Almeria needs tomatoes

• María Del Carmen Manjón, Sales Manager – Chain Account Enza Zaden
• José Manuel Fernández, Director General Vicasol
• Alberto Cuadrado, Chain Manager Rijk Zwaan Ibérica
• Juan Jesús Lara, General Manager CASI
• Rafael Salinas, Tomato Product Chief Syngenta
• Enrique de los Ríos, General Manager UNICA Group

The tomato sector in Spain is in a complicated situation, none of them hide this reality, however, the available tools invite us to face it with optimism, aware of the effort required in the long term and the need to continue working more closely than ever between all the links in the chain.

The challenges affecting tomato are cross-cutting. The work against the rugose virus and the importance of resistance, environmental and climatic restrictions and the need for generational change in production are factors that directly affect the profitability and sustainability of tomato growing. Seed innovations and variety research are therefore crucial to maintain the competitiveness of the product.

The difficulties arising from international competition, especially from third countries trying to displace Spain in the European market, are discussed. The lack of support from the European Union and the existence of unequal regulations for European and foreign producers further complicate the situation.

Competition with Morocco and other international producers poses an additional challenge, with significant impacts on profitability and market stability. This article analyses the strategies needed to differentiate and compete effectively in a global context.

The importance of increased communication and collaboration between the different links in the supply chain is highlighted as a key factor in strengthening the sector and stemming the decline in consumption. It is important to provide value throughout the entire supply chain, from seed innovation to marketing and meeting the needs of the end consumer.

With this report we present a snapshot of the national tomato, allowing the reader to understand the critical issues that will define its future.

Topics:

1. Photography of the sector
2. Volume or speciality against Morocco
3. Seeds of value
4. Competition and rugose
5. The varietal challenge on the shelf
6. Consumers and communication

Photography of the sector

E. de los Ríos: In Spain we have a great common good which is the tomato, it is the main vegetable in the consumer’s shopping basket in terms of value and, together with pepper, it heads the volume sales of Almeria. As far as its evolution is concerned, I believe we are in a complex situation because we are a consolidated value but we are under attack from third countries who want to displace us and enter the same niche in Europe. Unfortunately, the EU is not doing enough to defend the European tomato. There is no linear positioning and defence of our tomatoes in Europe. The reality is that there are different compliance standards, some for European producers and others for third countries.

In spite of this, tomato is of great importance and has a very interesting future, it is a product that is boiling hot. No other vegetable is so versatile and evolves so quickly because every year many varieties are tested. There is a lack of communication between us, the members of the chain, the main actors to strengthen the sector.

Mª C. Manjón: We, as a seed company, now have an objective, the fight against the rugose virus. Almost all the breeders are immersed in this challenge, contributing varieties that can help to mitigate this virus, as has happened with others. We are not forgetting other lines such as the work within the abiotic stress tolerance line and we are not forgetting to improve characteristics that meet the expectations of the last link in the chain, the retailer and the end consumer. Although we are a biotech development company that allocates most of its resources to agronomic demands, the end of the chain is increasingly incorporated into our decision-making.

Right now, from our point of view, the market needs a solution to the virus that is affecting marketing, product quality and agronomy. A paradigm shift is taking place, probably the varieties that have been worked until now will not be worked in five years’ time.

J. J. Lara: I think we are in a period of transition, both in terms of genetics and production as well as consumption. This period is going to be key in the coming years because a future is being defined where the demands of consumers and growers must find a joint path to achieve the tomato of the future. I think this is positive because it is going to provide us with a quality, production and profitability of products that we don’t even know about right now. And the varieties we have now, in the next three or four years, are not going to be the same, they are transitional varieties because the seed companies are working flat out to find urgent solutions.

But I am also very concerned about the governmental decisions in Europe. It is clear that we are playing in an increasingly global market and we need protection from these European bodies from the threat of third countries. I have always asked a question that I consider fundamental: are we prepared to make our food sovereignty dependent on third countries? The European consumer does not know that the growth in imports over the last 10 years has led to a drop in production, particularly in Almeria. There is a major challenge here that we need to address.

A. Cuadrado: In fact there are challenges that are transversal to tomato, such as the case of the rough tomato, because it is practically everywhere in the world, to a greater or lesser degree. It is a challenge that we seed companies are facing and we have given priority to solving it. Between now and 2025-26, most of the segments and cycles will be covered by varieties with resistance.

We have experienced the appearance of many viruses, such as the spoon virus, which is going through a process of transition, of varietal renewal of the portfolio. Our policy is to incorporate resistance in all varieties. On a commercial level, we are also in a process of change. Before there was a balance, a status quo, with Spain and the Netherlands as the main supply hubs for the large purchasing centres in Europe and this is gradually being diluted. The Netherlands produces in winter, we want to produce in summer, Portugal produces a little and Morocco wants to go everywhere. Spain has to know what its cards are, how it can differentiate itself, what its value is compared to other production areas. And there is no magic solution, you have to analyse the market, segment by segment, and find out where you can be competitive.

And then, the consumer will vary, as he has always done. I would start by analysing what the consumer wants today, because maybe we don’t analyse it in detail together with distribution. For this work, you have to approach distribution and talk to them directly and say: Hey, how can we do it?

J. M. Fernández: Focusing on tomato from Almeria, I think it is in serious difficulties. We have had two years where it has seemed to be improving but this is not true, we knew that this bonanza would pass. We have been growing various types of tomato for many, many years and the kilos per metre, instead of increasing, are decreasing. Therefore, we have not been able to evolve either in terms of seed production or in terms of crop management, the reality is that we have not gone any further. I would say that we have gone down, mainly due to the diseases and pests inherent to this crop.

There is a reality, when quality is equal, the consumer always opts for the cheapest product, the market is implacable, and on top of this we have been presented with a serious competitor, Morocco.

In the short term we will be able to defend ourselves but if we are not able to make a leap in productivity, we are going to have a major problem.

R. Salinas: Tomato and, above all, the growers, are facing a series of increasing challenges. On the one hand, the economic challenge of making production profitable, the environmental issue, more and more restrictions on the use of phytosanitary products or nutrients, water? On the other hand, there is climate change, which we cannot forget. This factor is causing the cycles to become shorter and shorter, between the fact that we are planting later and the production window is getting shorter, because in many areas we have lost up to two months of harvesting. Those months were many kilos per square metre. Another challenge to bear in mind is that we are producing under increasingly adverse conditions.

Something that growers will also experience more is the social challenge. In other words, tomato, like any other vegetable, is also facing the need for generational replacement. Looking to the future, this could be a great differentiation. In other words, how the new grower, let’s say a young grower, is tackling his business in an entrepreneurial way, moving from a family farming model to a business model. This is a great challenge for tomato and for all vegetables.

As far as the Spanish and European markets are concerned, I would like to emphasise the communicating vessels, in other words, in the last two years there has been a certain bonanza in areas such as Spain because of the energy difficulties they have had in Northern Europe. These movements are impossible to predict. This does not help anyone in the sector when it comes to planning. But if this is the reality, our role is to try to find the most profitable and productive varieties that can withstand all these situations we are talking about with new pests and diseases. Those that exist and let’s not forget those that will come, which are already knocking at the door.

Volume or speciality against Morocco

J. J. Lara: This duality that was raised a few years ago is not a reality. Morocco started with salad tomatoes, a large volume product, and gradually diversified towards smaller cherry-type sizes, and today they produce approximately 50%-50%. We are losing our leadership. We have to continue producing volume because in the end this is what generates profitability, both for our cooperatives and our growers, so we cannot diversify the entire portfolio into high value varieties. What’s more, there is not enough demand in Spain if we were to produce all the high value products, neither in Spain nor in Europe. It is clear that we have to diversify production, we are supplying very diverse areas of the EU, which have a high level of consumption and a purchasing power that has risen enormously in recent years. This mix is the objective, but with the other 50% of the products we have to continue to produce volume.

E. de los Ríos: When you lose a strategic position, you lose it forever and for everything. When the Canary Islands removed tomato, it was completely removed. Murcia, it has practically been removed… And when we have a problem, we cannot go to our competitor and ask for our space back. So there is no dichotomy between commodity and value. You have to produce something that is profitable for the farmer, that rotates on the shelves, that provides value, that the kilos produced per square metre are paid fairly with the costs and that the farmer is left with something reasonable. So, I prefer concepts such as the mini-cucumber, which is attractive, rotates, sells and is consumed a lot, everybody is happy. Therefore, we must not leave anything to Morocco, no protagonism in terms of commodity or value, if we leave the door open, they are going to leave us with nothing.

J. M. Fernández: When the market is free and there is freedom to produce, everyone tries to do what is most profitable. I think that, at the moment, Morocco has more capacity to make these value specialities than we do, because they are labour-intensive.

Therefore, we have a complicated competitor because it has an advantage in a fundamental component, which is labour and, moreover, abundant and cheap labour, which is scarce and expensive for us. It is very difficult to compete with them, but we have to do it. Almeria needs tomato.

I am optimistic because we have always been able to compete and get ahead, but we cannot do without tomato, nor the commodity, nor the specialities. We have to keep on fighting.

Mª C. Manjón: The labour problem in the Netherlands is much more complicated than the one we have here and we should take them as an example of how they are mechanising, robotising. The issue of artificial intelligence, although we see it as a long way off, is already here. We have the task of improving and modernising the facilities because we are facing a tsunami and all this has to be incorporated so that, as Jose Manuel says, farmers don’t stop producing high value tomatoes because of a lack of personnel.

A. Cuadrado: I would like to add, to put into context, some data on the value of the tomato shelf and what it represents. In Germany alone it represents 2,000 million euros; in France, 1,200, in Spain, 1,100 and in the United Kingdom, 1,000. In other words, we are close to 6,000 million in tomato on the shelves. Under no circumstances can we give it up. We have to look for ways of not letting tomato go to other production areas.

Seeds of value

Mª C. Manjón: As breeding companies, when we put a product on the market we seek to add value to the whole chain, we have evolved a lot in recent years to understand all the needs and provide the end consumer with a solution. We are now facing viruses and climatic conditions that can be tackled from the seed and that provide an alternative to the current context, agronomically, and that is profitable for the farmer, has a long commercial life for the cooperatives and, at the same time, has flavour. With all this we add value to the chain, although this work is constant, it does not stop because change is also constant.

A. Cuadrado: I totally agree, and I would like to add that we need to analyse what our competitive advantages are. We must also think about service throughout the entire distribution chain, for distribution is something we have to work on. Service today is in the security of supply and distribution sees it with the supply shortages that have occurred in several markets in recent months.

In Spain, where we produce all the tomato segments, we are perceived as a player in the world, service goes beyond the fact that a particular segment is much cheaper in another area, we have to think about putting ourselves in the shoes of distribution and making it easy for them. From the seed companies and from Rijk Zwaan, our varietal commitment is to offer valuable seeds for all segments. For us, tomato is central and we demonstrate this at congresses such as Tomeet where we bring together the whole chain to come up with the best solutions.

R. Salinas: I believe that the image of Spanish tomato in Europe is strong and consistent, and this is also an added value for customer confidence, that security of having the product and not only having it in quantity, but having it with the quality that is expected, is also an important asset for the growers, for the cooperative, even for the country.

I do worry that the high level of diversification that we have achieved in Spain and which has opened up many market niches, now with the rugoso crisis, may have consequences that could lead to their loss due to the varietal change that is taking place, as well as the fact that there are no immediate solutions for each and every one of these niches. But I am convinced that it will only be a matter of time before all the seed companies make all this diversification available to farmers again. The whole chain has to work on this so that we don’t lose our place.

J. J. Lara: Each link in the chain, from the beginning to the end consumer, is trying to give value where it can. In our cooperative, the majority of farmers are looking for quality and profitability. In the case of tomato, we can talk about many varieties, but in the end, what the farmer wants is to produce a product that is profitable and that this is passed on to the whole chain.

E. de los Ríos: I would like to add that the farmer has an equation that is always present, to obtain productivity, kilos per square metre, of a certain quality, which has to be paid for on the market at a certain price and from this you have to take the costs out and maintain it over time. That is the value for us and for a cooperative.

J. M. Fernández: We have many tomato references that the farmer can choose to grow. They always try to grow varieties that they feel comfortable with and that they believe can be sufficiently profitable. From here on, the market has its price and that is the way it is.

We are always talking that we should do things differently in order to get more value. But how else, someone explain to me how, because I don’t see it clearly.

Competition and rugose

J. J. Lara: The type of production in Almeria is so special that the rugose virus has not been a limiting factor when it comes to tomato production. The fear that farmers have of planting this new variety with resistance is due to the lack of knowledge as to whether they produce the same or not, whether they are of the same quality or not, it has been more of a brake than the virus itself. Many of our farmers have preferred to keep what they have, to take the risk and if I am going to have the problem, they assume the loss of 15% of their production.

E. de los Ríos: The three producing companies that are here are united against rugoso. Our technicians meet and talk. And we share information, we are competitors, yes, but we are aware of the big problem we have and the common objective is to solve it. It is true that it has not attacked seriously, but we are aware that it could be worse and we have to be very prepared.

The great luck we have now is that large-scale retail values the food safety we offer very highly. And here we have three tomato giants who produce around 70% of Almeria’s crop. And we also have seed companies that now have much more technological power through tools such as genetic markers, artificial intelligence, CRISPR, to be able to develop varieties much more quickly. We are integrated with large-scale European distribution. So we are now better able to solve the problem of roughness than we were years ago without affecting marketing.

J. J. Lara: Since the last meeting in which the three cooperatives coincided in a tomato meeting, the word unfair competition with Morocco should be deleted because, whether we like it or not, it is just another player, we have to start to realise that there is not going to be any regulation to defend our product.

J. M. Fernández: The virus is directly attacking tomato production and this is reducing the profitability of our farmers. This situation is going to continue for a long time. As far as the market is concerned, we have to be able to overcome it, nothing is going to change and we have to continue to play by these rules.

The varietal challenge on the shelf

R. Salinas: From the seed companies there are things that, obviously, we have to be attentive to and we have to collaborate with the whole chain, from production to distribution. We are not forgetting the challenge of labour, we are looking for new products in some types that were very small, we are trying to make them bigger. In others that were harvested loose, we tried to do it in branches. In varieties that produced up to a certain temperature level, we tried to make them flower on short days, so that we would not lack production in winter.

And, obviously, in addition to all the level of resistance, the extra quality that is expected because of the image that Spanish growers have in Europe, as we mentioned before, because if we didn’t have this image, we would have been totally erased by now. If there wasn’t an image of quality, confidence and security, we would already be out. In addition, we are working with growers to reduce production costs by increasing kilos, sizes, yields, resistance and the product’s capacity to adapt increasingly better to Almeria’s uniqueness, which requires us to make a greater effort to adapt to each area.

In all types we will have to increase the flavour, growers are asking us to do this and we can also see it in the demand from supermarkets. But I believe that our product also has to differentiate itself, something you are already doing, it is a product that is ripened on the plant, it is a product that needs a very long shelf life, it is not picked green.

As far as quality is concerned, we can also talk about different aspects and I will start with shelf life, the product has to have a commercial shelf life. It has to be post-harvest, because supermarkets are already working with a demanding rotation, i.e. I take it away after two/three days and this is not profitable for anyone. This has an image and a value, which comes from the work of seed companies that listen to the chain and I believe that we have to continue to work along these lines.

A. Cuadrado: I agree with Rafael, I believe that in order to be competitive, we cannot stop innovating, but we have to ensure supply, resistance to all the diseases, those that exist and those that will come. Also hardiness, perhaps we don’t have to look for the best variety for a very specific transplanting date and area but rather look for the one that behaves best in different circumstances, which is sometimes the success of many varieties.

As far as the consumer is concerned, you have to understand the category well, what tomato is on the shelves, how to present the specialities. I think we have to segment and see exactly where we can be competitive with the tools we have.

What we have to be clear about is what value proposition Spain wants to make. Whether it is more kilos, more shelf life or perhaps more flavour. But that mix is difficult to combine, to put it all in the same place, together with the quality perceived by the consumer. That is why we have to ensure flavour, that it is something very solid throughout the whole season, and this is achieved with good planning and we are seeing how the cooperatives are increasingly fine-tuning this work.

J.J. Lara: For us, this year is the first time that I have seen the large chains or supermarkets aligning themselves a little more with us. They have asked us a lot about what varieties we are selecting, what we think it is going to be in the future and they have done trials in shops and laboratories in various countries. They have realised that having 20 types of tomato on the shelves is confusing for the consumer, they are realising that they are losing tomato consumption, the future lies in this communication.

E. de los Ríos: I, look, as I was saying before, I believe that seed companies used to look for the messianic variety, which lasted a long time. However, all that has gone. Now we are focussing on varieties that will function for a while, I believe that the future will be like this, for example, a pear tomato that the farmer is happy with, with profitability and a chain that markets it smoothly, that is the future.

Now that we have such a close relationship with large-scale distribution, there is no need to make singular varieties, but rather that they fulfil their specific role for as long as they have to. And then the context will change and another context will be found, because now the seed companies have the capacity to bring them out.

J. M. Fernández: Personally, I find it confusing to go to the supermarket and see so many varieties. I don’t think it adds anything. It is true that if you offer the market something better, the chains listen to you and are capable of developing the product with you. We have to work together to give the consumer what he wants.

I have only been in the tomato business for 12 years, you have been there longer, but it is true that when I entered the sector there was a lot of demand for speciality produce, the price of volume types at that time was not very competitive. In this situation, specialities helped and still help to relieve some of the pressure on the market, diversification increases market niches and consumption. In the last few years, we have seen how some specialities have had a hard time keeping up. But we are working to bring volume and less need for manpower.

In a very mature market like ours, when it starts to become saturated, diversification helps to counteract it. We have to work the whole chain together to serve all the market niches, which is what it is all about in the end, because these initiatives increase the consumption of the products. In AECOC we were presented with data on fruit and vegetable consumption among young people which greatly reduced the consumption of older generations, future buyers have reduced their consumption, so these are the situations that we have to face together in the sector.

Consumers and communication

J. J. Lara: We have our work cut out for us, consumption has fallen, but people’s tendency has changed to different, smaller tomatoes, which weigh less than a large tomato, and this means that in the end the shopping basket per year/kilo/person, tomato consumed, has gone down. And this means that in the end, the shopping basket per year/kilo/person, tomato consumed, has gone down. Is it going to continue to go down? Everything points to the fact that it will and marketing actions will have to be taken to improve it. But I think that, at supermarket level, the focus will be on not having 60 tomatoes for 60 uses. And this would help us to encourage the consumer not to get mixed up in these habits either. I am optimistic, I don’t think that in the short term the tomato will change its situation very much, but we must work to improve it.

A. Cuadrado: I am going back to the panoramic picture, consumers in the five countries I mentioned earlier spend six billion euros buying tomato. Whether it goes up or down, there is a base that we have to take care of, but of course there is a future. There are consumers who have no limitations when it comes to buying tomato, there are others who are very cautious. A statistic in Germany showed that 40 or 45% of consumers are cautious, they have money but they are very careful, so the proposal has to be very fine-tuned.

E. de los Ríos: Sometimes, the consumer is very far away from us and our pie is shrinking, that’s a fact. Moreover, within our pie, our competitors are strategically better at acting than us, both Morocco and the competition from the ultra-processed products. We are aware that we have the great common good of fruit and vegetable consumption in Europe, I would like us to do something similar to the campaigns that these products are doing, with a united sector. We have to ensure that consumption doesn’t fall and then everyone can do their own internal marketing as they have to. But we can’t reach an agreement, we are so competitive that we don’t realise, even when we have the common good in front of us, that we don’t have to compete here. In that sense I am a pessimist, or a realist, I don’t know.

J. M. Fernández: As Enrique says, we production companies don’t manage to make big communication campaigns. I think we don’t do more communication because we don’t trust the result. It’s a reality, we don’t do enough, we have to improve. We have to be able to communicate the goodness of our vegetables to the consumer.

Mª C. Manjón: The cost of not acting is much higher and the result is uncertainty, the sector has to realise that competition is growing and positioning must not be lost. I am not saying that we do nothing, we do little. An example of this could be the Canary Island banana, which has its own particularities, but the communication work that has been carried out over the years has allowed the consumer to associate it with quality in more complicated times.

E. de los Ríos: To give you an example, Zucchiolo has surprised us a lot because practically without marketing, it has been a boom at European level, because it is different. People want innovation, novelties, marketing has that magic that, if you touch the right key, it explodes. And with a small investment, we have had an incredible result. Regarding the sector, we have to adjust to our possibilities, in the end it is about being constant, neither spending millions nor doing the minimum.

A. Cuadrado: I would like to give as an example the case of the Sweet Palermo pepper. Where, hand in hand with producers and distribution, we are reaching the consumer with very well thought out actions. This works when there is this triangle (seed company, producer, distribution). The response we received from a supermarket was that turnover had increased and that, of the total, 40 or 50% of consumers had not tried the product. I think this information is extremely valuable and did not involve a large investment.

R. Salinas: More than my point of view, I would like to ask about the products and their nutritional value, because nowadays we have a tomato with a higher nutritional value, can this be attractive for new consumers? As we are discussing a generation that is more health conscious and health conscious, for example the explosion of the protein shake, do we see a future for this line, do you have requests from supermarkets, and what about young people?

E. de los Ríos: I find it interesting that Rafael, my point of view, is that rationally the main advantage of eating vegetables is that you don’t eat the ultra-processed stuff. What happens is that giving a tomato or a pepper the bonus that it has a little more lycopene or the nutritional information does not have so much appeal because you already have the qualifier of being healthy. However, we fruit and vegetable companies are so stupid that we allow the ultra-processed food lobbies, for example, to advertise themselves boasting about vitamins, but not fruit and vegetables, because European legislation forbids it.

J. M. Fernández: From my point of view, the issue of young people is very worrying. Vegetables are difficult for them to consume and we have to find a way to make it easier for them to eat them. Young people want ready meals, easy to eat and we have to give them exactly what they want. In the United Kingdom, you will have seen how fresh produce is occupying less and less space on the shelves and, on the other hand, the space for prepared food is growing, it is what people want, so we will have to try to be in that prepared food, in other words, we will have to use strategies to reach the consumer’s decision.