Hawke's Bay Today understands 600 hectares of land, which must be irrigated, was to be earmarked in the region to grow vegetables for Heinz-Wattie's for production of sauces at its Hastings plant.
Mr Hemsley said however it was likely extra land would be needed to grow more beetroot product, rather than process tomatoes.
"We are expanding in that area and expect a big rise in the acreage devoted to beetroot," he said.
New Zealand produced 45,000 tonnes of tomatoes for processing each year and Horticulture New Zealand chief executive Peter Silcock said he believed Kiwi growers had the capacity to meet demand by Heinz-Wattie's
"What it comes down to is a question of economics and price," he said. "The question is 'what is Wattie's willing to pay?'. Is it a fair price for the product which growers and Wattie's can make a reasonable amount of money out of.
"The fact is New Zealanders want to eat New Zealand-grown vegetables and are probably willing to pay a little more for that."
Mr Silcock said over all he thought the news of the Heinz-Wattie's move across the ditch was positive for Hawke's Bay growers.
The food company would close its Girgarre factory in Northern Victoria on Friday, putting 146 of its staff out of work and affecting three tomato growers. It would invest $5 million in its baby food manufacturing facility in Echuca.
The Gigarre closure was announced in May but workers got their notice before Christmas and the move meant no Heinz sauces or ketchups would now be produced in Australia.
The move is part of an overall strategy to consolidate manufacturing in particular of sauces, beetroot and come canned meal products from sites in Victoria, Brisbane and Wagga Wagga to the company's Hastings plant.
Heinz Australia's supply chain director Mike Robinson last year said it was a necessary step to become more competitive "in a challenging environment".
"Girgarre requires millions of dollars of investment just to keep the plant going, with no likelihood of making it competitive into the future," he said.
The company said while a small number of new jobs would be created, the Hastings plant had the infrastructure to absorb the additional volumes into its current operation.