As consumers look to replicate meals they enjoy in restaurants and see on TV, specialty potatoes continue to grow in popularity.
By Craig Levitt
Who is more important to a football team, the flashy kick returner who may thrill the paying customers once in a while, or the steady, tried-and-true running back, who provides value on almost every play?
Of course it is the running back. When it comes to the produce department, while cherries and other seasonal items are the kick returner, generating much short-term excitement, it is potatoes doing the heavy lifting—and money making—often without any of the glory.
According to industry sources, potato sales waver between the fourth- and fifth-largest profit category in the produce section and are number one in terms of volume. Because of that, some industry observers are puzzled that produce managers don’t put more thought into merchandising their spud selections.
While paying closer attention to the category would likely improve sales, most growers and suppliers understand a retailer’s thought process. They cite that potatoes are an easy category to purchase for a retailer because there is not that short shelf life, seasonal nature or the multiple global locations to buy product from like there are for some other produce items.
“The complexity of purchasing potatoes is easier,” says Seth Pemsler, vice president, retail/international for the Idaho Potato Commission (IPC), based in Eagle, Idaho. “So a [retailer’s produce] buyer tends to spend less time and energy on it. Of course the reality is, if potatoes are the fourth or fifth largest profit category and has the greatest volume, retailers are probably missing opportunities by not spending the same amount of energy on the category as some of the others.”
Many of those opportunities come in the form of specialty potatoes such as fingerlings, reds, yellows, purples and creamers. Observers say that despite the fact that Americans are frequenting restaurants less, when they do go they are paying more attention to what they are eating, and that includes side dishes like potatoes. Cooking shows have also gone a long way toward introducing consumers to specialty potatoes.
“The first point of contact is either a restaurant or the Food Network,” says Robert Tominaga, president of Southwind Farms, the Heyburn, Idaho-based grower and marketer of primarily fingerling potatoes. “Fingerlings are a little intimidating because most people don’t know how to cook them. If they see them in a restaurant or on TV first, then when they go to the supermarket and find them its not as scary.”
Many growers and shippers help educate consumers by providing health benefits and recipe information on their websites. While Wilcox Fresh does do that, the Rexburg, Idaho-based company takes educating consumers a step further. “We also have a category manager that doubles as our corporate chef,” says Jim Richter, executive vice president of sales and marketing. “He appears at food shows and trade shows, using them as a way to get in front consumers, as well as our customers, on how to cook fingerlings and provides easy to use recipes. The great thing about potatoes, even fingerlings, which can be intimidating, is that once you know how, they are easy to prepare.”
To help consumers better understand how to cook fingerlings, and other specialty potatoes, the IPC is now providing QR (quick response) codes for retailers’ use. The QR codes go directly to the IPC website, which has the ability to list dozens of fingerling recipes.
These recipes, in addition to increasing the likelihood that shoppers will buy the fingerlings—creating incremental sales—also list all the other items needed for a particular recipe, thus increasing revenue in other parts of the store as well. The QR codes will be available to retailers in a number of ways.
“We will go to a retailer and say, ‘how do you want this? You can put it your ad, do you want signage in-store, a sticker to put over existing pricing, do you want a tear off pad—retailers have plenty of options,” says Pemsler.
A potato a day
The fact that fingerlings are different has also helped sales, says Tominaga, who likens the potato category to the apple category about 25 years ago. “Twenty-five years ago people would think apples and only think of one or two varieties,” he says. “Today a produce section has 10 apple varieties and they are all a little different, with their own individual attributes. That’s the same with specialty potatoes and fingerlings specifically. They cook different, they look different and they are a little healthier as well.”
As new apple varieties have entered the landscape the space allotted by retailers has grown. Observers say the same can happen with potatoes—with better sales results. The belief with apples is that the increase in varieties does not always translate to increased usage. With potatoes, many say that the increase in varieties will lead to increased sales.
“The more progressive retailer sees specialty potatoes as a way to expand the category and create more usage occasions,” says Wilcox’s Richter. “The commodities are going to have the tonnage and be the driver, but the fingerlings give the reason for the shoppers to make an additional purchase during the week.”
More likely, say observers, sales of specialty potatoes are taking away from other starch dishes like rice and pasta. The IPC’s Pemsler points out that many retailers seem to understand this, otherwise, “why would a retailer who used to carry only one or two varieties of potatoes all of a sudden carry 12,” he asks. “They wouldn’t if it was cannibalizing the category. They would only do it if it were growing the category.”
Increased specialty sales also mean increased profits, as margins on specialty potatoes are higher than on russets. Again, and unfortunately, the retailers that allow potatoes to “sell themselves” are hindering profits.
To often, say observers, retailers place russets in front of the store, encouraging shoppers to pick them up immediately. While that certainly leads to sales, once that shopper puts that 5-pound bag of russets in the cart they cross potatoes off the list, not even bothering to look for the higher margin items. Other retailers do not even bother promoting potatoes, assuming that shoppers will buy them.
“Potatoes are so part of our life that some grocers think that consumers are going to just find them and buy them, no matter what,” says Ted Kreis, marketing and communications director for the Northern Plains Potato Growers Association. “In truth they are one of the lowest priced items in the produce department. They are a staple item and it is smart to promote them, getting people to come to the store.”
Kreis adds that the East Grand Forks, Minn.-based association is a strong supporter of the U.S. Potato Board and its “Potatoes… Goodness Unearthed” campaign. Kreis likens the campaign to the dairy industry’s “Got Milk” campaign as far as generating consumer awareness.
According to the U.S. Potato Board, based in Denver, the “Potatoes… Goodness Unearthed” campaign is designed to help consumers connect with the fact that potatoes are a healthy food. The message now appears on potato packaging at retail and can be seen throughout marketing and promotional materials.
Also, as part of its continuous efforts to educate consumers of the nutritional benefits of potatoes, the U.S. Potato Board’s “Peel Back the Truth” print campaign features a peeled potato with a different nutritional message extolling the virtues of potatoes. These campaigns are also designed to dispel some of the myths and misconceptions associated with potatoes, such as a recent Harvard University study published in the New England Journal of Medicine that singled out potatoes as a cause of weight gain.
Officials from the U.S. Potato Board are quick to point out that potatoes are vegetables and a medium size potato contains just 110 calories per serving, has more potassium than a banana, provides almost half the daily value of vitamin C and contains no fat or cholesterol.
“Fresh potatoes are frequently victims of association,” says Tim O’Connor, CEO of the U.S. Potato Board. “If you order a fully-loaded baked potato the calories you should be worried about are coming from toppings, not the potato.”
Along with merchandising potatoes differently, Jim Ehrlich, executive director of the Colorado Potato Administrative Committee, based in Monta Vista, Colo., says retailers can also put more emphasis on training produce people on how to better handle potatoes. Practices such as covering them at night, rotating stock and keeping a good amount cool in the back should be followed. Of course eventually it comes back to display.
“Ultimately, the best way retailers can sell more potatoes is to have attractive displays that use all the varieties of potatoes,” says Ehrlich. “Have them all together and provide some information on how they can be used. That would go a long way toward selling more potatoes.