New varieties and the shift to more greenhouse production are giving a boost to the category.
By Nora Caley
It has been a tough couple of years for tomatoes, but industry experts say these plump red beauties are poised for a comeback.
Mark Munger, vice president of marketing for San Diego-based Andrew & Williamson Fresh Produce, says the category is a pyramid. “The more commodity-oriented types are the Roma or small rounds,” he says. “Then you go up a level and you get tomatoes on the vine, which are a more premium category. Then you go up to the top and you have specialty like Compari and Romanitas, which command a higher price per pound.”
According to the Chicago-based Perishables Group, sales of tomatoes in the U.S. grocery channel totaled $1.65 billion for the 52 weeks ended Oct. 31. That’s a decrease of 7.3% compared to the same period the previous year, when sales totaled $1.78 billion. The data represents 13,000 traditional supermarkets, excluding Wal-Mart and other alternative channels.
All the subcategories saw decreases in sales. Hothouse on-the-vine tomatoes, with a 30% share of dollar sales, decreased 9.3%, from $540.7 million to $490.7 million. Snacking tomatoes, which have a 25% share, saw the smallest decrease, from $451.8 million to $437.8 million, or 3.1%. Roma tomatoes, which are just under 14% of the category, decreased 8.3%, from $248.3 million to $227.7 million.
In addition to the economy, the tomato category suffered due to a food safety scare. In June 2008, after a several-state outbreak of salmonella, the U.S. Food and Drug Administration (FDA) suggested the illnesses were linked to raw red plum, red Roma and round red tomatoes. In August, the FDA lifted its warning and reported that the fresh tomatoes available in the domestic market were not associated with the outbreak.
“It was a dark cloud and it was never substantiated and it caused a lot of confusion among consumers,” says Mark Cassius, vice president of sales for Euro Fresh Farms in Wilcox, Ariz. “I believe that’s behind us.”
Cassius says that the category is gaining strength as producers come up with new varieties. “What we are seeing is a trend shifting from field tomatoes into more greenhouse options because greenhouse offers cocktail, vine and snacking grape tomatoes year round,” he says. “Consumers like the multi-sensory experience of tomatoes on the vine. “There’s a romantic allure because you can smell the vine and look at the tomatoes and it’s fresh.”
Chris Veillon, marketing manager for Mastronardi Produce, based in Kingsville, Ontario, Canada, says consumers want to see something new in the tomato section. “The category is expanding,” he says. “We test 200 varieties a year.” The company sells Campari, Splendido, Champagne, One Sweet and other tomatoes under the Sunset Produce brand.
Shoppers also want to know their tomatoes are safe and greenhouse companies such as Mastronardi are happy to educate consumers about how their operations keep the produce safe. Animals cannot walk through a greenhouse the way they can an open field, so bacteria associated with animal waste won’t get into the greenhouse. Also, Mastronardi uses systems that use the Safe Quality Food standard and has traceability programs.
“Food safety is always a concern across all aspects, from growing to handling to delivery,” Veillon says. “Consumers are very savvy now after the salmonella outbreak. They want to know the country of origin, how the produce is grown and what methods they use to eliminate pests.”
Other companies are also working on food safety techniques. “When you look at the food safety scenario, you talk about good manufacturing practices, traceability programs with PLU stickers and GS1 labeling, case coding, all those things we do,” says Javier “JJ” Badillo, director of diversified products for Calavo Growers Inc., based in Santa Paula, Calif. “There is an awful lot of work we put in that program to ensure things are good. That’s one piece that continues to expand inside the tomato category and the produce industry.”
To help educate consumers about the different varieties, Mastronardi developed a program called the Sweet-o-Meter, which shows the sweetness, or Brix level, of each type of tomato. Shoppers can look at the display and figure out which tomato will serve their needs for their upcoming meal. “Ten years ago a tomato was a tomato and you cut it up put it in a salad,” Veillon says. “Now it’s a new experience, supported by strong brands.” Also, Sunset packaging directs consumers to the Sunset website, which features recipes from Seattle celebrity chef Kathy Casey.
Munger says the best merchandising is a tomato table that displays all the varieties in one place. The value tomatoes can take the low section and the premium tomatoes are at eye level. Color breaks such as tomatoes on the vine or even avocados can help make the display visually appealing. Cross merchandising, such as displaying tomatoes next to the bags of salads, could help as well.
Cassius says Euro Fresh conducts much market research. “We find that 60% to 70% of consumers who go into the store have tomatoes on their list but they’re not sure what tomato they’re going to buy,” he says.
Euro Fresh includes serving suggestions on the packaging. The Roma tomatoes are for cooking, grape tomatoes are for snacking and Comparis can be included in shish kabobs, are some examples.
Euro Fresh also works with retailers to develop signage and promotional activity. “We try and put together meals, such as build a better salad or put together the ultimate burger,” he says. “Meal solutions are gaining traction.”
The company also promotes Mimi Candy tomatoes as a snacking solution for kids. Those small tomatoes are part of the grape subcategory. “You don’t have to cut them. You just rinse and pack them in their lunch.”
Euro Fresh also uses Twitter and Facebook to send out news and recipes. One recent Tweet was, “What are you having for lunch today? How about a great BLT sandwich with SUNSET vine ripe tomatoes.”
The industry experts are optimistic about the tomato category for 2010. Cassius puts it this way. “Consumers are demanding a safe flavorful product. People are eating healthier. I believe retailers are focusing on perishables, particularly produce, and I think there are some great opportunities to increase sales.”