Originally printed in the April 2018 issue of Produce Business.
Their popularity is soaring, but simple ideas, big displays can be highly profitable.
There was a time when Americans wouldn’t touch a tomato, let alone eat one. For more than two centuries, this botanically classified fruit and legally termed vegetable, was thought to be poisonous. One reason is kinship in the potentially deadly nightshade family. Yet, the tomato has graced the tables of people in South America, Central America and Mexico since times B.C. In fact, the word tomato comes from the Aztec word, “tomatl.” Fast-forward to today, and tomatoes have made an about face in terms of popularity. In fact, tomatoes are second only to packaged salads in total vegetable sales, according to FreshFacts on Retail Year in Review 2017, published by the Washington, DC-headquartered United Fresh Produce Association. What’s more, tomatoes are the second-most consumed vegetable in the U.S. behind potatoes, based on the March 2017-released Tomatoes report, by the Ames, IA-located Agricultural Marketing Resource Center (AMRC).
“Tomatoes are a very significant category for us,” says Scot Olson, vice president of produce and floral for Grocery Outlet, Inc., a 270 privately owned discount supermarket chain based in Emeryville, CA, with locations in five Western states, plus Pennsylvania. “In 2017, tomatoes were the No. 6 category in dollar contributions, contributing 6 percent of total produce sales.”
Here are eight tips to sell more tomatoes:
1. Stock A Steady Supply
Florida and California are the largest tomato-growing states, accounting for up to three-fourths of all commercially produced fresh-market tomatoes in the U.S., based on AMRC data. Last fall, hurricanes and major storms significantly curtailed production of field-grown tomatoes in Florida and major importing countries such as Mexico, thus leading to price increases near historic levels, according to growers.
“Although weather has affected and will always continue to affect field-grown tomato supplies, we are seeing more and more overseas produce grown in hothouse facilities,” says Chuck Weisinger, chief executive officer of Weis-Buy Farms, in Fort Myers, FL. “This has made a difference in marketing because of the continuous supply of tomatoes available from these shippers. The retail buyer is looking for safety and price regularity through marketing at a stable price. More shippers are giving out contracts to a variety of customers through certain dates and guaranteeing pricing unless catastrophic conditions occur.”
Greenhouse growers are taking seasonality out of the tomato business. For example, Red Sun Farms, headquartered in Kingsville, ON, operates 10 facilities across Canada, the U.S. and Mexico that grow everything from tomatoes on the vine (TOVs), beefsteak, roma, grape and cherry to specialty tomatoes
“We pride ourselves in having quality produce all year long through our vertically integrated high-tech greenhouses,” says Jim DiMenna, president. “Our business model allows us to provide our customers with promotional support 365 days a year.”
2. Give Everyone Something
There are as many as 15 SKUs of tomatoes offered for sale to customers at Grocery Outlet stores, based on availability and pricing throughout the year. This is remarkable and shows the popularity and importance of this category to customers and the retailer alike since Grocery Outlet is a limited-assortment format.
“Our No. 1 SKU year-round is a 2-pound bagged roma tomato, which represents 30 percent of category sales,” says Olson. “Grape tomatoes come second with 20 percent of sales, and we carry several different packs and labels at the same time. All others (on-the-vine, yellow, heirlooms, etc.) combined are tied for the No. 2 spot at 20 percent. This is a significant category for us and is where the excitement in this category comes from, since this segment is always changing. Our buyer, Daniel Bell, spends time every week looking for exciting new flavor profiles at a value. Regular rounds are No. 3 at 15 percent. We typically will source a 5×6-size 2-layer. However, we always look to partner up with growers to move what they have the most of, so we change our spec as needed and carry anything from a 6×6 to 4×4 size tomato.”
Nationally, snacking tomatoes lead the pack at a 33.2 percent share of category sales, according to 2017 data from the Chicago, IL-headquartered Nielsen Perishables Group. Hothouse on the vine tomatoes are second at 24.4 percent, followed by romas (17.2 percent), hothouse round (13.9 percent) and field (11.3 percent).
“Snacking tomatoes continue to experience tremendous growth within the category,” says Dionysios Christou, vice president of marketing for Del Monte Fresh Produce in Coral Gables, FL. “New snacking varieties have been instrumental in expanding the consumption of tomatoes, especially for consumers on the go and those with busy lifestyles. Our Bon Bon grape tomatoes are exceptionally sweet and come in a patented resealable snacking bag.”
Similarly, Windset Farms, in Delta, British Columbia, has recently introduced its Concertino Mini Grape tomato to fill this market niche.
One of the newest snack-sized tomatoes to hit the market is the Tomberry, which was developed by Eminent Seeds NL and will be proprietorially grown and marketed in Canada, the U.S. and Mexico by NatureFresh Farms, headquartered in Leamington, ON.
“The Tomberry is the ‘world’s smallest tomato,’ about the size of a Skittles candy,” says Matt Quiring, executive retail sales accounts manager. “It’s a high flavor, sweet-tasting tomato without a lot of acid. Foodservice is especially interested in it for salads as it takes the labor out of slicing larger tomatoes. For retail, we’re offering a 4.5-ounce clamshell with 60 percent red and 40 percent yellow. The seed company is working on an orange-color, so in the future we may offer a tri-color pack.”
Recent sales growth in Roma tomatoes is something observed by Rick Feighery, vice president of sales at Procacci Bros. in Philadelphia. “Due to its high flavor, usages for Romas are moving beyond cooking to use in making salsa and slicing for sandwiches.”
U.S. East Coast field-grown, sun-ripened tomatoes are the best sellers for Brooklyn, NY-based Lucky’s Real Tomatoes. Lucky’s is a licensed grower/distributor of the Tasti-Lee Brand from Bejo Seeds, which, according to chief operating officer Lucky Lee, it is a variety that is packed full of the summertime flavor consumers love and often miss.”
Field-grown bulk tomatoes, be it rounds, romas, grapes or cherries, are the majority of demand seen by Rocky Ray, vice president of sales for Ray & Mascari, repackers headquartered in Indianapolis, who opened a facility in Lakeland, FL, last year to provide logistical advantages to markets in the Southeast and East Coast. “I think each type of tomato has its place in the market.”
Round tomatoes represent the majority of field-grown tomatoes in Florida, at about 75 percent of production. The balance of the production is spread between Roma tomatoes (12 percent), grape tomatoes (10 percent) and cherry tomatoes (3 percent), according to the Florida Tomato Committee, in Maitland, FL.
What does make the tomato category seasonal is the desire to bring in heirloom varieties at the peak of season based on availability, according to Grocery Outlet’s Olson. “One of my favorites is the Kumato, when we can offer it to our customers at a value.”
Melissa’s/World Variety Produce, a specialty produce purveyor based in Los Angeles, has experienced an overall increase in its heirloom tomato sales of 12 percent over the past year, with traditional sizes gaining 8 percent and baby heirlooms 14 percent, according to Robert Schueller, director of public relations. “This increase is a result of better supplies and demands in the marketplace for colorful tomatoes. Our best seller is the baby mixed heirloom tomato packed in a clamshell.”
Specialty tomatoes such as heirlooms, gourmet medleys and multicolored varieties seem to be trending, says Ray. “These are more readily available now in retail stores as well as in restaurants. However, these varieties do come at a premium.”
3. Consider Organic
Organic is a strong part of tomato sales at Grocery Outlet, representing approximately 15 percent of category sales, says Olson. “We typically have two SKUs. However, this can change depending on availability, value and what our supplier partners need us to move.”
Availability in organic tomatoes runs the gamut across many varieties.
“Our organic tomato selection continues to be strong, with beefsteaks, TOVs, grapes and heirlooms,” says Chris Veillon, chief marketing officer at Pure Flavor in Leamington, ON. “These primary items are our core and strongest items for our organic offering.”
Red Sun Farms’ newest tomato offering is an organic beefsteak.
One caution is that there is a limited market for organic due to pricing, says Weis-Buy’s Weisinger. “Expense may have constraints on younger families when purchasing organic and other specialty tomatoes. Therefore, price will continue to be important in marketing any tomato now and in the future.
4. Choose Packaging With Purpose
There’s nothing like a bright-red bulk display of tomatoes. However, packaging of this vegetable is on an upswing at retail for several reasons, according to Procacci’s Feighery. “Plastic clamshells make for easy stacking on display. Packaging also assures the correct ring, which is important for premium tomatoes. I think we’ll see packaging for produce increase overall as retailers add more self-checkouts.”
Plastic clamshells are most popular (for tomatoes), according to Ray & Mascari’s Ray. “They look nice on the shelf while still protecting the fruit. Grab bags and flow wrap are trying to gain traction. We also see pulp overwrap trays making a comeback. They give the product a ‘wrapped in-house’ feel.”
Sustainable packaging is important to consumers, according to Justine Chevalier, events manager for Mastronardi Produce, based in Kingsville, ON. “That’s why we introduced several packages that use less plastic and are recyclable. One is Top Seal technology, which uses 20 to 30 percent less plastic than ordinary clamshells. Today, this is now an industry standard.”
Packaging can play an effective role in marketing. This spring, Pure Flavor will roll out a rebranding of all its products, including tomatoes, says Veillon. “Clear packaging lets customers easily see the brand and product type while being able to clearly see the product inside the packaging. The packaging also uses high impact colors.”
5. Shrink Shrink
Retailers should optimize ordering and inventory rotation as well as educating and training produce department employees on best receiving, handling and display practices to reduce shrinkage, according to Del Monte’s Christou. “For instance, low inventory could lead to a loss of sales, and too much inventory could increase shrink. Additionally, practicing First-In, First-Out (FIFO) ensures the product orderly inventory rotation, avoiding age-related damage. Personnel should also monitor equipment on a regular basis and confirm that produce coolers are at the ideal temperature.”
The optimal storage temperature for ripe tomatoes is 55 to 70 degrees Fahrenheit.
“Refrigeration temperatures below 50 degrees Fahrenheit cause the natural sugars to break down in the fruit, and the tomatoes will be not be as sweet or as firm as desired,” says Lori Castillo, marketing director for NatureSweet, in San Antonio.
Failure to remove compromised product could accelerate the spread of mold and fungus, causing more loss of product and possibly become a food safety hazard, Christou adds. “Retailers can utilize category management to optimize sales and minimize shrink.”
6. Build Destination Displays
Tomatoes are displayed in multiple ways at Grocery Outlet stores. One is the regular offerings on dry Euro tables in RPC trays in the produce department, says Olson. “We utilize the tops of our dry table ‘wing boards’ to promote and highlight special varieties. Field bins are something we use either in the back with our produce dry tables or outside the entrance to the store to really push what is being featured or for the added holding power that the 2-pound roma sometimes requires. Finally, slant racks have been a great merchandising vehicle. It’s simple to use and holds up to 4 cases of product that is simply placed on the rack, which reduces labor and helps eliminate shrink. They are easy to move when cross-merchandising tomatoes with avocados or other tie-in items.”
As a supplier, NatureSweet has a variety of different racks and secondary displays that it provides retailers to aid in merchandising efforts that can help increase sales nearly 30 percent, according to Castillo.
“If a retailer has stores near a college area, then snack tomatoes are ideal for additional displays; if there are more Baby Boomers in the neighborhood, then bulk displays of beefsteaks and TOVs. If it’s summer and BBQ season, then you want big slicers for burgers out in front,” recommends NatureFresh’s Quiring.
Seasonal themes are ideal for tailoring tomato displays.
“In the summer, we’ll build huge displays of local (New) Jersey tomatoes,” says Richard Stiles, director of produce and floral for Redner’s Markets, a Reading, PA-chain with 44 markets and 13 quick shoppes in Pennsylvania, Maryland and Delaware.
Beyond time of year, a good mix of product that helps keep the display full and attractive on an annual basis includes the following, recommends Pure Flavor’s Veillon: TOVs; loose cluster beefsteak; loose roma; loose red grape; dry pint package of cocktail; 1-pound package specialty items; and mixed medleys, different colors of grape tomatoes and cherry tomatoes.
7. Up The Ring
There are many shoppers who buy the same tomato week in and week out for all their uses: salads, soups, sauces and snacking, which may not be the most efficient or best flavor decisions, explains Pure Flavor’s Veillon. “As growers/marketers, we need to be better at delivering the most information we can to our customers to help them make informed decisions. After all, tomato shoppers are becoming connoisseurs in many respects; they are hunting for the right tomato depending on its usage. In doing so, we will see various aspects of the tomato category grow as consumers will be buying the right tomato for the right eating occasion.”
Another way to promote is cross-merchandising. “By adding other complementary produce items to the display such as avocados, retailers create a customer friendly, one-stop-shop opportunity where customers can find all the ingredients for their favorite tomato recipes,” says Del Monte’s Christou.
A good example of this is at Redner’s Markets, where fresh basil, herbs, garlic and avocados are merchandised with tomatoes in the produce department, and tomatoes are merchandised next to ground beef in the meat department.
“Recipes and ‘how to’ guides suggesting how tomatoes can be cooked and served are great ways to incentivize shoppers to purchase more volumes and varieties of tomatoes,” says Claire Vasquez, sales and marketing assistant at Windset Farms.
Mastronardi Produce has turned cross-merchandising into a meal solution with its 2017-launched ‘You Make Me’ line of four pasta kits, complete with fresh tomatoes, pre-portioned pasta, spice packets and infused olive oil. Display shippers are available for retailers to position the kits alongside the fresh tomato display. Alternatively, retailers can move the shipper closer to other grocery convenience items or to complementary areas such as the bread aisle or bakery to capture produce purchases in a completely different part of the store.
8. Promote, Promote, Promote
Tomatoes find a weekly home in Redner’s Markets’ promotional circulars, says Stiles. “I can’t remember when some type of tomato hasn’t been in the ad. This is an important commodity for us and one that generates a lot to our bottom line. With so many sizes, shapes and colors today and good overall availability, it’s possible to offer good deals every week.”
One of the best ways to promote tomatoes and drive volume is to set an eye-catching price, suggests Procacci’s Feighery. “It’s all about the right item, at the right time and right price. Also, gauge the promotion currently. Don’t run out and don’t over-order. If there is extra volume on the market, maybe two farming areas are overlapping, the price may need to come down even further to turn over. You can do a week-on ad and a week-off, or two weeks on and one off. It’s all a balancing act.”