There’s a joke from the classic cult film Pulp Fiction: “Three tomatoes are walking down the street – a papa tomato, a mama tomato, and a little baby tomato. Baby tomato starts lagging behind. Papa tomato gets angry, goes back to the baby tomato, and squishes him…and says, ketchup.”
It’s the champion of condiments, and Dolly’s ketchup evokes nostalgic memories among some Lebanese. Through casual conversations with Executive, they talked of blissful summers past eating hotdogs and homestyle french fries drenched in ketchup piled high atop a red checkered picnic table on a sunny, cloud-free day near the coast. These are wistful Americana summers to remember.
Ketchup does not easily mix with traditional Lebanese cuisine. It is a rare sight to find a bottle of that fine red sauce served with mezze, unless there are also french fries on the table. So it is not wrong to perceive ketchup as uniquely American (even though it isn’t) and boy do the Lebanese seem to love all products red, white and blue.
Dolly’s ketchup too, according to the company’s regional brand manager Saaddine Abou Merhi, is perceived as an American brand. “There is no perception of the brand as a Lebanese one – it’s an American brand with a Lebanese taste. Most of our new customers think Dolly’s is American more than it is Lebanese – because of the name.”
It wasn’t exactly the image the company’s founders were going for but the brand does have strong ties that foster this American perception. For one, Dolly’s ketchup is registered as a trademark in the United States. Moreover, to achieve the desired taste its main ingredient – fresh tomatoes – are an American product. “To get the exact taste we have to import from California and work with a specific farm to source the tomatoes.” Abou Merhi also says Californian tomatoes provide a consistency in quality that defines their ketchup’s texture. Other ingredients such as salt and vinegar are also imported, with water being the only ingredient sourced locally. The taste of Dolly’s ketchup, Abou Merhi suggests, is preferred because of the high level of sweetness, with the precise formula being a closely guarded secret known only to a precious few.
Widriss Holding – the group owning Dolly’s and other local brands, like Idriss Supermarket and Conserves Modernes Chtaura, a cannery – is 80 years old and Dolly’s is nearly 42. Dolly’s started as a ketchup company and has evolved into a condiment brand producing mayonnaise, mustard, pizza and spaghetti sauces, as well as canned corn and canned mushrooms.
Their flagship product remains ketchup, which Abou Merhi says leads the brand’s sales by volume. Mayonnaise leads in sales when measured by value. “Ketchup is the backbone of the company. Mayonnaise is more profitable for the business – it’s mainly oil with egg yolk – but when the prices of oil fluctuate there can be a shift. And there are only two brands in the market that [dominate] in mayonnaise, Dolly’s and Lessieur.” Profit margins tend to be more robust due to the company’s share of the mayonnaise market.
The ketchup market, he says, is more diverse and Dolly’s must compete with Libby’s and Xtra, both owned by Interbrand, Heinz, and producers like Yamama and Maxim’s that have a smaller share of the ketchup market. It is a saturated market, he says, and profit margins for ketchup are driven through bulk sales. To this end, Dolly’s can rely in part on its sister company, Idriss Supermarket, to sell ketchup. The company also has agreements with a number of restaurants to exclusively serve Dolly’s condiments, though Abou Merhi did not give specifics.
Dolly’s, as well as many of the brand’s competitors, passed through a difficult period during Lebanon’s civil war. The war split the country – barriers and checkpoints were erected and no-go zones physically inhibited Dolly’s distribution to areas like the Metn and Keserwan, Abou Merhi explains. De facto distribution monopolies were established, the extent of which can be seen to this day. “Brands established themselves as per the war zones. We have distribution in those areas now, but people prefer their brand because it became like second nature to grab it from the shelf. For us it’s the same – if you go to the south, it’s all Dolly’s, there’s no competition there.”
Syria’s civil war has drastically reduced Dolly’s operations inside Syria. “We had a partner producing Dolly’s brand products and selling them within Syria.” Abou Merhi admits that the Syrian factory now has very minimal production with output at only a fraction of what was produced before the war began. “The factory is there and the machinery is there. If there is a market they will produce more – [but because of the war] the market is now limited to 5 percent. The problem is they cannot sell to Aleppo, Homs, anywhere except for parts of Damascus.”
Syria’s upheaval has also rendered all land transit routes through the country to nearby foreign markets, like Jordan, unusable. “We used Syria as a transit route and what’s happening there has really affected us. We used to ship two trucks per month to Jordan costing some $800 from Beirut to Amman – taking maybe one day. By ship it takes around 12 days and costs maybe 15 percent more.” Abou Merhi also says containers sent by truck have more capacity – they’re 26 feet in length compared to sea containers that are only 20. “You can ship a truck for less cost with more goods, so the cost per product unit was less,” he explains. On top of that he says the market in Jordan has been negatively affected by the region’s instability. “They like ketchup in Jordan but what’s happening in Syria affects the whole region,” and is lowering demand in neighboring countries.
Exporting to Gulf countries, meanwhile, remains a challenge for Dolly’s. “We used to have a presence in Saudi Arabia and the UAE, but now cannot compete in those markets with local producers that receive support from their own governments,” Abou Merhi says, pointing out that production of ketchup in the kingdom is $2 less per box of 24 bottles than Dolly’s.
This disparity he says is derived primarily from the high cost of shipping from Lebanon. Sending a full container by truck from the Dolly’s factory, located in Choueifat, to the Beirut port can cost up to $300. For factories further away from the port, like Dolly’s sister company Conserves Modernes Chtaura, internal shipping can reach as high as $700 per container. Once at the port, Abou Merhi says, additional shipping expenses are incurred. Moving the container from the trucks onto the ships incurs an additional expense of $500. The resulting cost of exporting by sea ranks Lebanon amongst the most expensive in the world, according to Abou Merhi.
As a whole, Abou Merhi says that Dolly’s exports more ketchup both by volume and value than it sells in the Lebanese market, and he says sales in the West African market – Nigeria, Togo, and Mali, to name a few – are strong. With no end in sight for Syria’s civil war and an impotent Lebanese government, the brand will continue to look to the African market as a driver of potential new business.