Because the price of corn is going up (it's about 40% higher than last year--thanks ethanol!), Heinz is finding itself spending millions more on the high fructose corn syrup it uses to sweeten its signature Heinz ketchup. Rather than try to find a way to source cheaper corn or modify the recipe, Heinz responded by developing a sweeter breed of tomato. According to the WSJ, this tomato hybrid (non-GMO) is 5-10% sweeter than the tomatoes they currently use. Heinz, unlike most food producers, breeds its own tomato crop varieties and then has its contract growers use the Heinz plants. Farmers are restricted from selling the Heinz proprietary tomato to other manufacturers. The new, sweeter tomato is still in the Heinz testing fields in California, but is likely to make an appearance in 57 bottles in the next year or two. Meanwhile, the Heinz-employed seed researchers (the company increased the research budget by 40% in the last three years) are working at another hybrid that will be even sweeter than this one.

By being proactive rather than reactive in its thinking the company stands to save millions--and will distance itself from ketchup competitors who will be stuck paying higher prices for ingredients.