Freeze Hits Vegetables

Daily News Article — Posted on February 16, 2011

(by Julie Jargon and Ilan Brat, The Wall Street Journal, WSJ.com) – A major freeze in Mexico earlier this month has resulted in a shortage across the U.S. of tomatoes, cucumbers, bell peppers and other produce that could last until April and lead to higher prices at the grocery store.

Supermarkets, distributors and restaurant chains are scrambling to find other sources for the items and to offer replacements. But the problem has been compounded by the fact that inclement weather has also hit other growing regions, like Florida and Texas, that would normally be able to make up for a supply interruption from Mexico.

“It’s extremely unusual for more than one production area to experience abnormal weather in the same year. We are continuing to harvest tomatoes in Florida, but our current volume is maybe half of what it would normally be,” said Reggie Brown, executive vice president of the Florida Tomato Growers Exchange, adding that a 25-pound box of tomatoes went from costing less than $15 to more than $30 in the past week.

“Our supplies will become closer to normal in the latter part of March or the beginning of April, barring any other bad weather,” he said.

Supervalu Inc., the U.S.’s fourth-largest food retailer by sales behind leader Wal-Mart Stores Inc., is girding for lower availability of some key vegetables because of the deep freeze, Mexico’s worst in more than 50 years. Dan Bates, director of merchandising for the Eden Prairie, Minn., company’s produce division, said that in the last 10 days he has seen the price of peppers, cucumbers, tomatoes, squash and eggplant rise and that the grocer may pass along some of those costs to shoppers.

“It’s been kind of the perfect storm of problems this year,” Mr. Bates said. “It’s the first time I remember every area having the same problem at the same time.”

Mr. Bates says some growers are shipping smaller heads of lettuce since the outside layers have to be removed due to damage. Some growers who normally ship red peppers are picking them while they are still green in order to take advantage of currently higher green pepper prices, he added.

Because the weather has affected the quantity and quality of round tomatoes, hamburger chain Wendy’s this past Thursday starting serving tomatoes on its hamburgers and chicken sandwiches only upon request. “The tomato shortage is expected to continue until mid-April when the new crop of tomatoes should be available,” Wendy’s spokesman Bob Bertini says. Wendy’s is a part of Wendy’s/Arby’s Group Inc.

A Sweet Tomatoes restaurant in Waukegan, Ill., on Saturday posted a sign saying “Mother Nature strikes again,” and listed a number of vegetables that aren’t currently being offered in the salad bar. Just this past March, a weather-related shortage of tomatoes from Florida forced restaurants and supermarkets to ration supplies amid soaring prices.

Garden Fresh Restaurant Corp., the San Diego-based company that owns 78 Sweet Tomatoes and 40 Souplantation restaurants, has added edamame, tofu, feta cheese and other items it doesn’t normally stock in its salad bars to replace the items hurt by the freeze in Mexico.

“Typically when we have a produce issue, there’s a two-week gap, but this looks like it could last a lot longer,” said Susan Miille Hoffman, vice president of purchasing at Garden Fresh.

She said the chain is trying to determine if anything can be salvaged from Mexico while also considering whether it can buy tomatoes from Florida and cucumbers from Honduras. “Everyone’s grappling for these products right now,” she said, adding that passing higher prices along to customers is a “last option.”

A spokeswoman for Darden Restaurants Inc., parent of Red Lobster, Olive Garden and LongHorn Steakhouse, said, “We have seen an impact on suppliers in [Mexico]. We are sourcing from other regions to ensure no interruptions in supply for items such as tomatoes and peppers.”

Write to Julie Jargon at julie.jargon@wsj.com and Ilan Brat at ilan.brat@wsj.com.