Market Pressures have driven change

The greenhouse fresh tomato sector is an industry that has undergone a prolonged adjustment in the face of considerable pressure from changes in the market place. Growers have had to adjust to a rationalisation in their returns, rising costs for labour, energy and legislated compliance costs and relatively small increases in consumption. The adjustment period began in the mid-late 1980's following the advent of CER and the importing of increasing quantities of fresh outdoor tomatoes from Queensland during the winter and spring months. Growers have been forced to look for efficiency gains in all areas of business including technical, management, financial and marketing operations.

In the intervening years grower numbers have declined from over 1500 to less than 300 today. However the mid to late 90’s saw the introduction of the large high technology greenhouses where several businesses are now operating between 5 – 20 hectares of glass. Of the approximately 300 commercial tomato growers in New Zealand; one third are located in the greater Auckland region. There are also some committed growers remaining in Northland, Waikato and Bay of Plenty, Nelson & Christchurch.

To succeed as a tomato grower requires commitment, capital, consistent quality, as well as volume, of production and, above all else, an existing customer base. Ideally a grower needs to be of a certain size or either belong to a packhouse or grower group marketing organisation, or to a 'district system' to have the required influence in the market place. There are fewer buyers and fewer retailers. The supermarket chains dominate, hence the need for a customer base and volume of production (pallet loads, rather than cartons or crates) along with a quality assurance system.

The greenhouse fresh tomato industry is changing; grower numbers are decreasing, but production is increasing. In other words, the big growers are getting bigger. Large volumes of quality tomatoes are now being produced in big, high-technology greenhouses. To be able to plant a new crop for a quality yield sufficient to satisfy today's marketplace, the minimum capital investment, starting from bare land, requires approximately $1 - $2 million per hectare.