You keep talking about the 'value' of products and what they're 'worth'.

Things are worth what people will pay for them. As nirvana pointed out, looking at only the marginal production cost of something is highly misleading. Heinz makes about 36% gross margins [1], which is certainly good, but it's not as if they're seeing the 'value' of that '10x' markup. And lest you think the rest of their cost is advertising to fool people into spending too much on ketchup, their total marketing (not just ads) budget is only a few hundred million[2] (at least as of 2006) vs total revenue of over $10B.

[1] http://ycharts.com/companies/HNZ/gross_profit_margin

[2] http://adage.com/article/news/heinz-ceo-boost-ad-spend-proxy...

  | Things are worth what people will pay for them.

If I pay $50 million for a forged Mona Lisa, does that mean that forgeries of the Mona Lisa are all worth $50 million?

It means, at the time you bought, you thought the painting was worth $50 million. Later, when you discover it's not, you'll be less likely to buy anything else from that art dealer. Same as anything else in life. People keep buying ketchup because ketchup remains valuable to them, even at $2 a bottle.

Of course not. Had you known it was a forgery, you wouldn't have spent $50 million. That would apply just as well to buying a bottle of Heinz ketchup tainted with rat poison.

But people know what's in Heinz. They know what it tastes like. They keep buying it at the price Heinz and their grocer charges.

In addition to the Heinz margins, most grocers rely on only 1% margins.

Heinz ketchup is worth it to me because it tastes like Heinz ketchup. They could sale the off brand for $0.01 and I still wouldn't buy it. I'm not going to go broke by buying a $3 bottle of ketchup that will last me months.

The other food that I will only buy one brand is Kraft Mac & Cheese. I know the stuff is nasty. I know it's bad for me. But, damn it that's what boxed Mac & Cheese is suppose to taste like.

Your complaint doesn't make any sense.

How much a person will pay for something determines its "value" to them. If a person will pay $10 for a bottle of ketchup, then it doesn't matter what the production cost was, the value they received was at least $10.

Well the alternative is to make it yourself. If there's no one else selling it for what you perceive the value to be, then you have to do it. The question is, how much will it cost you to make ketchup yourself, in both dollars and in time? And then ask yourself is it worth the time and money to make it yourself, or do you get more value from buying it at the store?

For 99% of consumers, $2 is a value because it's less expensive than making it themselves. It doesn't matter how much it cost Heinz to make.