Tuesday, July 18, 2006

Dueling tomatoes

Competition is pervasive in American society and the government often takes action that distort the market place. Here's a little story about how a little company built a brand that enabled them to change the playing field. What makes this story interesting is that the brand has an unusual name - the UglyRipe tomato.

The Florida Tomato Committee (FTC), a group of competing growers sanctioned by federal law dating to the 1950’s, set all size and shape standards for tomatoes entering the US market from mid-October to mid-June. The competing growers claimed the UglyRipe was too misshapen and would damage the reputation of the Florida marketplace. I'm not sure how the UglyRipe tomato was acceptable in September but not acceptable in October, but growers convinced the FTC to limit sales during the northern winter season.

The UglyRipe tomato, developed over decades with over $3 million in research funding by Procacci Brothers Sales Corporation was previously forbidden for sale outside of the Florida winter growing region. However, during a three-year window when the FTC offered the UglyRipe a temporary exemption, sales skyrocketed as consumers across the country were afforded a fresh, tasty tomato during the winter. The growers moved to close the exemption, and for the last three years the tomato has been unavailable in the winter season. Can't stand the competition, get the government to limit your competitors.

Fortunately, people came to their senses and eliminated the restrictions on free trade. And this is within the US. Next winter, Americans will experience something they haven’t had for years - a delicious, homegrown style tomato in the middle of the cold months, thanks to a rule change offered by the Agriculture Marketing Service of the United States Department of Agriculture (USDA).

Sunday, July 02, 2006

Competition in the health field

I have been busy as of late working on some new clients. I have just started working with a client in the transportation business so I am learning yet another industry. While I was traveling recently, I saw Warren Buffett announcing his plan to contribute a huge portion of his wealth to the Gates Foundation. Bill and Melinda have done an incredible job of building an organization to give away their money and Warren sees that his money is in good hands and that they are focused on causes that he shares like education and health care.

It occurred to me that one way to address the spiraling health care costs in the US and around the world is to inject some more competition into the marketplace. I would hope that the Gates Foundation could direct some of that mass of money to providing scholarships to any person who has the academic ability and desire to become a nurse or doctor. A million more doctors without six figure loans could make a huge impact on world health. Bill and Warren have an ability to change the playing field in the health care market. Let's hope that they do.