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Spezzano talks category management for retail tomato programs

by Rand Green | September 07, 2009
As reported previously in The Produce News, Dick Spezzano, founder of Spezzano Consulting Services in Monrovia, CA, and former vice president of produce and floral for The Vons Cos., is working with Farmer's Best in Nogales, AZ, to develop a major retail tomato category management program as part of an effort to maximize the tomato category for Farmer's Best's retail customers.

On Aug. 27, The Produce News talked with Mr. Spezzano and asked him about the need for the type of services Farmer's Best is providing to its customers with his assistance and what type of benefits accrue to retailers that participate.

Mr. Spezzano noted that he is working with Veronica Kraushaar, owner of Viva Global Marketing LLC, on the project. "We have worked on a number of projects together," he said. "Using data that she buys, we are doing data analysis for the tomato category, and we can do it by market, so we can see with any particular retailer" how it compares to the marketplace and whether there is an opportunity gap where that retailer can improve the category's performance.

"Oftentimes, we find opportunity gaps within any category," he said. "Even if the retailer is outpacing the market, there is always room for improvement by variety. We look at each marketplace, and we look at the best practices of those retailers who are outperforming the market and what they do" and compare that to "what is not being done by those who are below the market."

Based on those analyses, recommendations can be made regarding merchandising, displays, space allocations, varieties and ad promotion schedules that are appropriate to specific retail stores and their particular demographics, he said.

Mr. Spezzano said that he has "always admired Farmer's Best. I always thought they were great growers when I was a buyer and when I was responsible for the Vons Companies. And since then, they have grown their commodities. In fact, I did some work with Veronica on the hothouse category [some time ago], and from that work, we encouraged Farmer's Best to get into the hothouse category, which they did, and I think it has been successful for them."

Mr. Spezzano said that what he brings to Farmer's Best and other clients on the supply side is "the retail sense" and an understanding of "what is realistic and what isn't realistic." Sometimes growers and shippers "will want to do things that are just unrealistic," he said. "The retailer is not going to do them" under any circumstances."

With regard to "the whole point-of-purchase issue," for example, there are limits to "how much point-of-purchase material you can put up in a store," and most large retailers "don't do that any longer."

But "there are subtle ways" that the same objectives can be achieved, and one is "to do it on packaging." Another way to get the message to consumers about one's products is through the retailers' web sites or through the grower's or shipper's web site, he said.

The tomato category is a growth category for retailers, and they like the category because it includes high-ticket items, he said. Tomatoes-on-the- vine, for example, may retail for anywhere from $1.99 to $3.99 a pound, "and some of the newer varieties that are coming out are high-priced varieties" with enhanced flavor profiles.

"There was a time when the whole tomato category was flat at best," Mr. Spezzano said. "Those were the days when they wanted to ship tomatoes to the moon and back," and that led to the dominance of the mature green category.

Then the hothouse category "just exploded" with a wide assortment of products such as red rounds, red tomatoes-on-the-vine, yellow tomatoes- on-the-vine, "and on and on," he said. And on the field-grown side, retailers and their customers now have many choices as well, ranging from vine-ripe rounds to grape tomatoes.

And yet, it seems that "there is not anybody out there" doing comprehensive category management for the tomato category, Mr. Spezzano said. He drew that conclusion from the fact that "there is no one [else] out there buying the data." So if someone is doing category management for tomatoes, "how sophisticated is it, if they are not buying the data?"