When An Heirloom Tomato Hits a Wall…

 

…it splatters, unlike the hard pink winter tomatoes from Florida and Mexico that I have played baseball with, literally.

Heirloom tomatoes started showing up at farmer’s markets as a response to the flavorless supermarket tomato. Heirlooms are now widespread. The challenge Red Tomato faced in 2005 was getting heirloom tomatoes to supermarket shelves.

But getting them on the shelf was only a first step: if heirloom tomatoes were to sit in a small, barely noticeable display on the supermarket shelf for the benefit of a few customers willing to pay a high price, well, that would do little for the growers involved. The greater challenge was turning the supermarket heirloom tomato into a steady, respectable mover—and that was about quality control; merchandising and promotion; and of course, price.

RT’s 2005 Proposal

Quality Control

We started with a couple of customers interested in offering heirloom tomatoes to their customers, and a few farms produce large volumes of great tomatoes, and set out to develop a product that would make everyone happy.

First, the tomatoes had to be harvested while still firm enough to survive a couple of days in transit and warehouse. We had to procure and deliver frequently enough to allow stores to turnover and restock the item every 2-3 days before they became too soft to keep on the shelf. This was in large part a challenge of logistics.

trader joes heirloom tomato (C)Red TomatoMerchandizing
With input from one of our leading heirloom tomato customers, we designed a package made of cardboard, with large windows on the top and sides (revealing the rainbow mix of colors!). The package was stackable—and that was the breakthrough. This package enabled store managers to display heirloom tomatoes just as they do most other items, stacked high and wide.

Pricing
At the start of the program, we worked the math backwards from the highest retail shelf price that would sell steadily, to the price payable to growers. It became the lowest wholesale price all 3 participating growers were receiving, but also the largest reliable volume they were selling to any one customer. Red Tomato and the growers agreed to go for it.

The Wall

The product was a winner, becoming a top-selling item for Red Tomato and a reliable sales outlet for growers. After a decade of steady sales and annual growth in numbers, in spring 2017, our heirloom tomato program hit a wall with one of our biggest customers. They had been steadily downsizing the pack size of their produce items to meet the habits of shoppers who were looking for smaller purchases, more frequently. “The wall” was also about the shrinking disposable incomes of Americans. Our heirloom pack was too expensive. It sold for $6.99 for 2.25 pounds, a competitive per-pound price for an heirloom tomato; but a high unit price for a single produce item. We were informed that our heirloom tomatoes were being cut.

While a challenge for Red Tomato, our growers had already planted their 2017 crop – there were plants in the ground, expenses already incurred. The stakes were high.

(C)Red Tomato; tomato plants

 

Our 2017 Response

We hibernated for two weeks in our virtual product development laboratory. Our packaging designer in North Carolina explored new, smaller, packaging options.

We redid our pricing mathematics, incorporating revised costs of logistics and packaging. We coordinated with the customer, the packaging company, the printer, and freight options, and looked to understand how a rush order would impact the cost of packaging. $0.23 or $0.27 a bag.

 

We were in regular contact with the growers: Can you pack into this bag? Will the tomatoes fit? How many bags will fit per mastercase? As the crop sized on the vine, we emerged with a custom one pound plastic pouchbag.

Confident that our solution was sound, we approached our customer and said: “We’d like another shot at it. Consider this proposal.” The head of produce was sympathetic to our (and our growers’) predicament; he was impressed by our rapid turnaround; and he was intrigued by the new product, enough to say yes. We have a green light to trial this 1-pound heirloom tomato item for 2017.

The Wall Has A Door

The heirloom tomato disruption of 2017 sent shockwaves through our organization. Team members in product management, sales, marketing and logistics were all involved in the rebound. Any solution has to work for farmers, customers, and for us at Red Tomato before we’re able to say: “YES! We’re bringing more local produce to more people throughout the Northeast!” Whether it’s a delicious, flavorful, colorful heirloom tomato or a more reserved bunch of cilantro, we work hard to find solutions for farmers.

The Heirloom Tomatoes Origin – Flavor

The notion that there is better flavor in an heirloom than a regular supermarket tomato isn’t romance. In his new book Flavor, Bob Holmes writes:

“The supermarket tomato is the poster child for the failure of modern agriculture to produce food with decent flavor.”

Holmes quotes a Florida horticultural scientist Harry Klee who’s spent the last decade researching tomato flavor: “Breeders have developed modern varieties that basically yield too much….Since 1970, the modern plant yields 300% more. That’s a lot…These modern varieties are literally sucking all the nutrients out of the leaves, and they still can’t get enough. So the modern varieties have…less sugars, less acid, everything. What’s in the modern fruit? Water.”