Payments Innovation’s ‘Ketchup Test’

The curse of the “Uninnovatable Product:” that rare instance of a product that simply cannot be improved with innovation because there’s nothing to improve. It’s its own apotheosis and any change is probably a bad idea, even though it seems counterintuitive that in a world drunk on technology and innovation that anything cannot be improved if sufficiently talented people set their minds to it.

Which brings us to ketchup.

Seriously.

And you don’t have to take our word for it, because this idea actually comes via Malcolm Gladwell and a 2004 article that ran in The New Yorker titled “The Ketchup Conundrum.” In that article, Gladwell boils down a pretty simple idea: Mess around with mustard to your heart’s content, but Heinz 57 is magic in a bottle and no one anywhere wants to eat a different version of it.

“In the gourmet-ketchup world, there is River Run and Uncle Dave’s, from Vermont, and Muir Glen Organic and Mrs. Tomato Head Roasted Garlic Peppercorn Catsup, in California, and dozens of others— and every year Heinz’s overwhelming share of the ketchup market just grows,” Gladwell noted.

And it isn’t just some sort of mental fondness for the ketchup of our childhood. Study after study and in blind taste test after blind taste test, people prefer Heinz, even when they conceded they liked the way the other stuff tasted. Gourmet palates, able to break down all the individual style notes in the bottle of the Heinz ketchup and the gourmet products and definitively state the superior product base in the gourmet, still prefer Heinz because “it’s what tasted correct.”

Plus, the world’s largest open-air laboratory — the Internet — is literally full of people bemoaning the plague of artisanal ketchup in their life.

One writer for GrubStreet even told the tale of her new favorite burger joint and the ketchup drama that she faced.

“The ketchup arrives in a small nondescript ceramic cup, with the fries. Is it Heinz? No, it’s darker than it should be, and not nearly smooth enough. There’s too much spice, not enough sweetness. It is fancy-ass ketchup, and all it does is make you wonder why you can’t just have Heinz,” Sierra Tishgart wrote.

Another artisanal ketchup reviewer on Thrillist was a bit more pointed in his remarks in his article “Please Stop Trying To Serve Me House-Made Organic Ketchup.”

“This is hazardous, to all of us. When I order my burger, I’m picturing the Heinz I’m going to bathe it in,” Ben Robinson wrote. “That very specific, very expected flavor element is part of why I ordered the burger in the first place — it’s just part of the deal. Ketchup should be a constant, not a variable. I’ve literally stopped going to multiple restaurants that plate truly delicious burgers, solely because they only served their own, wretchedly try-hard stuff.”

These people are not kidding around about ketchup, nor are the Reddit pages about it, the nearly infinite number of tweets about it or the novella’s worth of other articles on the artisanal ketchup we didn’t quote. What we couldn’t find for this article was a single person who would admit to liking artisanal ketchup (who didn’t work for an artisanal ketchup-maker).

How strongly they felt about it varied. Some were pretty neutral or negative while others actually used the words “unholy” and “abomination.”

So The Moral Of This Story For Payments and Commerce Players?

Well, there is the obvious: If you own a restaurant, do not make or serve your own ketchup. No matter how good you think it is, don’t do it, no one likes it. Really. Stick with Heinz.

But the broader lesson is about innovation — and its limits.

Ketchup is an unlikely product to have accidentally hit perfection. There are not many things that got their start in the 19th century that remain in the market in mostly the same form they entered it some 300 years hence.

Despite the fact that most chefs deep down believe that they could do it better — even if they are too practical to try.

“I’d like to think, that as a professional, if someone said, ‘Make me a ketchup that tastes better than Heinz,’ I could do that,” chef Wylie Dufresne noted. “But that doesn’t mean it would be commercially successful. You’re fighting a Goliath. You can’t give people homemade ketchup.

“They don’t want it.”

As good old ketchup proves, there are some products that can’t be disrupted because all the innovation in the world can’t improve it.

Which brings us to payments, sort of.

There’s a lot about payments that is ripe for disruption and innovation. And lots and lots of innovators who are making it their life’s mission to be the innovation of all innovations that change how and why payments happens.

Sometimes those innovations are amazing useful: electronic point of sale terminals, fraud detection, online and mobile banking, ATMs, and debit cards. And sometimes those innovations, like fancy ketchup, may look different, even taste good but aren’t quite good enough to cause people to ditch the basic staple of payments: the plastic card.

At least for right now.

Which is not to say that innovation in payments is impossible. Ketchup by itself has proven to be the “uninnovatable” product, but ketchup is not the only condiment that people use to season their food. We live in a world awash in pesto mayonnaise, aioli and a variety of fancy mustards. Innovating food seasonings and complements doesn’t have to be limited to fixing ketchup — but getting people to switch from it to something entirely different that makes their food taste better and different.

Similarly, in payments, just innovating the payment probably isn’t enough, because the ketchup of payments – the plastic card — is doing just fine even if consumers have to get used to dipping instead of swiping. Trying to fancify the ketchup seems futile. Now, getting consumers to ditch ketchup for something else is where the action is, and ultimately, success.

When thinking about your 2016 payments and commerce strategies these next few weeks, it might be wise to make sure that they first pass the “ketchup test.”