Potato growers are grabbing the side dish spotlight with eye-popping promotions and value-added products that stress convenience.
By Nina Amir
The cold weather and desire for comfort food makes February an ideal time for retailers to promote a year-round favorite: potatoes. It is also Potato Lover’s Month, sparking retailers to develop creative displays that draw consumers to this staple of the produce department.
Industry experts say this year’s great crop makes it possible to aggressively price and create consumer excitement around every type of potato or potato product available.
The health of the U.S. potato industry goes in cycles, says Ted Kreis, marketing and communications director for Northern Plains Potato Growers Association, based in East Grand Forks, Minn. This association supports its 300 growers, the Red River Valley potato growers and shippers, in the areas of research, promotion and marketing, communication and legislation.
While last year was particularly profitable for many growers, this year is proving just the opposite. “Idaho in particular planted considerably more potatoes this year, but changing world markets have cut demand for U.S. exports,” Kreis says. “This has pushed more potatoes to the fresh market, creating a glut of russet potatoes.” However, this represents good news for retailers. “This has created a situation where retailers can enjoy large margins,” Kreis says.
Indeed, potatoes have never been a better deal for both retailers and consumers. “It is the fastest-growing category in produce, with double-digit volume gains for the past six months,” says Seth Pemsler, vice president of retail and international for the Idaho Potato Commission in Eagle, Idaho. The Idaho Potato Commission is a state agency with many responsibilities, including the promotion of Idaho potatoes.
According to Pemsler, “Potatoes fit recessionary times. They are among the least costly item in produce, and potato pricing has been declining for the past three months due to a larger harvest in 2009.” That means retailers can make more money on potatoes, offsetting margin losses in other categories.
The increased yield and good quality of russet potatoes this year makes now a great time to promote potatoes in general. Randy Shell, vice president of marketing at RPE, Inc, based in Bancroft, Wis., sees retailers promoting heavily on large bags. “That is driving good volume early in the season,” he says.
With retail prices on russets deflated due to the large crop, promotion will be important to drive top-line sales. To maintain sales at the same levels as a year ago, Shell says retailers will need to move more product. “On the flip side, red [potato] volume is down this year mainly due to reduced yields in North Dakota,” says Shell.
Despite reports of economic improvement in the U.S., consumers likely will continue to stretch their food dollars, Shell predicts, and potatoes provide a healthy and economical purchase option that fits into most families’ budgets. “More than 68% of consumers have potatoes on their shopping list, and when they arrive at your store, they are also going to purchase other fresh produce items,” Shell says.
Despite the fact that he sees the entire category in a deflationary cycle, Ralph Schwartz, director of value-added marketing and category management for Potandon Produce L.L.C., says the industry can’t let up on its promotional efforts.
He says that the category is seeing a surge in convenience because they offer the consumer value and easy preparation.
U.S. Potato Board’s “best in class” program encourages retailers to promote and display a wide variety of potatoes. “This helps the consumer have a broad choice in the potato category,” says Rod Lake, owner of Heyburn, Idaho-based Southwind Farms.
Spreading the word
The potato industry as a whole continues to publicize the nutritional value of potatoes. Kevin Stanger, senior vice president of sales and marketing for Idaho Falls, Idaho-based Wada Farms Marketing Group LLC, says in the long term, the nutritional value of potatoes will continue to make them a sure seller. “Everyone knows that potatoes are nutritious and a great value and the industry is continuing to promote and increase consumption.”
To get consumers buying potatoes at any time of the year, Pemsler stresses that retailers must use advertising and displays to catch their attention. “And use the programs offered by the industry, such as the four national tie-in programs we just offered or Potato Lover’s Month. Potatoes are a great deal and will drive consumers to stores if featured.”
He says the annual Potato Lover’s Month Display contest can help with promotional efforts. “This is by far the biggest deal going during February,” Pemsler says. “Potato sales skyrocket when retailers participate in the program.”
Grocers need to promote across the entire potato category, including bargain, mainstream and specialty items. “Along with the promotions, building secondary displays increases impulse purchases,” says Shell.
Lance Poole, vice president of sales for Idaho Falls, Idaho-based Eagle Eye Produce, a grower/shipper of potatoes and the largest organic grower in Idaho, says, with pricing at record lows, excellent quality this season and plenty of supply, retailers should run aggressive advertising campaigns. “They need to make sure they have big displays with plenty of advertising and good traffic flow.”
Poole says stocking smaller pack sizes can increase volume. “People are so price conscious right now,” he explains.
With many new value-added products hitting the market, retailers can increase consumer awareness and sales with store sampling programs. Especially with its newer varieties, Schwartz encourages store sampling. “Once consumers taste the product and learn how convenient and easy the preparation is, the sell becomes easy,” he says.
Cross promotion with other items works for potatoes as well. Stanger says, “We’ve seen some retailers run a promotion with their meat department and have seen great lifts in sales. Some have put a ‘microwave bag’ potato with a salad and precooked chicken to create a ‘Dinner for 4 under $10’ and seen great success. I think the biggest thing is to get them to not treat the potato as the back-shelf commodity.”
Randy Bartter, vice president of marketing for consumer products at Ventura Foods, LLC, in Brea, Calif., the producers of the Marie’s line of dressings, says that’s exactly what his company suggests retailers do to promote potatoes. “At Marie’s we believe the best types of promotions ultimately help our consumers put a great tasting, meal or side-dish on the table easily.”