Wednesday, June 11, 2008

The Great American Tomato Scare

Read this sentence carefully-

The Wal-Mart SuperCenter in Kettering was selling fresh Roma tomatoes
in bulk as usual, though the FDA has cleared Romas from certain states
from suspicion of contamination.

Note the word bulk. Why do I have this strange idea that the purchase of certain kinds of tomatoes at a cheap price was affecting sales of certain other varieties that sell typically at a more expensive price per pound?

This would be a normal market adjustment involving customers in a troubled economy stretching their purchasing power to what little extent they are able.

There would be two ways of dealing with this phenomenon from a marketing perspective. One would be to sell the other varieties at a cheaper price, and so at a loss. The other would be to dream up some way to increase demand for the other varieties in a way that would justify raising the price on the pretext of inadequate supply to meet that new demand.

Voila, you have an artificial scare, inspired by an outbreak of salmonella poisoning which may or may not have actually originated from tomatoes, or may have only originated from tomatoes in part. Such outbreaks may in fact be natural and completely within normally occurring ranges. Who really knows for sure?

According to this report, there have been something like 145 cases stretched out over a range of sixteen states, from east to west coast. Is that really that big a deal-really?

Keep in mind, tomato season is just now starting to arrive. Talk about suspicious timing.