Posts Tagged ‘ market ’

Issue 84: Current Consumer Attitudes Towards Tomatoes

September/October -2005
Author: Dr Sophie Parks & Dr Suzie Newman

How do Australians currently perceive tomatoes in the market place? This is an important question for the greenhouse industry at this point in time because hydroponic tomato products now have a strong presence in the market place. Understanding tomatoes is one way of identifying areas for industry improvement. To attempt to quantify consumer attitudes towards available tomato types, researchers from NSW DPI recently carried out a consumer survey in Sydney. Significant findings from this work are reported here.

About the survey
The survey was carried out over four days in June this year. Four supermarkets and four fruit and vegetable stores were randomly selected from the North Shore of Sydney. Twenty-five shoppers were interviewed in each store, near the tomato section, providing 200 respondents in total. Twenty questions were asked and the questionnaire took between 3 and 5 minutes to complete. The questions asked were designed to identify purchasing behaviour, use and storage of tomatoes, and the level of satisfaction with tomato quality. For this survey, five types of tomatoes found in the market place were defined: standard/gourmet, roma, truss/vine ripened, hydroponic and cherry/grape.

Purchasing behaviour
Fruit and vegetable stores were slightly favoured over supermarkets for tomato purchases. Although 50% were interviewed in a supermarket, only 32% bought tomatoes exclusively from the supermarket. Most of those interviewed in a fruit and vegetable store (46%) exclusively bought tomatoes there. The remaining 16% shopped at both supermarkets and fruit and vegetable stores, and 6% shopped elsewhere such as growers markets or at an organic store. Most people shopped weekly (66%) buying either 3-5 tomatoes (37%) or 1 kg (40%). Over 10% of people bought 1-2 punnets of cherry or grape tomatoes instead of, or in addition to, other tomatoes. Consumers were asked about the two types of tomatoes that they most frequently bought. Standard tomatoes were the most purchased (67%) and hydroponic tomatoes the least purchased (18%) (Figure 1). Over 35% of shoppers bought truss and cherry types, and over 40% bought roma tomatoes.

Figure 1. The proportion of consumers that bought each tomato type. This was based on the two tomato types that consumers usually purchased. First type – light green; second type – dark green.

The importance of flavour and quality in tomatoes
In terms of quality characteristics, flavour is the king tomato quality. Almost 30% of respondents were concerned about flavour, more than any other quality, when they had been disappointed with a tomato purchase (Figure 2). Firmness was the next quality of concern (16%), followed by ripeness (12%). Flavour was a key reason for buying tomatoes but this differed among tomato types. For example, over 80% of those that bought truss tomatoes did so for reasons of flavour, whereas only 20% of those that bought field tomatoes bought them for flavour (Figure 3). When it came to the question of the most flavoursome tomato, the largest group of consumers identified truss as having the most flavour (Figure 4).


Figure 2. Consumer reasons for being dissatisfied with a tomato purchase.

Figure 3. The reasons for buying a particular tomato type.

Figure 4. The tomato type considered as having the most flavour.

A significant proportion of consumers are not very excited about tomato flavour in the market place. When asked to rate tomato flavour, generally, 57% felt that tomato flavour was poor, not as good as it used to be, or average, and 43% felt that tomato flavour was good to very good. Consumers were asked to score the different tomato types for a number of quality characteristics. These included value for money, colour and appearance, firmness, sweetness, flavour, keeping and overall satisfaction. Combining these scores did not reveal significant differences among tomato types. However, generally speaking, cherry/grape tomatoes scored highest followed by truss, roma, hydroponic and lastly field tomatoes with the lowest quality score. Some consumers commented on how they usually pick out the best tomatoes from a poor batch of field tomatoes. This reflects the lower quality score for this tomato type.

The importance of use and versatility
People buy tomatoes for different uses. At the time of the survey (winter) almost 80% of respondents used tomatoes in salads. Over 35% also used tomatoes in sandwiches and for cooking. Versatility emerged as an important factor in buying tomatoes. It was the most important reason for buying cherry/grape tomatoes and the least important reason for buying any other tomato type (Figure 3). Consumers commented that cherry/grape tomatoes are very easy to use. Cherry/grape tomatoes are ideal as a snack, good for lunch boxes, well liked by kids, easy in salads, sandwiches and on crackers. Some mentioned that waste was reduced compared to other tomato types. Evidently, cherry/grape tomatoes have very successfully captured a niche in the tomato market.

The importance of price
Standard tomatoes were not considered the most flavoursome, or of a particularly high quality, but they were the most popular purchase. One would assume from this result that consumers are price sensitive when buying tomatoes. When asked why they bought field tomatoes, people were more likely to state price than flavour as a reason for buying this tomato type (Figure 3). However, price was not the main reason for buying any of the other tomato types. For truss, roma, and hydroponic tomatoes, flavour was the main factor prompting the purchase of these types. Versatility was the main factor prompting cherry/grape tomatoes, as previously mentioned. Also, price was not an important reason for being dissatisfied with a tomato purchase. In this case, only 2.5% of respondents reported price as being the significant issue.

Consumer comments were revealing about tomato price. Some consumers stated that they were not prepared to pay for more expensive types after having been disappointed with several purchases. Others stated that price was not an issue when entertaining, or when fresh tomato flavour was an important part of the meal, but bought cheaper tomatoes at other times.

Is there a problem with the ‘hydroponic’ tomato?
It is of concern that in this survey hydroponic tomatoes were the least purchased tomato type and were only considered the most flavoursome tomato type by 13% of consumers. However, of those that bought hydroponic tomatoes, 65% buy them for their flavour. Additionally, hydroponic tomato consumers are more likely than other consumers to think of tomato flavour in the market place as generally good.

It would appear that quality is not the reason for hydroponic tomatoes being one of the least popular tomato types in this survey. Perhaps the answer lies in marketing of the hydroponic tomato. In any case, this issue provides an opportunity for the hydroponic tomato industry to explore new ways of gaining a larger piece of the tomato market pie.

Storing tomatoes at home
Knowing how consumers store tomatoes at home can indicate whether or not tomatoes are getting the conditions that encourage full ripeness and flavour. From this survey it appears that there is room to educate consumers about how to best store tomatoes at home.

The majority of consumers store tomatoes in the fridge for 4-7 days. Some people were willing to admit that they kept tomatoes for up to 3 weeks! Ideally, tomatoes should be ripened at room temperature to obtain the best flavour. Once fully ripened they can be placed in the fridge if necessary. Only 30% of people in this survey stored tomatoes at room temperature (Figure 5). Given the importance placed by these consumers on flavour, providing information on correct storage conditions may reduce the dissatisfaction many have with tomato purchases.

Figure 5. Storage of tomatoes at home: Fridge – in the fridge; Open – at room temperature; F+O – at room temperature then in the fridge.

About the consumers
In any survey it is important to know a bit about the people participating so that effects, such as gender preferences, can be identified. In this survey all the respondents were interviewed on the North Shore of Sydney. The North Shore was chosen with the assumption that people in this higher socio/economic area would be more prepared to pay for expensive tomato types. This was important as one of the aims of the survey was to obtain information from consumers about a range of tomato types. If the survey Reels rotate once to release short had been carried out in another region, or at Disposable reels with 25metre twine another time of day or year, we may have obtained a different picture of consumer attitudes towards tomatoes.

Nylon hanger for strength and durability obtained a different picture of consumer Long lengths quickly and easily unwound attitudes towards tomatoes. Hangers will not spin off the crop wire Proven over 5 years in NZ and Australia Two hundred consumers were interviewed in total. There were more females (73%) than males (27%). Over a third had children living at home (38%). Just under a third of people were born overseas (30%). Income was approximately evenly split among four income levels: $0-25 000, $25 000-65 000, $65 000-100 000, >$100 000. Almost half of people were over 50 years of age, 35% were 36-50, 16% were 25-35, and 1% of the respondents were under 25 years of age.

With few exceptions, gender, age, income and place of birth did not influence the way consumers answered the questionnaire. The exception was that 25-35-year-olds were less likely to rate tomato flavour as poor and more likely to rate tomato flavour as good compared with other age groups. This could be interpreted in two ways. Younger taste buds are known to function better than older taste buds; hence this age group has not suffered any loss of tasting capability. Alternatively, tomatoes really good as they used to, with this age group being too young to have ever tried a tasty tomato!

Conclusions
There is a lot to be gained by looking at tomatoes from the consumer perspective. Most consumers buy more than one type of tomato and they are passionate about flavour. Flavour is the main impetus for buying tomatoes, and flavour, firmness and ripeness are perceived to be the biggest problems with tomatoes. Given the emphasis placed on these qualities, consumers would probably benefit with more information on appropriate storage and ripening conditions for tomatoes. As for tomatoes sold as are not as popular as other types and are not readily perceived to be flavoursome, except by those that buy them. The industry needs to address these issues.

About the authors
Dr Sophie Parks is a plant physiologist focused on greenhouse and hydroponic production. Dr Suzie Newman is a postharvest physiologist focused on postharvest and market access issues. They are both based at NSW Department of Primary Industries at Gosford, NSW.

For further information contact:
NSW DPI, Locked Bag 26,
Gosford NSW 2250 Ph:
Email: sophie.parks@dpi.nsw.gov.au or suzie.newman@dpi.nsw.gov.au

What is tomato flavour?
The organoleptic (taste or flavour) properties of tomato fruits are determined largely by the amounts of solids, particularly sugars and organic acids, and the volatile compound composition (Stevens, 1972). Some 95% of a typical ripe tomato fruit is water, so the tomato quality is therefore determined by a very small amount of solid matter. About 8% of this dry matter is minerals, the rest consisting of various carbon compounds, half of which are sugars as glucose and fructose, and an eighth organic acids. These are the factors which contribute to the typical sweet/sour taste of a tomato.

Sugars and acids not only contribute to the sweetness and sourness of tomatoes, but are also major factors influencing flavour intensity (Stevens et al., 1979). Hobson and Bedford (1989) stated that consumers preferred fruit with a balanced high sugar content, the taste is sweet but, to most people, insipid. With high quality acidity and low sugar content, the taste is rather sharp and thin. When both acidity and sugar content are low, the taste is watery and unattractive (Winsor, 1966). Tomato flavour changes dramatically during the process of ripening. The sugar content of both the seed and pulp increases rapidly during the first appearance of yellow and orange colouration, and then to a lesser extent up to the fully ripe condition (Winsor, 1966). The acidity of juices is relatively high at the mature green stage, but decreases markedly throughout the ripening process from the green or green-yellow stages onwards. The flavour of the fruit is thus best at about the orange-red stage, when sugar content is high and before overall acidity becomes too low.

References
The composition of cherry tomatoes and its relation to consumer acceptability.
J.Hort.Sci., 64(3): 324-329, Hobson, G.E. and Bedford, 1989.

Components contributing to quality variation among tomato lines
J.Amer.Soc.Hort.Sci., 97(1): 70-73.

Potential for increasing tomato flavour via increased sugar and acid content. 1979.
J.Amer.Soc.Hort.Sci., 104(1): 40-42

The composition, flavour and firmness of tomatoes
Scientific Hort., 18: 27-35.

Issue 82: IPM Practices for Outdoor Growers

May/June -2005
Author: Michael O’Dea

Following a cancer scare, MICHAEL O’DEA moved to south-east Queensland where he established an eco-friendly, outdoor hydroponic facility, adopting IPM practices and biocontrols to grow pesticide-free lettuce, herbs and Asian greens for the health food market. His story first appeared in the November/December 2004 issue of Practical Hydroponics & Greenhouses. Here, the grower gives us an update.

Well, 10 months later;how did we go? What were our goals and did we achieve most of them? To answer the first question, it is necessary to review our objectives, which are best summarised in an article authored by Dr Porter and published in Practical Hydroponics & Greenhouses (Impact of Global Market Drivers, Sept/Oct 2004). This article highlighted a number of issues that will influence future food production practices worldwide.

In his article, Dr Porter said that in the future, food will be produced using very different technologies than are used today. “Public concern over food safety (particularly chemical residues) and environmental flow of pesticides and nitrates into the environment are having a huge impact on crop production systems,” he said.

Dr Porter pointed to water conservation and water use efficiency as other major problems facing the world and, of course, is a major issue here in Australia. He also points to energy audits on production and anti-GMO sentiment as market drivers that will force growers to conform to stringent quality assurance guidelines to meet food and environmental safety standards;standards that are already embraced by many northern European countries. “In the next decade, ‘clean and green’ will mean zero pesticide residues in food and will require proof that crop production practices do no harm to the ecosystem, otherwise growers will face the prospect of environmental tariffs,” Dr Porter said.

A GROWER’S EXPERIENCE
We figured that people have to eat and they will want nutritious, pesticide-free food. We attended a nearby Saturday morning grower market on the Gold Coast for three weeks and we sold out of our product very quickly. The consumer reaction to the pesticide-free, no soil organisms, no herbicide concept was really positive, and it gave me a chance to explain to customers that we were not organic, but a viable alternative.

Unfortunately, the other growers didn’t see it that way and complained we had taken a lot of business away from them (which was true). The market organisers decided to listen to these growers;not the customers. We were not invited back.

Marketing-wise, a lot of what we did was guesswork. We knew we could grow a good product because we had undertaken formal training at Burnley College, Victoria, and had 20 years experience as commercial growers. What we did not have was knowledge of the varieties the market wanted, which meant we wasted time growing the wrong varieties. It also took some time to grow the right crop to suit the climate. We are still learning. As Rick Donnan has said many times in his column, Reader Inquiries, hydroponic technology represents only 10% of skills required to grow a marketable crop;the other 90% is based on knowing your crop and having the growing skills.

We now deal with a wholesaler at Rocklea Market, Brisbane, and a supermarket chain. We also supply restaurants direct. In a way, that suits me fine as we no longer spend all day at a market, which can be time-consuming.

WATER-USE EFFICIENCY
The majority of hydroponic growers know how efficient hydroponic systems are in terms of water and fertiliser use. In our case, we use 700 litres of water to produce $100 worth of produce as opposed to the scandalous 750, 000 litres of water to produce $100 worth of rice. As well as the usual fertilisers, we add in our own organic ‘herbs and spices’ to get optimum crop health, and we do not dump water every so often.

We use town water which is chlorinated. Our water quality is atrocious and hovers around EC 0. 8-1. 2 – the water contains a lot of dissolved solids. In spite of the handicaps, we still produce an excellent product.

Our water and fertiliser costs are small. There is also no run-off into the environment – we recycle the water. If we need to bleed solution, we irrigate fruit trees and potted herbs.

Hydroponic and greenhouse growers have many advantages over traditional soil growers. I can’t see why hydroponic growers need GMOs, because we do not need to weed, and we can spray on friendly Bacillus thuringiensis (Bt) to aid in controlling a number of harmful insects, if we need to. We do not need to use ozone depleting methyl bromide – our production level per sqm is far higher than can be achieved by growing in the ground. We use very little in the way of pesticides, and hydroponic growers are allowed organic inputs, such as Eco Oil and soap sprays to counter insect pests and diseases. We grow our crop in polyethylene channels;we do not use PVC.

NO PESTICIDE TOLERANCE
In Europe, especially in Scandinavia, many crops are grown hydroponically without the use of pesticides using biocontrols to keep pest problems in check. Water and nutrients are also recycled.

Our objective at the Squeaky Green farm is to avoid the use of toxic chemicals on the vegetables we grow to give consumers a pesticide-free product. To achieve this, we use biocontrols to keep most of our pests under control. We release hypoaspis predatory mites every fortnight to keep fungus gnats and thrips under control. We were given some rove beetles ages ago by Biological Services in Loxton, SA, to control fungus gnat, thrips and shore flies, and we still see these beetles in the media when we are working around our crop. We keep a constant look out for pests in the crop and eveyone who works at Squeaky Green monitors the crop for pests and beneficials during their work routines. A daily record is kept of the status of the crop, where beneficials are released, and where pests are found.

Because we use friendly bugs, they put a constraint on what we can use in the way of sprays. If we have to use sprays, then they have to be biorationales. We did start off by using pyrethrums, which are an allowed organic input, but we found it tends to knock off beneficials as well as insect pests.

We have found we get a very good influx of aphidius parasitic wasps to control aphids (Myzus persicae). We also get a variety of ladybird (Hippodamia convergens) that feed on aphids. We are exploring the possibilities of growing banker plants to keep a population of parasitic wasps on hand.

We have found ants are our biggest problem – the ants farm the aphids for their honeydew secretions. We use boric acid and sugar as a bait, and greasing around the legs of the tables tends to keep the numbers down.

As far as the aphids are concerned, if we keep a careful eye on our Asian veggies, we know where the aphids are and we can get rid of them by spraying them with Eco Oil. I only use a small pack to spot spray hot spots. We did get some large brown aphids (Uroleucon sonchi) on our lettuce in the winter months, but they seemed to disappear by spring.

We also release green lacewings fortnightly and they do a great job of cleaning up anything they can get their fangs into; including my arm.

Micheal and Jant O’Dea inspect the crop for pest.

I have seen a few whitefly on our sticky traps, but numbers have never increased, so maybe the lacewings are eating any nymphs. We have a resident population of brown frogs in our flood and drain trays.

I think our worst problem is going to be Rutherglen bugs (Nysus vinitor) in late spring/early summer. We struggled with them in 2004. Many conventional growers have the same problem. Complete exclusion is possible but it restricts the air flow around the crop too much. Has anyone got any help on this topic? I have talked to a number of entomologists in the IPM area and they all tell me Nysus vinitor is very hard to control biologically, as are mirrids, another sucking insect. I do have some strategies in mind, such as growing a trap crop which I can use to attract the bugs away from our veggies.

The Vortex Bug Bin light trap is most effective inside the netting

Lepidopterous caterpillar pests are not a problem for us as we use netting, and we also use a Vortex Bug Bin light trap. We started off by putting the light trap inside the netting, but we have since moved the trap just outside the netting. This device has proved invaluable to us because it traps so many bugs. I do not know all the bugs it traps but I did have a talk to Dr Richard Drew at Griffith University, Qld, who has worked with the light trap. He is enthusiastic about its ability to trap bugs of the crop-eating kind.

This innovative product has enormous potential in many areas of crop production including vegetables, turf, macadamias, lychees, cotton, and anywhere where the Coleoptera beetle and Lepidoptera caterpillar are a problem for growers. Redlands nursery just outside Brisbane has used the Vortex light trap for four years and they say they could not do without it now.

According to evaluation tests carried out by CSIRO Entomology at the Australian Cotton Research Institute, Narrabri, NSW, the overall results of the Vortex light trap were positive. The data shows that Helicoverpa caterpillar densities were substantially reduced within and around the array of Vortex light traps. It must be stressed that this work only involved two fields over part of a single season. Such unreplicated experiments require cautious interpretation because other (unknown) factors could contribute to the differences shown. The CSIRO study showed promising results, but it also highlights the need for careful evaluation in the future.

The Squeaky Green farm specalises in pesticide-free Asian herbs and lettuce.

LABELS ON FOOD
‘Clean and green’ will mean zero pesticides in fresh produce with no harm to the environment, and some kind of proof to show that these standards are achieved. Labels on food to indicate that it is produced in a sustainable way is one way to demonstrate proof. For example, in Belgium, over 2,000 growers market under the Flandria label, where the motto is ‘Quality Vegetables – Approved by Nature’. In Australia, Freshcare does address grower accreditation to some extent.

FINAL REMARKS
So far, we are not really emphasising the fact that the Squeaky Green farm is pesticide free. I need more time to find out how far into the season we can go with no pesticides. We have had to use azoxistrobin to treat small amounts of septoria and pythium.

We use a bio-friendly trichoderma fungi in the water to suppress disease organisms and it appears to work really well. I have a microscope and I can diagnose the most common fungal pathogens by the shape of the spores. On the subject of diagnosis, I use a 12x magnification lens, which I bought off my optician, to identify insect pests and diseases.

We had a touch of albugo (also known as white rust) on the Asian greens. It only appeared on one plant variety and we have stopped growing this crop until the weather conditions are no longer conducive to the disease.

Our quality has been excellent all the way through the season and we have gained sales by having a better quality product than the ground growers. By the end of the year, in time for summer, we will have 5,000 sq. metres of production area.

What we do need is like-minded growers to try and achieve ecologically sustainable standards and to put together a label that consumers will recognise.

For soil growers, there are some encouraging technologies being used to conserve water and nutrients. Dr Richard Stirzaker from the CSIRO has invented a soil probe which enables ground growers to monitor nutrient usage where water is in the soil profile. The device is called FULL STOP and can be used to give precise water and nutrient doses. Mulch techniques have also been developed to avoid disturbing soil profiles. By growing a cover crop, the resulting problems of bare earth can be avoided.

It is up to us as growers to start to implement sustainable growing systems, and here at Squeaky Green, we have a lot of answers to the problems we have experienced so far. It would be good to get some kind of Internet chat room going for likeminded growers.

ACKNOWLEDGEMENTS
I would like to thank my wife Janet and daughter Nicola for helping to achieve our goals. Without their eagle eyes, we would not be able to be Squeaky Green.

For further information contact Michael O’Dea at email: greennem@netlink.com.au

Issue 81: Weathering the Tomato Season

March/April – 2005
Author: Steven Carruthers

Recent glasshouse expansions, combined with the arrival of imported tomatoes from New Zealand, has seen the market dynamics change for premium-grade hydroponic tomatoes in Australia. STEVEN CARRUTHERS reports small growers are struggling to stay profitable, and need to grow smarter if they want to stay in the fresh tomato business.

With new state-of-the-art greenhouse facilities either recently constructed, under construction or nearly approved, the industry’s spectacular growth is changing the market dynamics for hydroponic tomatoes. As large greenhouse growers continue to expand to supply premium-grade tomatoes year-round, smaller growers are starting to feel the squeeze. From the beginning of summer, piles of high quality tomato varieties fill the markets, and prices plummet. Grower returns barely meet the cost of production, and in many cases they make a loss. Growers stay in business only because what they lose during the tomato season, they pick up in the off-season when prices are higher. By amortising their returns over the year, small growers are generally profitable. However, with at least another 6 hectares of glasshouse tomatoes due to come online in 2005, many small growers fear their slim profits will disappear.

HOW BIG IS THE AUSTRALIAN TOMATO MARKET?
The Australian tomato market can be divided into two segments – processed tomatoes and fresh tomatoes.

Processed tomato markets
Processed tomatoes are grown in the field. During the 2004 growing season, Australian growers produced 320,000 tonnes of tomatoes for the processing industry, an industry valued at $44.1 million at the farm gate (A$138 per metric tonne). According to the World Information Centre for the Processing Tomato Industry, the intensive use of drip irrigation in Australia (60% of growing area) considerably improved crop production by 23% compared to the previous season.

Australian processors are counting on an 11% increase in production to 357,000 tonnes during 2005 in order to satisfy domestic demand for processed tomato products.

Processed tomatoes were used to make a variety of products:sauces (50%), peeled canned tomatoes (15%), canned baked beans and spaghettis (10%), tomato paste/puree (10%), dried and semi-dry tomatoes (8%), soups (5%), and juice (2%).

Eleven growers (four major and seven small growers) and four processors share the processing industry- Cedenco (paste), SPC-Ardmona (canned products), Heinz (sauce, ketchup and paste), and Unilever (sauces and soups).

Fresh tomato markets
Nobody really knows how large the fresh tomato market is, although industry leaders agree hydroponic tomatoes grown in greenhouses represents a small part of the total fresh market.

Mike Nichol,National Marketing Manager for Flavorite Tomatoes, estimates Australian growers produced between 220,000 and 260,000 metric tonnes for the fresh market during 2004.

“We think hydroponic tomatoes would be around 10% of the total fresh market,” he said.

Hydroponic tomatoes grown in greenhouses represent the high-end of the fresh tomato market.The main products are high quality truss and large,single tomatoes.

In 2004,four major grower/agents shared the top end of the market – Flavorite Tomatoes, KOS Tomatoes (the Costa Group), Freshpak Victoria (also branded as Testarossa), and Moraitis Fresh. Around these grower/agents are networks of smaller growers, usually family-owned and run greenhouses under 10,000sqm. By representing smaller growers, the major grower/agents are able to build critical mass to supply large markets including supermarkets.

For example, Flavorite Tomatoes currently grow 160,000 plants,and represent a network of smaller growers who grow another 300,000 plants. Collectively, Flavorite sells an average of 200 tonnes of high quality, fresh tomatoes, per week or around 10,400 tonnes per annum.

To a large extent, recent industry expansion is being driven by the major grower/agents as they form strategic alliances to consistently supply premium-grade tomatoes to markets in the eastern states,all-year-round.

Unlike the processed tomato sector and many other fresh commodity groups,the fresh tomato industry does not impose a levy on growers to help promote and market the industry or undertake R&D projects to improve production. This may change as the AHGA works with Horticulture Australia and AUSVEG to introduce a levy for the fresh tomato sector.

THE FRESH TOMATO SEASON
Weatherwise, 2004 was a good growing season for greenhouse tomatoes with larger than expected crops. However, when summer approaches ,there is a mindset – salads – and prices plummet. Historically,the tomato season begins soon after Melbourne Cup weekend in early November.

In the southern states, most growers plant in July-August with production up and running in late October-November. Most grow the same commodity, a size 18 or 20 tomato that is popular with consumers and offers the best return to growers. However,by the beginning of December there is a market glut for high quality truss and single tomatoes and grower returns are significantly reduced.

“Prices generally don’t come back until just before Christmas, or just after,depending on the supply and demand,” said Victorian grower, Sue Korevaar, who is also President of the Hydroponic Farmers Federation, a network of small growers that combine their resources to promote their high quality hydroponic tomatoes.

However, recent greenhouse expansions in the eastern states,combined with the recent arrival of imported tomatoes from New Zealand, has seen the market dynamics change dramatically for premium-grade tomatoes with many small growers struggling to stay profitable. Sue Korevaar believes small growers will survive, but they have to grow smarter.

“When I started 10 years ago, there were a lot of grumblings by established growers that newer, more up-to-date growers would destroy the marketplace and erode their prices .It didn’t happen!

“What did happen was the consumer started seeing hydroponic tomatoes in their local markets on a regular basis, and they have learned about the benefits of hydroponic produce. They liked what they were eating,” she said.

According to Sue,market share grew from 3% to 4% of the table tomato pie, to what she believes is around 16% today.The actual size of the hydroponic tomato market probably lays somewhere between 10% and 16% of total fresh tomato production.

THE CURRENT MARKET ENVIRONMENT
During 2004, high quality, large single hydroponic tomatoes grown in greenhouses sold on the Sydney wholesale market floor between $6 (high season) and $15 (low season) per tray. Each tray weighs between 2.2kg and 3.4kg. Over-ripe trays sold for around $5/tray. The wholesaler/agent collects between 10-12% commission on the floor price. At the height of the fresh tomato season, consumers paid around $4/kg for large single tomatoes.

Between Christmas 2004 and the New Year, prices rose to $9-$10/kg for truss tomatoes, but by early January 2005 they had dropped back down to $7-$8 for a 3 to 3.4kg tray, where they languished through to February.

There are many reasons why prices dropped on the Sydney market floor during the 2004-2005 tomato season. Many small growers in the Sydney Basin switched from growing Lebanese cucumbers, which produced a poor return the year before, to tomatoes. It is likely some growers will switch back to cucumbers in the 2005-2006 growing season because of the low returns they received from this season’s tomato crop.

Although the mild weather conditions produced higher yields, it also brought with it low consumer demand. Imported high quality tomatoes from New Zealand was another factor that contributed to a glut in the fresh tomato market.

GROWER COSTS
Using medium-level technology and good management practices,production costs for an experienced small greenhouse tomato grower is somewhere between $2.00 and $3.00 per kg (between $6 and $9 per 3kg tray). Production costs include fixed and variable costs including wages,energy use, transport and fertiliser costs,which represent the major expenses for growers.

At the height of the 2004-2005 tomato season, growers broke even at best. However, in the low season, when prices are high,growers enjoy a reasonable profit. By amortising their returns over the year, small growers using medium level technology are generally profitable in the current market environment.

Many small growers operate roadside stalls to supplement farm income, with premium quality, large tomatoes selling anywhere between $4 and $5.50/kg. In some cases, farm gate sales represent 30% or more of total farm income, which often makes the difference between farm profitability or loss.

WHAT DOES THE FUTURE HOLD?
Sue Korevaar said that a positive to come out of current low prices is that people who have never bought hydroponic produce because of high prices will now try them, like what they try, and many will stay with the product when prices rise.

“Our market share will increase, consumer demand will increase, and the industry will be able to weather the influx of NZ tomatoes,” she recently told HFF members.

She said that small growers have to get smarter if they want to stay in business. She advises her members to talk to their agents, seed merchants, and other growers, and to look for a market niche by growing a different tomato variety. She encourages small growers to work together in an environment of “co-opetition”, a new buzz word where your competitor is your partner .It’s a concept widely practised in Europe and is gaining popularity in Australian horticultural industries, from promotional programs and pest management initiatives to supply chain and grower groups.

Over the next five years, Sue forecasts many small growers will drop out of the fresh tomato supply chain as corporate growers expand to have a greater share of the market, a trend reflected in other countries with developed greenhouse industries. She points to growers in the United Kingdom who switched to different tomato varieties when cheap Spanish tomatoes flooded that market in the 1990’s. Today, UK supermarkets carry at least 10 different types of high quality “home-grown” tomatoes that consumers can choose from, all grown hydroponically.

“For those who want to stay in the industry, they will need to find a niche market and work with other small growers to supply markets all year-round, even if growing the product is more labour intensive,” she said.

“A smart grower will say:’Hey, every hour I work, I pay my self; and that’s money in my pocket’.”

To remain profitable in the changing market environment, Sue offers the following advice to small growers:

– Change varieties
– Look for better tasting varieties
– Grow a different crop altogether
– Grow at a different time of year
– Reduce your commercial crop to supply local markets only,thereby reducing labour costs
– Reduce costs where practical
– Exploit niche markets as an individual grower or as a local grower group.
– Develop new packaging ideas that could fill a niche in the consumer marketplace
– Combine with other local growers to produce a product all year round
– Work to a business plan
– Consumer education
– Have you considered exporting?

Sue encourages small growers to calculate their production costs per kg carefully, no matter how painful.

“Historically, growers don’t include their labour costs, including working family members, when they should. Most owner-operated businesses generally don’t count the time for paperwork,” she said.

“Knowing your production cost per kg is the first step to turning your business around if the figures don’t stack up,” added Sue.

Coming out the other side of another tomato season, Sue says she is very positive about the future as more and more consumers are exposed to high quality hydroponic tomatoes and buy them on a regular basis.

In summing up, she said that small growers who want to stay in the fresh tomato business need to grow smarter to improve the bottom line,maintain a high standard of quality, keep increasing production per square metre, decrease costs where possible, look for niche markets, and to keep abreast of market trends.

“There is a bright future in this country for small growers willing to adapt to the new market environment,” she ended.

For further information contact:
Sue Korevaar, Hydroponics Farmers Federation
Ph:
Mobile:
Email: skw@peninsula.hotkey.net.au
Website: www.hff.org.au

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