Fresh Tomatoes: How Special Is The Price?
By Bob Johnson
There is tremendous variation in the prices within the fresh market tomato category.
“When it comes to tomatoes, many consumers will pay more for quality,” says Lucky Lee, vice president of sales for Lucky’s Real Tomatoes, Brooklyn, NY. “It’s not necessarily size or appearance, it’s a tomato that tastes like a tomato, and it costs more to achieve that goal. Continued increases in sales have shown that consumers will pay more to serve a great-tasting, healthier tomato to their families.”
The edge that makes a tomato worth more, sometimes substantially more, is flavor that is clearly better than the commodity product picked green and gassed to look ripe.
“Consumers want tomatoes that have flavor. This is the reason that we have focused on American field-grown, sun-ripened, flavorful tomatoes for more than three decades,” says Lee. “Consumers are spoiled by their local tomato crops and have set that flavor as the standard for what they expect great tomatoes to taste like. It’s no longer enough to produce a ‘pretty tomato;’ it must also have great flavor.”
Pricing strategy varies considerably depending on which group of consumers you are trying to entice.
“A price-conscious, value-driven consumer will steer toward the larger cluster, beefsteak and Roma tomatoes that provide the lowest price per pound; or if the price is right, snacking tomatoes,” says David Bell, chief marketing officer at Houweling’s Tomatoes, Delta, British Columbia. “A usage-driven consumer focuses on intended use. For example, beefsteak tomatoes for burgers, Roma tomatoes for cooking sauces, cocktail tomatoes that are easily quartered for salads. A gourmet consumer focuses on flavor profile and visual appearance, and will skew to higher-end products, including heirlooms, medleys and premium grape or cocktail tomatoes. A green consumer is environment focused, and will look at the origin and growing methodology, prefer locally grown and if not available, will then skew to organics.”
Bell figures the specialty tomatoes can consistently fetch as much as a 50 percent premium compared to the commodity varieties. “Price will always be a factor, and in the case of the value consumer, it is the primary driver,” says Bell. “The premium for specialty varieties within the snacking segment can be anywhere from 25 to 50 percent more than a value offering. There will always be a consumer price ceiling, but the comparatives on-shelf will affect that as will previous eating experience with one brand of products or another.”
The importance of price may vary among the different varieties within the specialty tomato category.
“When referring to bulk traditional tomato variety purchases, price has a great impact on sales,” says Dionysios Christou, vice president for marketing at Del Monte Fresh Produce Inc., Coral Gables, FL. “Price has less of an impact on grape tomato sales because they tend to be relatively price inelastic.”
There is, however, a small niche market of consumers willing and able to pay far more for out of the ordinary varieties grown in the West and flown fresh to shelves in upscale eastern produce departments.
“At retail you would pay in the $35 range for the organic baby heirloom,” says Peter Kroner, owner of Great Eastern Refrigerated Tru, New York, and representative for Eli & Ali. “The petit Romas are about the same. This time of year it’s hard to get continuous availability. You would find them at high-end independent retailers. They could also be at a Wegman’s-type store when the availability is there.”
A slightly lower, but still staggering price can be had for other fresh specialty tomatoes out of local season.
“Another specialty would be organic tomatoes on the vine, which could be in the neighborhood of $30 a pound,” says Kroner.
The heirloom varieties have become so popular, however, that some shippers are finding ways to make them relatively affordable.
“Our heirlooms are in a protective sock, and they usually retail between $2.99 and $3.99 a pound.” says Rick Feighery, vice president of Procacci Brothers in Philadelphia.
NatureSweet works to keep the per unit cost down by offering specialty tomatoes in a slightly larger pack. “Constellation is a 16.5-ounce package, and I’ve seen them from $4.99 to $5.99,” says Lori Castillo, brand manager for NatureSweet, San Antonio. “A big thing is the value our customers get because of the size of the pack, at 16.5-ounces instead of 10.5. They merchandise standing up.”
The rise of specialty tomatoes has, to an extent, made price just one of a number of factors driving sales.
“Price points are important, but not as important as it was when the category consisted of rounds, Romas and hothouse beefs,” says Mike Kemp, executive business development analyst at Market Fresh Produce, Nixa, MO. “Specialty tomatoes do command a premium; however, it’s hard to give you a finite number as to what that premium is. First and foremost, consumers choose for flavor; they are also looking for color variety, especially when cubing them for recipes.”