Tomato Shortage Causes Trouble for Restaurants

By Griff Witte

It's been a rough few months for tomatoes.

They've been swirled in California floods. They've been smashed by Florida hurricanes. They've been picked at by Mexican bugs.

The result has been a national tomato shortage that has sent prices climbing like a vine seeking light. With costs up and quality down, some national restaurant chains are reconsidering their marketing strategies to keep the thought of juicy, tender tomatoes off customers' minds, or switching recipes to make up for the absence of certain hard-to-find varieties.

The popular Juice Joint Cafe in Northwest Washington, meanwhile, has at least for the next few weeks become a tomato-free zone.

"The quality is terrible. They're picking them early because there's a demand," co-owner Tom Holland said. "They're green. They're hard. They have no tomato flavor." And they're not cheap: A 25-pound crate of tomatoes would cost Holland $46.50, more than double what he is used to paying. He concluded that it wasn't worth it to leave customers to choose whether they want to add cucumber to their sandwiches to fill the void.

The tomato shortage began in October and is expected to continue into next month. Many in the produce industry expect the next two weeks to be the worst yet as any remaining supply is used up before a new harvest can replenish the market. By the time it's over, it could be the worst shortage since a frost knocked out much of the winter tomato crop in 1989, said Gary Lucier, an Agriculture Department economist. "About a third of the tomatoes that we'd usually see are actually coming to market," Lucier said.

A nationwide shortage of tomatoes has put foodservice operators in a pinch, left to decide whether to raise prices, swallow four-fold higher costs, or seek alternate sources of supply.
The cause? Rotten tomato karma.

"It's a triple whammy," said B. Hudson Riehle, senior vice president for research at the National Restaurant Association. "You have had the impact of hurricanes in Florida concurrent with the fact that California has had unseasonably high rains. And in the Mexican market you have had some pest problems. So you have the confluence of these three isolated events putting pressure not only on availability but on price."

Tomatoes at the point of shipment have been selling in recent days for more than $1.20 a pound, four times what they cost this time last year. The average U.S. consumer demands 18 pounds of fresh tomatoes a year, according to the Agriculture Department, so restaurants and grocery stores face the unappetizing choice of raising prices or covering the higher cost themselves.

Safeway supermarkets spokesman Gregory A. TenEyck said the chain is resisting higher retail prices. "We try to absorb as much of the increase in cost as we can. But inevitably the consumer will see an increase," he said. Tomatoes, he said, cost about 10 percent more than they would have without the shortage.

TenEyck said the chain is relying more on hydroponic or greenhouse tomatoes to meet the demand. Normally Safeway's inventory is evenly divided between vine-ripened and hothouse tomatoes, but now nearly 70 percent come from greenhouses, he said.

Prices aren't rising at Red Lobster or the Olive Garden, but both chains are taking Roma tomatoes out of their dishes, substituting a different variety that hasn't been hit quite as hard by the shortage. Mike Bernstein, spokesman for Darden Restaurants Inc., which owns both chains, declined to identify the new tomato "for competitive reasons," but he said that only true connoisseurs can taste the difference. "Most guests in our restaurants around the country won't notice the change," he said.

At Wendy's International Inc., the company reported recently that high tomato prices will cut into fourth-quarter earnings. To minimize the damage, the fast-food chain has altered its marketing strategy. Wendy's had been planning to promote its Chicken Temptation sandwich in October, but scrapped that plan because the sandwich includes a large slice of tomato. "What we didn't want to do was show a national advertising campaign with a juicy tomato and then have problems with supply or quality," Wendy's spokesman Bob Bertini said.

Instead the chain featured its new kids' meal and its chicken strips.

Ray Gilmer, spokesman for the Florida Fruit and Vegetable Association, said tomato prices should begin to ease in December as farmers whose fields were devastated by repeated blasts from hurricanes manage to get their crops to market. Most farmers, he said, had to start from scratch after the summer storms. "The hurricanes blew through and pretty much destroyed the fields," he said.

The domestic tomato industry produces 3.5 billion pounds of fresh tomatoes annually, and 2 billion more are imported, according to the U.S. Department of Agriculture.

Tomatoes weren't the only agricultural product damaged in the hurricanes, though their loss has been felt most acutely. Prices for bell peppers and cucumbers have also gone up, though both are less in demand than tomatoes. The hurricanes extensively damaged citrus groves, but Gilmer said much of the Florida citrus industry is devoted to juice, of which there was already a large supply in reserve.

Tina Fitzgerald, who buys produce for the sandwich chain Subway, said she foresees a difficult two weeks ahead as tomato suppliers scrounge around for whatever's left on the market. "What we're taking is what was salvageable," she said. "But people don't stop coming into Subway just because the tomato market is high. They expect to get tomato on their subs."

All Subway franchise owners have been given signs to display in their stores indicating that because of the hurricanes, they may be out of certain toppings. If they have tomatoes, however, sandwich makers are under strict instructions not to skimp. "That would be heresy if we did that. We want customers to get what they're expecting," said spokesman Les Winograd. "We're not going to ration tomatoes."

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