Consumer uncertainty is increasing as a result of the growing restrictions and lockdown measures in northern European countries. At this time of the year, the orders for vegetables such as tomatoes usually experience a significant rebound to meet the demand in the days leading up to the Christmas and New Year celebrations, but this year, the growth has been more moderate.
“Not only are there closed sales channels, such as restaurants and hotels or food stores, but it is also very difficult to know how consumption is going to behave. Even though part of the demand for these channels has shifted to the retail, I don't think this will make up for the loss, since consumers don't have the confidence that they should. Although sales have increased compared to previous weeks, they haven't done so to the same extent as in other years. Shopping baskets are not being filled as they were before this health crisis; you can't breathe the same joy in the air,” says David Franco, from the commercial department of Grupo Hortofrutícola Paloma. The Murcian company is currently in the middle of the tomato campaign.
"Our business is mainly focused on the supply to large distribution chains, so in general, despite the fact that this is a weaker Christmas campaign than in other years, our forecasts fall within normal levels, with a rebound of about 10% in specialty tomato sales,” he says.
The tomato acreage has been reduced by between 8 and 10% in Spain, with Almería and Murcia as the main producing areas. “We see that it has become a trend in recent years. As we lose acreage, the value per square meter of our product increases. The growth of the market share of other third countries, such as Morocco or Turkey, means that Spain is producing less tomato, but with a higher value, since we have better varieties, cultivation techniques and quality and food health certifications," says David Franco.
"Brexit will bring measures of immediate effect to a sector with long-term planning"
“Although last year Brexit ended up being postponed for another year, we are all aware that this year, as of January 1, the United Kingdom will definitely leave the EU. We have prepared ourselves to undertake changes in terms of bureaucratic procedures or transport documentation, among other aspects, although the final details on tariff issues have yet to be agreed. These tariffs won't only make the product more expensive, but could also give an edge to competing third countries. The truth is that it's very difficult to deal with measures coming into immediate effect in a sector with long-term investment and planning.”
“Officially, the United Kingdom has trade agreements with other third-party tomato supplying countries, which gives them an advantage in this market. At the same time, and not in an official way, British importers have developed business lines with these origins in order to guarantee the security of their imports, taking into account the uncertainty that this situation has generated in recent years. We don't know yet what the final agreement will contain, but we all want to continue doing business with the United Kingdom in as similar a way as possible as we are used to, despite the changes in bureaucratic procedures and documentation,” says David Franco.