Article

Operators monitor tomato supply

Tomatoes are still on the menu, but many operators have looked to Mexico to fulfill their supply needs.

March 7, 2010 by Valerie Killifer — senior editor, NetWorld Alliance

Even though an unusual cold snap destroyed about 70 percent of Florida's tomato supply in January, fast casual operators aren't making any moves to pull the product from their menus.

While restaurants such as Firehouse Subs are "closely monitoring" the situation, CEO Don Fox said no decision has been made to alter recipes using tomatoes or pull the product altogether.

Fox said Firehouse distributors have instead gathered tomatoes from a variety of resources and are bringing in more product from Mexico.

While tomatoes from South of the border are more ripe than what the restaurant chain typically uses, "we've been able to cull through those and find tomatoes that meet our standards," he said.

Though the shortage is costing Firehouse Subs operators a bit more, cost increase have not been passed on to restaurant customers, Fox said. And while the impact for Firehouse Subs has varied by region, customers at the company's 110 Florida locations haven't been inconvenienced by the price increases for the supply.

"In the end, the people who are going to feel the primary impact are the operators," he said. "It would be pretty rare for operators to pass costs onto the consumers."

Reggie Brown, executive vice president of Florida Tomato Growers Exchange, told theWall Street Journalthat the price of tomatoes has almost quadrupled over this time last year, with a 25-pound box of tomatoes trading for $30 vs. $6.45 a year ago. Prices should fall by next month once crops in the southern portion of the state are harvested, and the price of tomato-derived products should not be impacted, since California is the main producer for those products.

Until then, it appears most fast casual operators are turning to Mexico for their tomato supply.

Penn Station, for example, gets its tomatoes from US Foodservice, a company that is now turning to Mexico for its supply needs. Penn Station president Craig Dunaway said menu items have not changed, although some costs have increased.

Larry Reinstein, president and CEO of Fresh City, also said the company has turned to Mexico for its tomato supply.

Reinstein said tomatoes are one of the company's highest-volume items, and that the normal specification has become "out of control."

"If we had kept our normal 5 x 6 tomato spec, we would have been forced to put on a surcharge, which, especially in today's economy would not have been well received," he said. "We have gone to plum tomatoes from Mexico which are more expensive than what we normally pay, but probably only 50 percent of what our normal spec would be at this time.

"Most of our tomatoes are chopped so that makes it a little easier, though we are slicing tomatoes for sandwiches. The impact on customers is minimal at this point, and we have not made any other changes to menu items."

According to the Wall Street Journal, there is some concern among Florida tomato growers that even after their supply is recovered, restaurants will continue to use product from Mexico.

The Florida tomato industry is produced by roughly 100 farming operations spread across 40,000 acres of land, according to the newspaper. And the USDA calculates that the January freeze cost Florida vegetable producers about $300 million, with tomatoes generating about half of that total loss.

Food & Beverage