attention of the H. J. Heinz Company who erected a factory in Leamington in 1908. And for more than 100 years, the factory pumped out Heinz Ketchup and a variety of baby foods to markets in Canada and the USA.
That tenure came to an end in 2014 when Heinz decided to mothball the factory and put 740 people out of work. Heinz, like so many other multinationals, gave the stereotypical corporate rationale — they said the plant was unprofitable and part of a global restructuring. You can imagine the emotional and economic impact on a community of only 28,000.
The Declining Sensitivity of Downsizing
Plant closings and corresponding job losses have become so prevalent that the public rarely bats an eye at the calamity. Displaced employees and their unions do little more than shrug their shoulders in submission. Late last year, Kraft Heinz announced it was closing 7 North American plants, and severing the heads of 2,600 people. This story was news for a day. That’s right, one day.
But, one little town wasn’t about to give in to the seemingly inevitable. Taking a lesson from the signature phrase in the illustrated children’s book, The Little Engine That Could, the Leamington community did not throw in the towel.
Like the struggling little train edging toward a daunting hill, plant workers, farmers, politicians and investors said, “We think we can. We think we can. We think we can. We know we can.”
After months of collective hard work by several stakeholders, a consortium of local investors, the government, the union and the farmers worked out a deal to keep the plant operating by securing a contract to co-pack several products for Heinz. This would save the jobs of 30% of the original workforce. Beyond that, the deal offered Highbury Canco, the new owners of the plant, the opportunity to expand their co-pack business that did not include tomato ketchup.
Then Along Came French’s
Today, tomatoes grown in Leamington are once again being used for ketchup. This is a result of a tomato paste supply arrangement between Highbury Canco and French’s, a company known for mustard but keen to make inroads in the ketchup business. With plant employment surpassing 400, and with French’s Ketchup finding its way to Canadian grocery shelves, ‘the little town that could’ appeared to be accelerating down the other side of that daunting hill.
But, all of a sudden, there was a detour on the track to recovery. Loblaws, Canada’s largest food retailer, announced that they were discontinuing French’s ketchup, claiming that the new brand’s sales weren’t cutting it. The truth of the matter was that French’s, though not outselling Heinz, was cannibalizing the sales of Loblaws’ private label, President’s Choice. Nonetheless, when a retailer with the size and clout of Loblaws makes a call like this, it is game-over for the supplier.
Little Guys Can Still Be Kings
However, an outraged customer of the French’s brand who knew the Leamington saga went to Facebook and posted his distaste for Loblaw’s decision. The post was shared by 133,000 other little guys who also saw red.
The media latched onto the story. An Ontario member of parliament presented a petition calling for French’s ketchup to be served in the dining room of the legislature, replacing the current Heinz brand. The pressure mounted and the grocery chain folded. French’s is back on Loblaws’ shelves.
The Leamington story demonstrates the power of the little guy in a world of corporate consolidation where big keeps getting bigger. Although conglomerate producers and retailers continue to thrive on clout, little guys, whether they be mom and pop merchants, farmers, manufacturers, or consumers can still be kings. To rise to the throne, all they need is the intestinal fortitude of the little town that could.