Arkansas tomato industry thriving in post-auction era
Arkansas tomato industry thriving in post-auction era
Arkansas tomatoes have long been considered an important source for both retailers and foodservice operators in North America during the summer months. But the industry there has enjoyed particularly strong growth and momentum since the cash auction system it previously operated under ended a few years ago, according to two of the leading players in the deal.
"When there was a cash auction system in Arkansas, we did not have the advantage of direct contact with growers," said Gary Margolis, president of Boca Raton, FL-based Gem Tomato Sales, which also has seasonal offices in Hamburg, AR, and in Benton Harbor, MI. The auction system is often considered the purest form of economics because the product goes to the highest bidder. But that is not always the best customer the one that you want to build a solid relationship with for the long term. Growers got cash on the spot, which was advantageous, but the downsides often outweighed the good.
Auctions, Mr. Margolis explained, make promotional efforts difficult because product availability is not known in advance. Without advanced supply information, customers cannot commit. Nor can relationships between growers and wholesalers, distributors, retailers and/or foodservice operators develop into the sound ongoing partnerships that can lead to successes. The lack of communication left too much of a gray area between the marketing arm and the growers. People simply nodded their heads, did the deal and walked away.
Without auctions, people can work together better, said Mr. Margolis. It is a completely different type of operation today, and one that we feel is much improved.
Brooks Lisenbey, sales manager for Arkansas Tomato Shippers LLC, headquartered Hermitage, AR, with seasonal offices in Rio Rico, AZ, agreed with Mr. Margolis. He said that his was one of the last companies to do business on the auction when it ended four years ago.
It just wasn't the proper way to market tomatoes, he said. It was very hard to project prices. Today when a chain retailer asks me for a price 30, 60 or 90 days out, we can provide that information because we own the product in advance. But under the auction system, you never knew what you would need or when, or what the prices would be from day to day.
Arkansas Tomato Shippers markets about 30 percent of its product ahead of time, so it is important that it has the needed information in advance. Mr. Lisenbey added that auctions do not allow for proactive selling, which is how retailers and foodservice operations are set up to buy product today.
Customers also need custom packs today, and everyone seems to have their own individual needs, Mr. Lisenbey said. This aspect could not be coordinated successfully with the auction system. Also, the inspection process we go through today to ensure food safety was not benefited by auctions.
Mr. Margolis had an early introduction into the Arkansas tomato industry. His uncle was Sy Katz, previous owner of Sy Katz Produce and a highly respected industry leader. That company was purchased by Mr. Margolis brother, Owen Margolis, several years ago, and it is now operated from its Boone, NC, headquarters. Mr. Katz died a few years ago.
My uncle worked the Arkansas deal as far back as the 1960s, said Mr. Margolis. It was always known as a prime area for growing great eating tomatoes. While it suffered a few inconsistencies over the years, the issues were worked out over time. Today it is sophisticated and it offers highly advanced shipping and packing processes. It has evolved into a truly exceptional shipping point.
Mr. Margolis began Gem Tomato Sales 23 years ago in Florida, with attention on vine-ripe product. At the time, most areas were harvesting green tomatoes, but many customers had begun to recognize the better flavor of vine-ripe product. Over the years, the company evolved into a vine-ripe specialty house that handles all varieties. It partners with about a dozen growers in Florida, Arkansas and Michigan, but each is dedicated to one specific tomato category.
We focus on homegrown tomatoes for spring and summer deals, said Mr. Margolis. It enables us to provide high-quality product in volumes that we can promote. We have built a strong program in this window because our customers are kept supplied throughout the entire growing season.
Mr. Margolis added that the consumer demand of homegrown is driven by todays aggressive health trends, and that seasonal products, which exemplify high nutrition, are especially in high demand.
Gem Tomato Sales ships product under several brand names, with two dominant labels. Ashleys Best is used for product supplied by Triple M Farms in Hamburg, AR, and Summertime Flavor is the label used for product from Michigan.
We are the exclusive sales agent for Triple M, said Mr. Margolis. The company is owned by James Meeks and Wendell Moffatt. They are very progressive farmers who, using their own financing, grow on 150 acres. They are doing an exceptional job, and they are a prime example of the best of what Arkansas growers produce today.
Arkansas Tomato Shippers was founded by Charlie Searcy in 1997. He remains with the company today as its managing member. Mr. Lisenbey said that during the months of June and July, the company is a grower-shipper. From August through May, it procures a full line of product from Nogales, AZ. It also works a California deal that includes field and hothouse product from August through December. In Arkansas, the firm operates from a state-of-the-art regional packing facility.
In Arkansas, we deal in Romas, rounds and grape tomatoes, said Mr. Lisenbey. About 30 percent of our business is in hothouse product out of Mexico. Besides tomatoes, we also handle hothouse and field-grown cucumbers, and sweet peppers from Mexico. The company ships its product under the Candy Brand, Jacks Brand and Pablo Brand labels, and it distributes from Texas northward, North Carolina northward, some areas of California and into Canada.
We expect an outstanding crop out of Arkansas this season, said Mr. Lisenbey. The few bins we pulled early indicate that we have about 95 percent U.S. No. 1 grade tomatoes this year, due primarily to the great growing season we have had. The cool and wet spring growers in the East have experienced this year will likely add to what we anticipate will be good marketing opportunities coming out of Arkansas in the coming couple of months. Our volumes are up by about 15 percent over last year, which will also add to our marketing abilities.
Mr. Margolis agreed that it should be a great season for Arkansas tomatoes.
Its a short season, running from approximately June 15 through July 15-20, he said. But the great crop conditions this year should make it a really good season. We are seeing extremely high-quality product and larger-than-normal volume yields this year.
"When there was a cash auction system in Arkansas, we did not have the advantage of direct contact with growers," said Gary Margolis, president of Boca Raton, FL-based Gem Tomato Sales, which also has seasonal offices in Hamburg, AR, and in Benton Harbor, MI. The auction system is often considered the purest form of economics because the product goes to the highest bidder. But that is not always the best customer the one that you want to build a solid relationship with for the long term. Growers got cash on the spot, which was advantageous, but the downsides often outweighed the good.
Auctions, Mr. Margolis explained, make promotional efforts difficult because product availability is not known in advance. Without advanced supply information, customers cannot commit. Nor can relationships between growers and wholesalers, distributors, retailers and/or foodservice operators develop into the sound ongoing partnerships that can lead to successes. The lack of communication left too much of a gray area between the marketing arm and the growers. People simply nodded their heads, did the deal and walked away.
Without auctions, people can work together better, said Mr. Margolis. It is a completely different type of operation today, and one that we feel is much improved.
Brooks Lisenbey, sales manager for Arkansas Tomato Shippers LLC, headquartered Hermitage, AR, with seasonal offices in Rio Rico, AZ, agreed with Mr. Margolis. He said that his was one of the last companies to do business on the auction when it ended four years ago.
It just wasn't the proper way to market tomatoes, he said. It was very hard to project prices. Today when a chain retailer asks me for a price 30, 60 or 90 days out, we can provide that information because we own the product in advance. But under the auction system, you never knew what you would need or when, or what the prices would be from day to day.
Arkansas Tomato Shippers markets about 30 percent of its product ahead of time, so it is important that it has the needed information in advance. Mr. Lisenbey added that auctions do not allow for proactive selling, which is how retailers and foodservice operations are set up to buy product today.
Customers also need custom packs today, and everyone seems to have their own individual needs, Mr. Lisenbey said. This aspect could not be coordinated successfully with the auction system. Also, the inspection process we go through today to ensure food safety was not benefited by auctions.
Mr. Margolis had an early introduction into the Arkansas tomato industry. His uncle was Sy Katz, previous owner of Sy Katz Produce and a highly respected industry leader. That company was purchased by Mr. Margolis brother, Owen Margolis, several years ago, and it is now operated from its Boone, NC, headquarters. Mr. Katz died a few years ago.
My uncle worked the Arkansas deal as far back as the 1960s, said Mr. Margolis. It was always known as a prime area for growing great eating tomatoes. While it suffered a few inconsistencies over the years, the issues were worked out over time. Today it is sophisticated and it offers highly advanced shipping and packing processes. It has evolved into a truly exceptional shipping point.
Mr. Margolis began Gem Tomato Sales 23 years ago in Florida, with attention on vine-ripe product. At the time, most areas were harvesting green tomatoes, but many customers had begun to recognize the better flavor of vine-ripe product. Over the years, the company evolved into a vine-ripe specialty house that handles all varieties. It partners with about a dozen growers in Florida, Arkansas and Michigan, but each is dedicated to one specific tomato category.
We focus on homegrown tomatoes for spring and summer deals, said Mr. Margolis. It enables us to provide high-quality product in volumes that we can promote. We have built a strong program in this window because our customers are kept supplied throughout the entire growing season.
Mr. Margolis added that the consumer demand of homegrown is driven by todays aggressive health trends, and that seasonal products, which exemplify high nutrition, are especially in high demand.
Gem Tomato Sales ships product under several brand names, with two dominant labels. Ashleys Best is used for product supplied by Triple M Farms in Hamburg, AR, and Summertime Flavor is the label used for product from Michigan.
We are the exclusive sales agent for Triple M, said Mr. Margolis. The company is owned by James Meeks and Wendell Moffatt. They are very progressive farmers who, using their own financing, grow on 150 acres. They are doing an exceptional job, and they are a prime example of the best of what Arkansas growers produce today.
Arkansas Tomato Shippers was founded by Charlie Searcy in 1997. He remains with the company today as its managing member. Mr. Lisenbey said that during the months of June and July, the company is a grower-shipper. From August through May, it procures a full line of product from Nogales, AZ. It also works a California deal that includes field and hothouse product from August through December. In Arkansas, the firm operates from a state-of-the-art regional packing facility.
In Arkansas, we deal in Romas, rounds and grape tomatoes, said Mr. Lisenbey. About 30 percent of our business is in hothouse product out of Mexico. Besides tomatoes, we also handle hothouse and field-grown cucumbers, and sweet peppers from Mexico. The company ships its product under the Candy Brand, Jacks Brand and Pablo Brand labels, and it distributes from Texas northward, North Carolina northward, some areas of California and into Canada.
We expect an outstanding crop out of Arkansas this season, said Mr. Lisenbey. The few bins we pulled early indicate that we have about 95 percent U.S. No. 1 grade tomatoes this year, due primarily to the great growing season we have had. The cool and wet spring growers in the East have experienced this year will likely add to what we anticipate will be good marketing opportunities coming out of Arkansas in the coming couple of months. Our volumes are up by about 15 percent over last year, which will also add to our marketing abilities.
Mr. Margolis agreed that it should be a great season for Arkansas tomatoes.
Its a short season, running from approximately June 15 through July 15-20, he said. But the great crop conditions this year should make it a really good season. We are seeing extremely high-quality product and larger-than-normal volume yields this year.
