Tomato Market

Market Overview

The Total Addressable Market (TAM) for tomato was valued at USD 181.74 Billion in 2022. It is projected to reach USD 273.2 Billion by 2031, growing at a CAGR of 4.635% during the forecast period (2023-2031). 

Tomatoes are fruits from the nightshade family (Solanaceae), originating from Central and Western South America. They are a good source of vitamin C, K, lycopene, potassium, folate, and antioxidants. They provide various health advantages like promoting healthy digestion, avoiding cancer, guarding against sunburns, and preserving heart, blood pressure, and blood glucose levels in people with diabetes. Currently, 80% of the tomatoes grown worldwide are consumed fresh, while the remaining 20% are used in the processing sector to make purees, soups, tomato ketchup, pickles, juices, and sauces.

Market Dynamics

Market Drivers

High Demand in Home, Food Processing, and Snack Foods

Industries like home, food processing, and snack foods drive the tomato market. They are also widely utilized in the hospitality, dining, and fast-food sectors of the food service sector. The fast-food industry is expanding globally, driving the market ahead. The rising organized retail sector also aids market expansion. Further-processed tomatoes are in high demand due to their enhanced health benefits and longer shelf life. Since it is used in so many other products, such as tomato juice, ketchup, paste, strained tomato pulp, pickles, pasta, pizza sauces, salsa, gravies, ready-to-eat curries, and tomato-based powder goods, tomato puree is a particularly significant processed well. People in Europe are currently more concerned with better meals that include more fruits and vegetables due to rising disposable incomes.

Additionally, there is a shift in conventional dietary practices toward organic food due to the growing ex-pat community in Europe. It is projected that the output of organic tomatoes in the European region will increase due to the much more significant quantities of vitamin C, sugar, and lycopene found in organic tomatoes.

Market Restraint

Unfavorable Climatic Conditions

Climatic extremes and climate change could seriously disrupt the output and revenue from tomatoes. Due to adverse quality effects, the domestic market will be under pressure and require more absorbent capacity for fresh consumption and processing second- and third-grade tomatoes. Shortage of cold winter units, particularly in the drier regions, heat stress and abnormally warm weather during critical developmental stages, conditions that encourage pests and illnesses, a lack of water for irrigation, hailstorms, and flooding are the main climatic dangers to productivity. Although early flowering in the spring and a lack of winter chilling seem like apparent issues, climate change also presents several other challenges for tomato growers.

For instance, warmer evenings encourage the development of pests and other illnesses, and hot winter days can scorch tomato plant tissue. Warmer temperatures also significantly damage fruit that has already formed, which prevents growers from selling them for a profit. The tomato, which is supposed to turn red, will turn brown or pink if the night does not get cold enough. Tomatoes grown in open fields are more susceptible to weather conditions than those grown in greenhouses. Therefore, open-field tomato farming is more affected by global warming than is the controlled greenhouse environment.

Market Opportunities

Growing Area under Cultivation

More people are consuming vegetables, including tomatoes, thanks to growing knowledge of their high nutritional worth to address various dietary and nutritional demands. The demand for tomatoes has increased due to the factors mentioned above. Customers' preference for fresh tomatoes and cutting-edge farming techniques like indoor growing has increased domestic tomato production. As a result of climate change, insect resistance developed over time, poor infrastructure, and post-harvest loss, it became necessary to develop new high-yielding and hybrid seeds to help farmers increase their output. Tomato production will be increased to meet the expanding demand. The need for processed tomato products such as sauce, paste, ketchup, and diced tomatoes in international markets is also a significant factor propelling the sector forward. This increases demand for the crop and strengthens tomato production. To enhance tomato production, growers have invested in sheltered cultivation and other farming techniques, including plastic mulching and drip watering.

Regional Analysis

The global tomato market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA. 

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 5.36% during the forecast period. The area's primary factor fueling market expansion is the expansion of high-intensity tomato cultivation. After potatoes and onions, tomatoes rank third on the Indian government's list of essential horticulture crops. Due to the government of India's initiative known as "Operation Greens" to improve the living conditions of farmers, these three main crops are grown throughout the nation. China has extensive tomato plantations, including greenhouse plantations in the north and open-field plantings in the south. The isolated Xinjiang Uygur region in China's northwest produces over 70% of the nation's total tomato output. Tomato cultivation and processing in Xinjiang has developed into a significant local sector due to the region's special natural conditions; tomato goods from Xinjiang have been exported to European, American, African, and Central Asian nations and territories. Even though tomatoes are rarely consumed in China, the country is currently one of the biggest producers of processed tomato products worldwide.

Additionally, over the past 20 years, consumption of items made with tomatoes has increased. As a result, China's tomato-based product business is expanding quickly. Tomatoes are cultivated in many different types in India, but some of the best ones are Pusa Early Dwarf, Rashmi, Rupali, Sioux, Avishkar, Abhinav, Vaishali, and Marglobe. Numerous agricultural institutes in India, including the Indian Agricultural Research Institute, are responsible for creating the majority of these cultivars (IARI). Due to insufficient storage facilities, there are significant post-harvest losses of tomatoes in India. This results in substantial losses for the growers and, therefore, for the national economy. According to a government report, tomatoes are lost annually at 12.4%.

North America is expected to grow at a CAGR of 4.89% over the forecast period. In American cooking, tomatoes are a staple fresh and processed vegetable in ketchup, tomato sauce, and paste. Due to the expected population growth, the rising popularity of healthy eating, and the usage of fresh tomatoes and tomato sauces for sandwiches, pizza, and other "fast meal" products, the tomato industry is set to have significant customer demand. According to the USDA, tomatoes are the second-most popular vegetable in the nation, and fresh tomato consumption per person is rising. Consumption of processed tomatoes, such as ketchup, tomato sauce, and paste, is growing alongside the growth in fresh tomato consumption in the nation. More consumers are looking forward to eating organic tomatoes as fresh tomato consumption as a healthy food increases.

In addition, most of the tomatoes grown in Canada for processing are produced in Ontario. The central growing regions in Southwest Ontario are Kent and Essex Counties, where a unique blend of soil and climate has created an area ideally suited to developing processed tomatoes. Tomatoes are the country's most widely grown greenhouse crop. Canada is now the leading supplier of greenhouse tomatoes in North America due to its cooler climate and shorter growing season. Outdoor tomato production is limited in Canada, where field tomatoes are primarily grown in southern Ontario.

Europe is expected to grow significantly over the forecast period. To make the Extremadura region the primary production area, with over 70% of Spain's crops, the Guadiana region, the Guadalquivir region, and the Ebro River valley has been prioritized for tomato production in Spain. The central tomato-producing areas are Andalusia, the Grand Canary and Canary Islands, the Valencian Community, Murcia, Extremadura, and the Navarre. Tomatoes are grown in Almera, Andalusia, one of the world's most significant greenhouse production hubs. Due to its quick vegetative cycle, tomatoes can produce up to three harvests annually. The establishment of quality certifications like UNE 150.000, Global-Gap, ISO9000, ISO 14000, and British Retail Consortium, the advanced application of Hazard Analysis and Critical Control Points, the widespread use of tracking systems, and most recently, the introduction of processed products were the most significant product innovations made in the tomato sector in Almera. The Spanish tomato industry has benefited from these innovations.

In addition, Germany imports a considerable portion of the tomatoes it uses for domestic consumption. Still, it exports limited amounts of tomatoes to other countries, including organic tomatoes and some new tomato types. German tomato costs are 5%–6% higher than the average for Europe, which is still relatively reasonable for Northern Europe. Tomato prices at the trade level may not always reflect the prices paid by consumers across the country. As a bonus, the prices have remained consistent and helped compensate for the losses incurred by German manufacturing enterprises. Germany will continue to dominate the import of tomatoes despite efforts to expand domestic output. In comparison to other European countries, tomato costs are higher. The tomato export market in the U.K. is very diverse. In summary, it is projected that U.K. tomato exports will increase moderately during the forecast period due to the rising worldwide demand, decreased production in the key exporting nations, and rising domestic consumption.

One of the most significant fruits in Brazil is the tomato, primarily consumed as fresh produce. Tomatoes make up about 29% (by volume) of the total vegetables bought by the typical Brazilian home, according to a research article from 2018. This survey found that in typical households across the nation, tomatoes and other vegetables are mostly consumed raw, then cooked, and then as soup. Producers of tomatoes in Brazil primarily focused on exports. Tomatoes that do not match the standards for the export market (poor grade, lack of color, or short post-harvest life) are diverted to the domestic market and the fruit processing industry. Argentinian food, such as pizza and pasta, has a strong Italian influence and uses tomatoes. Furthermore, sauces, peeled or chopped tomatoes, concentrated purées, and other tomato-based products have been the mainstays of Argentina's tomato consumption. Only 20% of the crop of tomatoes is utilized to manufacture processed tomato paste; the majority is used to make concentrated puree from fresh tomatoes.

Segmental Analysis

The global tomato market is segmented by product.

Based on product type, the global tomato market is bifurcated into sauces, paste, canned tomatoes, ketchup, juice, and others. 

The canned tomatoes segment is the highest contributor to the market and is estimated to grow at a CAGR of 5.73% during the forecast period. Fresh and canned tomatoes are both equally nutrient-dense. Both contribute to the required daily intake of vegetables; according to the C.D.C., barely one in ten persons reaches this goal. Low-acid foods, such as meat and vegetables, retain their most excellent quality for 2 to 5 years; high-acid meals, like tomatoes and other fruit, only for up to 18 months. Cans are safe for an unlimited amount of time if they are in good shape (without dents, swelling, or rust) and have been kept in a cool, dry location.

The sauce can be used over pasta and is produced with tomato puree (or strained tomatoes), savory veggies, and additional ingredients. Spaghetti sauce, pasta sauce, etc., any of the many sauces available for spaghetti or other pasta dishes. Although tomato sauces are frequently used for meat and vegetables, they are perhaps best recognized as the foundation for the sauces in Italian pasta meals and Mexican salsas. To maximize flavor, add juiciness, and enhance the mouth feel of a dish, sauces are crucial. Sauces enhance a dish's flavor, texture, moistness, viscosity, and aesthetic appeal. They aid in bringing a plate's many components together to form a cohesive whole.

Recent Developments

• May 2022- Ingomar Packing Company, one of America's largest tomato processors, partnered with Botanical Water Technologies (B.W.T.) to help solve the water crisis.
• June 2022- The Morning Star Company harvests, processes, packs, and transports tomatoes while retaining tomato paste and diced tomato health benefits.