Add volume and excitement to this profit-generating category with solid merchandising.
When Keith Cox, produce category manager at K-VA-T Food Stores in Abingdon, VA, with 130 stores, started decades ago as a part-time produce clerk, the produce department only handled three different types of tomatoes. “We had a slicing tomato, a tray packed salad tomato, and some cherry tomatoes,” he says. “When I look at the category now, it’s amazing how far it has come over the years. We currently carry 21 different types of tomatoes.”
The category’s appeal to a diverse demographic group, profit importance and proliferation of options have given rise to active merchandising. “Tomatoes are very relevant to our profit and are one of our top three sellers,” says Cox. “Merchandising tomatoes has increased significantly. We promote some type of tomato almost every week — whether on ad or a temporary price reduction.”
Joe Spano, vice president of sales and marketing with Mucci Farms in Kingsville, Ontario, Canada, has seen the tomato category explode over the past 10 years. “Any major grocery chain today dedicates a major amount of shelf space to the tomato category,” he says.
The evolution of the category means evolution in marketing as well. “Merchandising tomatoes has evolved considerably during the past 20 years, much in part to a slew of new types, varieties, and grower brands coming to life,” says Chris Veillon, chief marketing officer for Pure Flavor in Leamington, Ontario. “Gone are the days when the same tomato was used for everything in the kitchen, including sauce, salad, snack or sandwiches,” he says.
Stores that use comprehensive merchandising stand to profit even more from the tomato upsurge. “Placement, price and flavor profile should come into play before the product even hits the shelf,” says Rick Feighery, vice president of sales for Procacci Brothers Sales Corp. in Philadelphia. “Promotion is a huge percentage of tomato movement. It’s not about a one-week lift, it’s about proper placement to get repetitive weeks with increased sales.”
Evolve Your Variety
From the field-grown tomato to cluster, heirloom, greenhouse-grown and grape, new varieties stimulate sales. “The retail sector has seen various trends over the past decade,” says Dionysios Christou, vice president of marketing for Del Monte Fresh Produce N.A. in Coral Gables, FL. “These include the introduction of [tomatoes-on-the-vine], which drew consumers to hydroponic varieties more consistent in quality and flavor. The trend then returned to a focus on vine-ripe varieties. Recently, the grape/cocktail tomato segment grew rapidly.”
Chuck Weisinger, president of Weis Buy Produce in Fort Myers, FL, explains since the 1980’s the industry has seen dramatic shift in the tomato category and its business. “Field-grown Florida tomatoes continue to have primary usage at foodservice and for slicing on sandwiches,” he says. “The category has expanded with grape and cherry tomatoes grown and harvested in pints or 20-pound bulk. With the increased advent of hothouses we now have yellow flesh tomatoes, brown and white tomatoes, yellow grape tomatoes and cherry tomatoes in all sizes and shapes.”
The mainstays keep the category going but the new varieties add excitement says Ken White, director of sales for Procacci. “These bring new flavor profiles into play. Every year you get something new to promote.”
The explosion of varieties has been driven in part by the quest for flavor. “Flavor is a big thing in the tomato category now,” says Spano. “Flavor means not just brix levels, but having a nice balance of brix and acid. Tomatoes need that balance between acidic and sweet — something retail should very much consider when selecting product.”
Paradoxically, more variety can lead to more purchases by shoppers in the category as opposed to cannibalizing sales. “We do a lot of consumer studies and we see consumers will pick up several different varieties of tomatoes,” says Mucci’s Spano. “For example, shoppers will buy our variety pack but still pick up a beefsteak.”
Usage plays into the variety demand. “Customers buy different tomatoes for different uses,” says Sam Marrogy, produce manager at Harbortown Market, an independent gourmet grocery in Detroit. “They buy the smaller ones for salads but larger ones for slicing, so retail has an opportunity for multiple sales in the same category.”
Snacking And Specialties
One of the biggest opportunities in the category has been the advent of the snacking and specialty tomatoes. “The growth drivers in the category right now are the snacking tomatoes, grape tomato and blended flavors,” says Spano.
K-VA-T’s Cox agrees these are the most trending items, “Snacking and specialty tomatoes have become items with many uses,” he says. “It’s very convenient for consumers, and there are so many different choices.”
These grape/cocktail tomatoes are among the bestselling, according to Christou, due to consistent appearance, quality and flavor profile. “New snacking varieties have been instrumental in expanding the consumption of tomatoes, especially for consumers with busy lifestyles,” he says. “For example, our exceptionally sweet Bon Bon grape tomatoes come in a grab-and-go 5.5-ounce cup or re-sealable bag, perfect for the on-the-go consumer.”
Harold Paivarinta, senior director and head of sales for North America for Red Sun Farms in Kingsville, ON, reports grape tomatoes, both organic and conventionally grown, have been the cornerstone of Red Sun’s snacking tomato program. “We have also experienced significant growth in our medleys as well,” he says. “And, our award-winning Cherry-On-The-Vine has been growing consistently since 2011 with no signs of slowing down.”
K-VA-T increasingly devotes more space to snacking tomatoes. “We’re seeing really good results from this part of the category,” says Cox. “Instead of doing just a stand-by grape tomato, we’re advertising the Cherub tomato from Nature Sweet. We also handle Sweetpops from Red Sun.”
Give Ample Room
Display space for tomatoes should parallel their importance to the department. “We know tomatoes are a volume driver,” says Mucci Farms’ Spano. “Good retailers will dedicate a significant amount of space and pride themselves on their tomato displays. Some of our close customers have 20, 30 or 40 different tomato SKUs in their stores.”
Tomatoes are a destination, emphasizes Pure Flavor’s Veillon, and should be treated accordingly. “As the produce aisle’s strongest mover, the category should be located at the front of the store to capture consumer interest as they begin their shopping experience,” he says. “A number of retailers use end caps to draw people in to the category, which proves to be successful to get those who may bypass the tomato aisle.”
K-VA-T devotes more space to tomatoes because of the increasing variety and packaging, according to Cox. “You must devote the right amount of space to get a good representation of all the different types of tomatoes to stimulate increased sales,” he says.
Procacci Brothers’ Feighery notes, though, mainstays used to be 80 percent of sales and took up 80 percent of the space; things have changed. “Now we see only 50 percent of the real estate used for those 80 percent of sale items,” he says. “More and more space is dedicated to the varietal items because these are the items that create conversation.”
Cox explains K-VA-T creates excitement with planned lobby or entrance displays each week. “If we have a tomato on ad that week, we’ll do a 4-foot by 4-foot bin of that item so as shoppers enter the store, they see a nice tomato at a good price point,” he says.
Retailers who don’t devote sufficient space to the category may be losing out. “We are always truly disappointed when the same space is allocated to tomatoes in some supermarkets as was 20 years ago,” says Weis Buy’s Weisinger. “This cuts the space for more variety and more potential sales to a minimum.”
Make It Appealing
An attractive tomato display yields greater customer response. “Visual appeal is key for consumers when choosing their tomatoes, so retailers should keep tomato displays full, clean, and well organized,” says Christou. “Red, ripe tomatoes should be placed in the front of displays since they move quicker and bruise easier, and overripe fruit should be removed. Large bulk displays help convey an image of freshness to consumers.”
Color and variety are easy tools to utilize with this category. “Tomato displays offer a variety of colors, sizes and textures,” says Red Sun’s Paivarinta. “Each retailer will adjust selection to meet customer needs, but there is always a range from TOV’s to snacking varieties in both conventional and organics.”
Christou advises placing other produce in the display, such as avocados, helps vary the color and improve the eye appeal. “By adding other complementary produce items, retailers create a customer-friendly, one-stop opportunity where shoppers find all the ingredients for their favorite recipes and help promote related products,” he says.
An appealing tomato display is founded on quality, and Harbortown Market’s Marrogy cautions stores to manage displays well. “You must pay close attention to quality, handling and rotation to ensure tomatoes aren’t going bad or getting damaged on the bottom,” he says. “I only put out one or two layers on tables and keep the rest in the cooler. Be careful not to overload displays.”
Stores may organize displays from a shrink perspective. “It’s all dependent on the acceptable level of shrink for each retailer,” says Feighery. “Items that are 20 percent of sale will have a higher shrink because they may not have the turn. You have to test everything, but in the end keep and manage the items that work.”
Getting tomatoes out of the display and into secondary locations stimulates sales. “Tomatoes should be cross-merchandised throughout the store,” says Mucci Farms’ Spano. “Merchandize in the cheese department near the Buffalo Mozzarella, or put four- or five-pound boxes next to the steaks in the summer months. The beauty of the packaging we have now is you can take pints and bags and put them anywhere you want.”
Secondary displays are very important says Cox. Stores improve per-week sales with secondary displays, even if not on ad. “And when we do ads, we put a secondary display of that particular item for the week to showcase it and drive even more sales,” he says.
Christou suggests cross-merchandising tomatoes outside the produce department with non-produce items including sandwich items, pastas, deli meats and cheeses. “Del Monte’s merchandisers can assess the opportunities in individual produce departments and identify how different promotions and cross-merchandized items affect sales,” he says.
Cross merchandising and other POS aids may seal the sale for some shoppers. “There are consumers who want to eat healthy but don’t know where to start,” says Red Sun Farms’ Paivarinta. “By placing tomatoes with other products, retail can spark ideas and recipes benefiting all involved.”
Veillon notes retailers can assist consumers on selecting the right type of tomato based on use with product information cards, signage on racks holding product and in-store demonstrations. “Featured product demonstrations are key in driving sales,” he says.
Red Sun invests heavily in recipe development, citing its goal to inspire and help consumers eat clean and healthy. “If our recipe was the deciding factor on whether someone decided to cook on their own, as opposed to going and getting takeout, then we have helped someone take that first healthy step,” says Paivarinta. “By showing consumers how to cook quick, healthy, delicious meals, you are enriching their life and creating a repeat customer.”
Consumer response to tomato prices varies by item and demographic but generally the category responds to promotional pricing. “Price is a primary motivator when it comes to driving sales,” says Veillon. “During most weeks, tomatoes in a variety of formats and types are on sale in some capacity.”
With bulk traditional tomato variety purchases, notes Christou, price has a significant impact on sales. “Most retailers run discounted prices on tomatoes about once a month, but during peak production, discounts occur more frequently,” he says. “Price has less of an impact on grape and specialty tomato sales because they tend to be relatively price inelastic.”
K-VA-T’s top-two unit movers are the beefsteak tomatoes and tomatoes on the vine, and Cox reports those are fairly price-sensitive on retails. “If they go up 20-cents per pound, it’s not a deal breaker,” he says. “However, you can’t get over the $2.99 per pound retail. Once you get into the $3 range, it will kill the movement.”
Cox agrees specialty tomatoes are less price-sensitive. “You’re going after a different demographic with these,” he says. “Most customers are willing to pay more for a specialty-type tomato. We carry a cherry-on-the-vine, and our customers understand they have to pay a premium price for it.”
Stores should work with suppliers to plan promotions. “Run sales in spring and fall to promote tomatoes with price as well as color contrast, emphasizing the flavor and health benefits,” says Weis Buy’s Weisinger.
Feighery emphasizes the importance of suppliers knowing all the ins and outs of the business. “We know what a computer won’t ever be able to tell you,” he says. “We’re in touch with all the factors affecting the tomato and can advise our customers what is happening.”
This is especially true when planning promotions, agrees Procacci’s White. “Most retailers are running ads four to six weeks out, so they want an idea of what item in the category they should be looking at during that time period,” he says. “We want to ensure we have the product, the right pricing for promotions and that we’re pushing the right varieties.”
A Firm Foundation
Good displays and low shrink start with quality
For a successful tomato category, stores strive for longer shelf life and less waste. Keith Cox, produce category manager at K-VA-T Food Stores in Abingdon, VA, suggests shelf life begins with proper ordering and continues through in-store handling. “Like any other fresh produce item, first check the quality before you display,” he says. “Then, make sure you’re doing a good rotation to keep everything First-In, First-Out (FIFO) to keep product fresh. A good quality tomato when it hits the shelf at store level should last four to six days on display without any issues.”
Optimizing ordering and inventory rotation will reduce shrinkage, notes Dionysios Christou, vice president of marketing for Del Monte Fresh Produce N.A. in Coral Gables, FL. “Low inventory could lead to a loss of sales, and too much inventory could increase shrink,” he says.
Success also means ensuring customers remain happy with their purchase once they’re home. “Stores must offer good quality so tomatoes don’t go bad in two to three days at the shopper’s home,” says Sam Marrogy, produce manager at Harbortown Market in Detroit. “Some stores will sell cheap to get rid of old tomatoes. But if that product goes bad in the home, it won’t create a satisfied or repeat customer.”
Good handling practices set up the category for success. Harold Paivarinta, senior director and head of sales for North America for Red Sun Farms in Kingsville, Ontario, Canada, notes tomatoes should be stored at room temperature and not refrigerated. “Chilling tomatoes results in a more ‘watery’ flavor and mealy texture,” he says. “Don’t store tomatoes near ethylene producing fruits such as oranges or bananas as they will accelerate tomato ripening.”
Temperature at retail is a real challenge, agrees Rick Feighery, vice president of sales for Procacci Brothers Sales Corp. in Philadelphia. “One of the biggest issues we see is the product being kept too cold either adjacent to a refrigerated shelf or near the front door in the winter,” he says. “Tomatoes must be kept at 55 degrees — temperature can affect flavor and definitely affects shelf life.”
Retailers can utilize Del Monte’s category management services to optimize sales and minimize shrink. Christou suggests retailers educate and train produce department employees on best receiving, handling and display practices. “Practicing FIFO ensures orderly inventory rotation avoiding age-related damage,” he says. “Personnel should also monitor equipment on a regular basis and confirm produce coolers are at the ideal temperature as well as remove compromised product from displays. Failure to remove compromised product could accelerate the spread of mold and fungus — causing more loss of product and possibly becoming a food safety hazard.”