Skip navigation

TIME FOR TOMATOES

For years, the reddest thing consumers found in the supermarket's tomato section in the dead of winter was the face of a produce department manager embarrassed by the sorry state of selection.No longer. Thanks to increased availability of greenhouse-grown and imported products, and vastly improved handling of traditional field-grown fruit, the tomato display in the average supermarket is a lot redder,

For years, the reddest thing consumers found in the supermarket's tomato section in the dead of winter was the face of a produce department manager embarrassed by the sorry state of selection.

No longer. Thanks to increased availability of greenhouse-grown and imported products, and vastly improved handling of traditional field-grown fruit, the tomato display in the average supermarket is a lot redder, not to mention more edible, for extended periods of the year.

But that's not all the news for a category that historically has been one of the produce department's underachievers. Even more striking is the sheer number of distinctly different tomatoes consumers have to choose from today - multiple varieties and types in a vast array of sizes, shapes, colors and packaging.

"It's the most unbelievable category I've ever seen in my life," said Stan Steppa, president of Magruder's, a chain of four stores in the Washington area. "It used to be that all we'd carry were a 4-by-5 slicing tomato, a cherry tomato and an Italian [roma] tomato. Now, it's 20 or 30 different items -- red vine cluster tomatoes in a bag, grape tomatoes, yellow tomatoes, beefsteak tomatoes, cherry tomatoes, you name it. The category just keeps growing and we keep pushing other things out of the way in the department so we can put more tomatoes in."

While they've always been a mainstay of the produce department, tomatoes have surged in importance in recent years due to greatly improved selection and eating quality. Increased availability and affordability of ripe, attractive, ready-to-eat greenhouse tomatoes, combined with steady advances in ripening, distribution and supply-chain handling of field-grown mature-green and vine-ripened tomatoes have helped the category realize more of its potential.

Those advances have helped tomatoes solidify their position as a produce department sales leader. The Florida Tomato Committee, which represents the Florida tomato industry, said tomatoes account for about 7% of store produce department sales nationally, while the California Tomato Commission places the figure at closer to 9%, up from 7.4% in 2001 and 6.5% in 2000.

While continued growth is likely, retailers who want to maximize it will be confronted with the tough task of sorting through a growing list of product options in the category. Designing the right mix that appeals to shoppers and delivers the highest profitability will be a critical task for retailers who once enjoyed far fewer options.

According to recent market research by Eurofresh Farms, a Willcox, Ariz.-based greenhouse tomato producer, retailers have benefited from the explosion of variety in the tomato category. Fried De Schouwer, the company's director of sales and marketing, said retailers are succeeding in moving tomatoes more toward the center of gravity in the produce department.

"By adding variety to the point where the average number of [stockkeeping units] at any one time is between 10 and 16, retailers are making tomatoes a destination category in produce," he said. "Tomatoes are now the top contributor to sales in the department, and while field-grown tomatoes still are the biggest component of the selection, the greenhouse contribution has grown 60% over the last three years. And, while variety has been a key element of that growth, having more fruit that is ripe, ready to eat, firm, fresh and colorful has been the biggest contributor."

Another outgrowth of the surge in variety and quality has been the retailer's ability to offer more tiered pricing on tomatoes, thereby setting up a clear choice for both consumers willing to pay more for superior products and those who want a value-priced product.

"With so much variety, the ability to add value is there, and there's now a better reference point for pricing," he said. "Retailers can now offer tomatoes at the high end for $3.99 a pound and at the low end for 99 cents a pound. And overall, the expanded variety has increased the average price of tomatoes. It's been like bringing a Cadillac into a Chevy dealership; it's raised the bar on overall quality."

So how are all these fundamental changes in the tomato category playing out in the supermarket produce department? Increasingly, the average produce department's tomato showroom is being designed to offer just the right amount of variety, based on such factors as store size, shopper demographics and market competition. The latter is becoming more important, De Schouwer said, as supermarkets seek ways to stand out from Wal-Mart-style merchants who often sacrifice selection for lower prices.

At a Western Supermarkets store in Mountain Brook, Ala., produce manager Steve Husarik has limited space to work with but still has managed to build a vibrant tomato display. Increasingly, it's anchored by greenhouse-grown product, some of it from a local operation that sets itself apart by producing tomatoes in soil rather than the typical greenhouse's hydroponics method of cultivation.

"The popularity of the field-grown tomato has gone down, as has the demand for cherry tomatoes," Husarik said. "But grape tomatoes have taken a huge share because they always taste good, even when others taste like cardboard. I'm probably selling 25 to 30 cases a week of them now. Sales of cluster [on-the-vine] tomatoes also have grown. Overall, tomatoes are probably contributing about 5% to department sales."

The soil-grown greenhouse tomatoes from the local vendor, Trussville, Ala.-based Blackjack Gardens, have helped spark customer interest in the category. Heavy in-store promotion of the product as being not only "homegrown," but superior in flavor to traditional hothouse tomatoes has helped Husarik boost tomato sales and rely less on other hydroponic suppliers.

Despite the increasing contribution of greenhouse products, field-grown tomatoes, particularly "homegrown" versions, account for a fair share of the average department's selection. Magruder's Steppa, for instance, said locally grown product purchased in 50-pound bushels is still an important part of the summer tomato selection. And, at Duthler's Family Foods, a Grand Rapids, Mich.-based chain, shoppers, many of whom are Hispanic, are still a little leery of greenhouse tomatoes.

"We carry some greenhouse product and occasionally put it on ad, but a lot of people still turn their nose up at it," said assistant store manager Tom Nicholas. "Part of that may be that it's priced about 30% higher. But a lot of our customers still don't understand that it's often a better product than what's shipped in from Mexico or Florida. Even with signage, many people still don't understand greenhouse tomatoes."

While greenhouse tomatoes may be a smaller percentage of tomato sales at Duthler's, which operates four stores, sales of other types, such as romas, are probably higher than average.

"With the growth of our Hispanic customers, who use tomatoes more in cooking and preparation of things like salsa, sales of romas, which are meatier and less juicy, have taken off."

Still, Nicholas said the stores have been selling more packaged grape and cluster tomatoes, which have stolen some sales from traditional cherry tomatoes. Packaging, however, is still generally taboo because Hispanic customers have shown their preference for large bulk tomato offerings.

For field-grown suppliers, the growth of the Hispanic market in the United States, and Hispanics' interest in more traditional tomato offerings, may be a source of hope in the face of growing demand for greenhouse products. Carolyn Hughes, vice president of marketing for the California Tomato Commission, cited a recent Southern California study showing Hispanic consumers prefer field-grown round and roma tomatoes because of their texture, size and color characteristics. And the Florida Tomato Committee cited statistics from The Perishables Group, a Chicago-based retail produce consulting firm, that round field tomatoes still account for a leading 32% of total category volume and 27% of gross profit.

Clearly, though, much of the excitement in the category is still likely to originate in the greenhouse sector, where quality can be more tightly controlled. Dawn E. Gray, vice president of marketing for B.C. Hot House Foods, a leading Canadian greenhouse tomato supplier, said heirloom varieties are the next big thing on the company's drawing board.

"We'll have five or six varieties to start with, and we may be able to come to market with a pack that contains a sampling of the varieties," she said. "Our job is to find the next hot thing in the tomato category, much like the tomato-on-the vine product that was once a specialty item but is now almost a commodity. We want to be generating 30% of our sales in the future on varieties not yet identified."

For all its recent growth, some issues still dog the category. Handling and distribution, while vastly improved in recent years, still are a source of concern for the industry. Retailers and their suppliers need to stay focused on bringing the highest quality product to consumers, said Bruce Axtman, president of The Perishables Group.

"Consistent quality is still the main challenge, even with greenhouse product," he said. "There are still issues relating to length of time in the distribution system and refrigeration, both of which can have a major negative impact on quality. The key for retailers has been to get supplier parties involved in these issues as far down the supply chain as possible, and the trend has been to move away from repackers and toward direct relationships with key suppliers."

With that in mind, supplier groups like the Florida Tomato Committee are focusing even more effort on communicating with retailers.

"The theme this year is all about education," said Samantha Winters, director of education and promotion. "Based on consumer research, in-store testing, scan data and feedback from retailers, we've developed a strategy to maximize round tomatoes' presence in the category and provide improvement to the tomato category as a whole."

EXPERTS OFFER TOMATO MERCHANDISING TIPS

Greatly expanded variety in the tomato category has made this produce department staple even more versatile.

According to the Florida Tomato Committee's retail marketing guide, 97% of consumers use tomatoes regularly in meals, 65% use them in recipes and 35% purchase them for snacking.

That versatility opens the door to new avenues of creative merchandising. Industry experts offered a few suggestions:

Group them on a use basis. Fried De Schouwer, director of sales and marketing with greenhouse tomato supplier Eurofresh Farms, said he recently observed a display in a Belgian supermarket in which tomatoes were grouped by their utility. "The key was enabling the consumer to walk into the store and make a purchasing decision based on how they wanted to use the tomato," he said. "They had them grouped into categories like stewing, pasta, snack and salad-type tomatoes. Pricing was secondary."

Position for convenience. As smaller, more flavorful greenhouse-grown tomatoes come on the market in different sizes, colors, sweetness levels and packages, some point to an opportunity to merchandise them as convenience snack items. Bruce Axtman, president of The Perishables Group, a Chicago-based retail consulting firm, said more innovative packaging may offer a way to position them as healthy, on-the-go snacks. Dawn Gray, vice president of marketing for B.C. Hot House Foods, said a new mini-plum offering is on the drawing board. "We're trying to develop more products that pass the dashboard-dining test," she said.

Take advantage of cross merchandising. As a wider variety of tomatoes become more ready-to-eat and prepare, opportunities to make tomatoes a component of a meal solution increase. De Schouwer said displaying virgin olive oil and mozzarella next to a red, ripe tomato is an example of the kind of suggestive selling that can boost sales of tomatoes and non-produce items. Merchandising tomatoes outside the produce department also helps reinforce the message that tomatoes shouldn't be refrigerated.

Despite their versatility, tomatoes aren't likely to show up in fresh-cut form anytime soon, if ever. Efforts to develop a fresh-cut product have been hindered by the fact they don't maintain their structural integrity when cut. In addition, they don't do well under refrigeration, and that has prevented them from being added to products like fresh-cut salads. With a proliferation of bite-size tomatoes, though, demand for a fresh-cut product could be moot.