Rediscovering the spud

The low-carb diet fad continues to fade and potatoes are once again rising to the top of shoppers’ grocery lists.

By Craig Levitt

Robert Atkins, creator of the Atkins Diet, was certainly no friend to the potato industry. At the peak of his no-carb diet program the potato industry slogged through a few years of declining sales. Diets, of course, come and go and as this one continues to ebb, potato sales are on the rise.

Since introduction of the Atkins Diet, industry players have continued to deliver the message that the complex carbohydrates a potato contains are not only not bad for you, but good for you. They are a source of energy, contain vitamin C (about the same as an orange) and potassium (more than a banana), as well as many other essential minerals.

It seems to have been working as the U.S. Potato Board recently reported a significant reduction in the percentage of Americans that think potatoes are bad for them. And forgive the potato industry for not crying in their plates over the recession as according to industry observers consumers declining visits to restaurants, along with the inherent price/value potatoes provide have led to a strong year of potato sales.

“Potatoes have always been the best value in the produce section,” says Seth Pemsler, vice president, retail/international for the Eagle, Idaho-based Idaho Potato Commission (IPC). “Where else can you get five pounds of produce for just a couple of dollars? So the recession has fueled the reemergence of the potato and the fact that people no longer perceive them as bad just reinforces that.”

Price is right

Observers estimate that at times potato sales have been up as much as double-digits, but on average are up 5% to 6% over the past year on volume. And its volume sales—more than dollar sales—that many observers believe are the more import numbers to track.

Another factor that led to increased potato sales this past year were the decrease in prices, which most retailers passed onto their shoppers. As observers expect prices to increase this year, some are curious to see how retailers adjust their prices. Most don’t expect much if any drop-off in consumer sales, however.

“I’d like to think that potatoes are a staple and that consumers are not that price sensitive,” says Jim Ehrlich, executive director of the Colorado Potato Administrative Committee (CPAC), based in Monte Vista, Colo. “However, a couple of years ago prices did get really high and consumption fell off a little bit. So I do think prices can get too high at retail, hopefully we don’t go back there again.”

As a staple food, and one that consumers are quite familiar with, comes the risk that consumers may sometimes overlook potatoes for a produce item they may perceive as more exotic. However there is more to the potato category than just russets and reds and there are more ways to prepare potatoes beyond baked and mashed. According to observers, specialty potatoes, such as yellows, purples, creamers and especially fingerlings, continue to gain consumer favor.

“We are seeing a greater focus on specialty potatoes in smaller sizes, fingerlings and value-added SKU’s,” says Ralph Schwartz, director, value-added marketing for Idaho Falls, Idaho-based Potandon Produce.  “Color, flavor and size are creating new excitement in the potato category and enticing new shoppers to buy.”

Observers say specialty potatoes not only generate increased interest with consumers, they also lead to higher basket sales. According to industry reports, when consumers buy potatoes at the grocery store their total basket ring is up 205%. When they buy specialty potatoes that ring is up almost 270%, so consumers are spending an extra 65% when they buy specialty potatoes. Observers expect that increase comes from the purchasing of higher-end meats for the creation of more interesting dishes.

Get creative

It is those creative dishes that have also spurred spud sales. It seems today most consumers get their dinner ideas from one of three places, television programs on channels like The Food Network, recipes from the Internet and even though visits are down, Americans are taking more from their restaurant visits than just a meal.

“Restaurants are a great place to get ideas for home cooking,” says Ted Kreis, marketing and communications director for East Grand Forks, Minn.-based Northern Plains Potato Growers Association. “There have been a lot of changes in the way potatoes have been presented at restaurants in recent years. Ten years ago you would never see a mashed potato with skins on it. Now it’s commonplace.”

According to Robert Tominaga, president of Heyburn, Idaho-based Southwind Farms, consumers are definitely taking notice. When it comes to fingerlings, for example, he says everything begins at food service. “When a consumer sees and tries [a fingerling] in a restaurant and they like it they are going to the supermarket and asking ‘how do I get these?’”

Although Southwind Farms wants to increase its fingerling sales at retail, Tominaga says they must be careful because they do not want them to become a commodity sold at every mass merchant and discount food store.

“We want our fingerlings to remain something with a little mystique, with a high-end perception and as a value-added product. In that regard we are still trying to figure out the best way to educate the consumer.” Tominaga lauds the efforts of the IPC for taking special potatoes under its wing and getting the message across to consumers via entities such as The Food Network. Of course the next step is getting retailers on board as well.

Observers say that “with little doubt” specialty spuds can be doing even better with just a little help from retailers. However, most retailers are not putting as much money into promotions and sampling as they used to, thus putting a damper on some marketing ideas such as sampling and floor displays. Opportunities still exist with POS material and IPC’s Pemsler says there are plenty of organizations that will provide retailers with an array of recipe cards among other display items.

“It’s not rocket science,” says Tominaga, “but informing the consumer on plating and how to cook them, that can be useful. The retailer can inform the consumer on what proteins and other carbohydrates and starches can be paired with them.  We have our own chef and she does a lot of research and development for us and we present that information to retailers.”

It’s all about location

Location in the aisle is very important as well. Because potatoes are something shoppers seek out, retailers often put them in the back of the produce section, forcing consumers to walk through the entire aisle to get them. Observers urge retailers to change that thinking, especially when it comes to the specialty items. They also suggest including them in store circulars. Sometimes it is easier said than done.

“Though these varieties are growing, there is a retailer mentality right now that the consumer is so focused on value, which translates to price, and the value really comes from traditional potatoes right now, so they are a little hesitant to promote varieties,” says Pemsler.

“I would turn that around and say consumers may not be able to eat out any more, but mom can afford to do something special for her family for a couple of dollars. So I think retailers are missing out on letting families that are struggling indulge in something affordable.”

Potandon’s Schwartz adds that another area of growth is with the younger consumer and finding ways to get this demographic to start cooking with potatoes more. He says Potandon is continually developing new products intended to provide consumers the convenience they need to use potatoes more frequently. For example, their newest product, Klondike Express, is Klondike Rose potatoes in a shelf-stable steamer bag.

This entry was posted in 2010 10 Article Archives, Focus on Fresh. Bookmark the permalink.