New Zealand tomato market pricing has been volatile in 2016, according to T&G Global commercial manager for covered crops Anthony Stone, and the sector's main export market Australia has had a complicated year as well. He says improved quality across the Tasman Sea and Australian retail's focus on locally-sourced produce has led to less dependence on imports, prompting companies like T&G to assess alternatives.

"Probably around 5-10% of New Zealand’s total production ends up being exported. Probably half to three quarters of that goes to Australia, but that’s reducing," Stone tells www.freshfruitportal.com.

He says this means T&G has had to look further afield with its export programs, especially into Asia and the United States.

"We can seafreight into Japan and hopefully in the not too distant future we’ll be able to do that into the United States," he says.

"We can seafreight to Japan – it’s a nine to-11 day program. A tomato can actually last long enough so that it gives retailers or the people dealing with the product at the other end a good week or two to clear the stock quite quickly.

"The problem with the United States is that it’s just that little bit further, and that’s the western seaboard. The eastern seaboard is a whole other challenge altogether from seafreight."

Anthony Stone

T&G has been working with Plant & Food Research to see how fruit can be shipped more effectively to extend shelf life and maintain quality, but Stone doesn't believe seafreight tomato shipments to North America will be feasible by this Southern Hemisphere summer.

"But we will be airfreighting and we try to lock up as much airfreight space as we can, usually from late November to early February.

"That's usually the window - the other challenge with that period is it’s the Christmas period when airfreight is at a premium."

He says while these volumes might not be large by the North American market's standards, they are considered big for New Zealand.

"And it sits nicely in our window of when we’re at the maximum of production in the middle of summer," he says.

"Also we airfreight to North America which is not ideal in the long term, but we can get stock there very quickly, very fresh, and it certainly competes well enough on the local market very well in quality versus what they can get in the Mexican season."

Stone emphasizes the Japanese market's high quality expectations, especially when it comes to the sweetness of tomatoes.

"Japanese customers and consumers are probably some of the hardest to sell to. They have very strict standards about product and quality and where it’s come from - you will always get visitors from Japan to your premises well before they agree to production.

"But they also have a sweet tooth over there with respect to fruit, and they very much like those sweet varieties - we grow those sweet varieties and increasingly so," he says, adding that while this is the trend, T&G still has the majority of its tomato production in the large loose variety space.

"In Japan they’ll very much seek out tomatoes that are brixing 10 plus, which is the small grape-type tomato - certain varieties, not all of them."

He says the T&G team is "pretty confident" there is enough demand in Japan to buy as much as the company can supply.

"As much as we can make available we can pretty much get into Japan. The question is is that economically viable versus selling in the domestic market, but it’s very much a work in progress.

T&G Global's acquisition of Great Lakes Tomatoes and Rianto Limited late last year has allowed the company to ramp up its varietal conversion, even though these two operations focus on larger tomato cultivars and continue to do so.

"Moving into the future, now that we own those production sites we can 100% rely on that large loose and Truss tomatoes which is what they both grow," Stone says.

"As a result of that it enables us to change our crop mix a little bit on our existing three sites that we already owned into some grape-type, specialty type products.

"It also gives you more flexibility around ensuring we don’t grow multiple varieties in a particular crophouse. We're growing one variety in the same crophouse which is the more efficient way to go...for us having the extra hectarage allows us to be more simplified with our crops."

Domestic market challenges

As winter wears off and light levels start to increase, so too will tomato production in New Zealand. For Stone, the key issue in the coming months is to heavily promote and raise awareness about the extra supply.

To understand what the sector is facing now, he puts the year so far in context.

"The visibility I’ve got is there have been some shortages across Australasia, primarily due to weather events along the east coast of Australia," he says.

"Usually every year we import Australian tomatoes into New Zealand; not a lot but just enough to fill a little bit of the void through July, August, September.

"So this year because of the weather events over there kept prices high because of the low supply, not as much came into New Zealand...in fact it came in very late."

He says this dynamic kept prices higher year-on-year, but that didn't last too long and now they're "on their way back down again".

"Even though this winter’s pricing in New Zealand was very high compared to prior recent years, through March and April this year we were actually at record low points, so it’s been a real year of record high and record low prices. It's been very volatile.

Stone says growing tomatoes is a bit of a balancing act between getting the right mix of yield and flavor, while also having consistent supply to meet retailer demand.

"Everyone has a false conclusion that growing in a greenhouse removes all the weather elements. It doesn’t entirely  - it’s certainly easier than outdoor cropping but you still get issues around light levels and heat," he says.

"When you have days when it’s bright, then the clouds come in and then it’s bright again, just keeping the temperature is an ongoing challenge.

"An extra 1% of light can give you an extra 1% of production – whilst it’s not a perfect formula, it’s a rough guide, and on average over a period of a year you’d expect to have the same amount of light this year as last year, so it generally balances itself out."

He says heat is also easy to manage in greenhouses if it's relatively constant, but similar to light variability, a "four seasons in one day" scenario when temperatures fluctuate greatly can be a challenge for production.

This year though T&G Global has been fairly fortunate on that front.

"We’ve had a very good growing year this year – the quality is very good, we’re very happy with the production volumes, but that’s as a result of a lot of hard work and a lot of research," Stone says.

"As the light levels in the day start to get longer the production will come on quite quickly, so through September and October the volume really starts to spike.

"You might typically have two shoots or two laterals on a plant –as the light starts to increase you can increase a third lateral, so you’ve effectively got three plants from the one seed and volume almost increases exponentially with the increased light."

This is when the importance of retail promotions comes to the fore.

"The problem there is that often consumers mindset is often that tomatoes are expensive because that’s what they’ve seen in the winter even though the prices have dropped, because they haven’t looked at prices. So you get a kind of a backlog of supply.

"What’s important is that as the extra volume comes on is that you promote your way into the new harvest, to make sure the retail price comes down and that consumers know that prices are lower."

Another key element of T&G's tomato sales strategy, and an issue affecting traders around the world, is educating consumers about the wide varieties of tomatoes available and how some of the more flavorful tomatoes have lower yields than the commodity large loose cultivars.

"So while that might taste better, if you yield 10-20% less than a Merlice (typical large loose) variety, if you’re not extracting at least that extra value to pay for the extra cost, then again it’s not worthwhile.

"So we’ve got to be talking to consumers in New Zealand and overseas about the benefits and what’s so good about different varieties and the taste characteristics of tomatoes.

"All varieties really are different, but often I find consumers – overseas but certainly in New Zealand – they actually don’t understand tomatoes as well as what I thought they might. It’s really large round tomato red, and small cherry tomatoes, and that’s historically been their understanding."

To raise this awareness, T&G undertakes sampling efforts in supermarkets, as well as promotions online and through social media.

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