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Tomato prices retail at 8 cents a kg
Positives to take from this promotion
Last week tomatoes received a lot of free media coverage thanks to a large supermarket chain retailing large truss tomatoes for 8 cents and 9 cents per kg for one day each, in two separate store locations. The promotion has been in fact a genius move by the supermarket chain. The extent of free prime time advertising it’s received is phenomenal. Obviously, it was a stunt – some growers may have been offended or upset by this promotion, but on reflection I see the positives that have come from it.
Obviously, these tomatoes were retailed far below the cost it is to produce them, this was a loss leader strategy by the retailer, which involves selling a product or service at a price that is not profitable but is sold to attract new customers or to sell additional products and services to those customers. Whether a supermarket has organised a special one off deal with a supplier or they have decided to accept a loss on these one-day promotions is totally up to those individual companies involved as long as no laws were compromised. It was also the perfect opportunity while tomato market prices are at rock bottom. Are they likely to do offer the same deal in the winter NO-NEVER? So again, unless any laws have been broken, it should be seen for what it is – a very intelligent well-orchestrated promotion that was gobbled up by the main stream media. The amount of ‘free’ coverage the supermarket chain received will have far outweighed any loss they suffered from selling tomatoes for 8 cents per kg and let’s not forget the new customers they would have attracted.
Increasing the consumption of tomatoes is very important and we know for the domestic market to do so we need alternative advertising and promotions of freshly grown local tomatoes. Fresh tomatoes are extremely versatile. They can be used in all sorts of different dishes – sandwiches, salads or baked, drinks, sauce…… I could go on forever. One customer that purchased tomatoes for 9 cents per kg said they were going home to make tomato sauce. I thought it was great a shopper was going to make sauce from fresh tomatoes instead of the option to purchase imported or processed tinned tomato sauce.
I believe the amazing amount of coverage may well have ended up helping sell more tomatoes across the board. It would be very interesting to know if retail sales of tomatoes increased by volume last week. If it did, we should be congratulating the master minds behind the promotion not blasting them. Even if it didn’t increase sales it certainly gave our industry the opportunity to talk about our wonderful product to the largest audience possible and for that I am grateful.
Farm gate prices have been very low, many growers are frustrated and are selling below the cost of production. This is a reflection of many unfortunate circumstances including the most glaring debacle- disruption to exports and the lagging effects of Covid-19. I hope an end is in sight and we can get back to being profitable very soon. New challenges may push some growers into looking for new opportunities but for those that ride the storm I hope the rewards will be forthcoming but some strategic planning will be necessary.
Article written by Stefan Vogrincic
All Article’s checked and edited by Marie Vogrincic
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