Potato sales tend to slow down at the beginning of the year. By keeping them front and center in the produce department, retailers can keep them front of mind for consumers.
The holidays are over. Gifts have been exchanged, wine bottles are empty and leftovers have been devoured. Consumers are ready to jump back on the bandwagon and kick the new year off on a healthy foot.
It is the time of year that potatoes should thrive; yet many consumers overlook the category. They are “potatoed out” say industry observers; they are a staple on the holiday table and do not come to consumer’s minds after the season passes. The potato category is, however, so much more than just mashed russets and sweet potato casserole.
Even during this down time, specialty varieties are gaining ground, but there is still plenty of room to grow, say observers. With this year’s abundant crop currently deflating russet prices, specialties may be the key to making a profit at retail this upcoming season. Making consumers aware of specialty potatoes nutritional value, flavors and uses is the key to getting them into shopping carts.
According to Nielsen Perishables Group research commissioned by the Denver-based U.S. Potato Board (USPB), the more types of potatoes a household uses over the course of the year, the more they spend on potatoes. Consumers are adding new varieties into their meals, not replacing russets, says Don Ladhoff, USPB retail program consultant. “Nationally 40% of households use only one potato type. This is especially the case in the Midwest where shoppers tend to be more russet-centric.
“Retailers are beginning to show a lot of interest in leveraging the russet volume to expose shoppers to additional varieties. It is about growing category volume by growing household penetration,” Ladhoff adds.
Now is the time. Potato Lover’s Month (February) is just weeks away, along with the Idaho Potato Commission’s (IPC) Retail Display Contest. Many growers are adding extra incentives to retailers who feature specialty and value-added potato products into their displays.
Klondike Rose, for example, is one potato that Potandon Produce hopes gets a lot of face time during this February promotion. Potandon is working with the IPC to match the dollars awarded in the display contest if the setup includes Green Giant Fresh, Sunfresh, Klondike Rose, Klondike Goldust or Klondike Gourmet Potatoes. There is also a bonus prize available, says Barbara Keckler, marketing supervisor for the Idaho Falls, Idaho-based grower. “It will pay $500 to winners in 1st through 5th place and an extra $100 for honorable mention—and Potandon is happy to provide POS materials for the display.”
Providing retailers with materials may be a tall order. Last year’s contest topped 2,500 entries and the IPC expects it to continue to grow. In its 22nd year, the display contest will be awarding $150,000 in cash and prizes, has a new partnership with Hormel and is expanding to include additional contests in the Caribbean and Mexico. “We want to get the Caribbean and Mexico excited for Potato Lover’s Month,” says Seth Pemsler, director of retail and international for the Eagle, Idaho-based IPC. “This is a dead time for produce and the contest draws attention to the entire section, not just the potato category. The tie-in with Hormel should help stimulate additional produce growth—people who use bacon bits on their potatoes will also want chives, and there you have another produce item.”
With potatoes on the mind, the hope is consumers will be more open to trying new value-added and convenience products. Observers agree that value-added bagged offerings have brought the category significant growth. Offerings such as Eagle Eye’s Simply Good Diced Flavorful Potatoes, although it will not be officially launched till the end of the first quarter of 2013, are pushing the limits of value-added potatoes. The package of potatoes and onions come vacuum-packed with seasoning and can be cooked in the microwave or skillet. Company officials say the fresh product received a positive response at the Produce Marketing Association’s Fresh Summit for its flavorful varieties and the 21-day shelf life.
The Idaho Falls, Idaho-based grower will also be working with the IPC on its Potato Lover’s Month campaign. Lance Poole, vice president of sales for Eagle Eye, says that while the promotions and special pricing help stimulate sales at beginning of the year, the company works with its customers one-on-one year-round.
RPE has also turned to the microwave. The Bancroft, Wis.-based grower expanded on its popular Tasteful Selections line of baby potatoes to include two microwaveable items—its Honeygold and Ruby Sensation varieties. “The convenience category continues to grow and these are perfect for the consumer that needs a quick meal that delivers the same great flavor of our conventional Tasteful Selections. The potatoes are evenly sized and cook in just six minutes,” says Randy Shell, vice president of marketing and new business development, adding that the grower is constantly testing new varieties for future growth of both the conventional and microwaveable baby potatoes.
Shell, however, believes retailers should use Potato Lover’s Month to move larger quantities of russets to offset some of the deflation through increased volume. “I think it will be a challenge to obtain positive dollar sales compared to a year ago,” he says. “Our goal is to promote potatoes all year with a good mix of product, including russets, reds and specialty potatoes. This allows us to promote fresh potatoes all year long and keep retailers actively promoting the category to drive consumers to trying something different during the year.”
Chris Wada, director of marketing for Wada Farms Marketing Group, based in Idaho Falls, Idaho, agrees that it is a great time to promote 5- and 10-pound bags of russets, but to also “incorporate colored varieties, microwave-ready, tray packs—all sorts of stuff. It is a great time to get people to try new products.”
One variety that many consumers are after is fingerlings. The oblong-shaped specialty variety is popular in foodservice and people want to use them at home, say observers. The growers over at Southwind Farms are hearing this firsthand.
“We have had a few consumers contact us via our website or on the phone to order them direct because they cannot find them in their local supermarkets,” says Robert Tominaga, president of the Heyburn, Idaho-based grower. “Consumers are seeing them in restaurants, on TV and in other media, and the presence exceeds retail, especially in smaller cities and areas of the country. We have one woman who calls us every two weeks to place an order.” Southwind Farms is stepping up to the demand and will be adding more farming acres next year to boost production 20%.
While Idaho may have Potato Lover’s Month, they are not the only state in the potato game. Colorado prides itself on growing all varieties of potatoes, including the in-demand fingerling. Specialty varieties, says Jim Ehrlich, executive director of the Colorado Potato Administrative Committee (CPAC), are a huge growth market for the state; it continues to grow every year. “They are unique; innovative and they taste good, and I think they are better for you nutritionally. Compared to a russet they are relatively expensive, but I think consumers want something new,” Ehrlich says.
One way the CPAC is spreading awareness of Colorado potatoes is through the schools. The Monte Vista, Colo.-based organization developed a curriculum for students, grades K through 12, with lesson plans devised to teach students about agriculture and potato nutrition. Available to schools nationwide, it includes experiments and nutrition information that follows the students through each grade.
To put kids to the test, the CPAC hosts an annual essay contest for Coloradoan students on the topic: Why are Colorado potatoes good for you? The winner gets their photo on a poster that goes to every school in the U.S. “The educational program is in its third year and we get more and more requests for it each year,” says Ehrlich.
Beyond Potato Lover’s Month
February is a month many hold near and dear to their hearts. Not only is it a month of love with the celebration of Valentine’s Day, but it is also American Heart Month. The focus on health and love open the doors of opportunity for retailers and marketers to highlight the health benefits of spuds.
Don Ladhoff, retail program consultant for the Denver-based U.S. Potato Board (USPB), suggests that retailers play up potatoes’ potassium angle. “Potatoes have more potassium than a banana and they are the lowest cost source of potassium in the entire produce department. The role of potassium in heart health is key so it is the perfect time to talk about that aspect of potatoes.”
The health and nutrition aspect of potatoes plays into the USPB’s seasonal messaging, developed to encourage retailers to change up promotions year-round. During January and February, the theme is nurturing.
According to Ladhoff, the USPB is working with one retailer for a February promotion that will feature red potatoes accompanied by a roasted heart-shaped potato recipe. The retailer intends on giving away heart-shaped cookie cutters with bags of red potatoes.
“It’s a thematic approach that is seen throughout the rest of the store and has made the produce department begin thinking more about how they can align with it,” says Ladhoff. “According to our research 83% of households eat potatoes, but only 40% use red potatoes. Exposing people to this variety through a Valentine’s Day promotion is a clever way to grow the category.”
Brand names have traditionally not been very prominent in the produce department. A giant logo on the side of a bulk display box is not enough to influence purchasing decisions. Yet, with the growth of value-added bagged products brands are now demanding attention and capturing consumer loyalty.
Many potato distributors in particular are revamping their image and logo to appeal to shoppers. Here are some of the latest brands retailers should consider stocking their shelves.
Out of Idaho
In autumn 2012, Wada Farms Marketing Group introduced the Idahoan Fresh label to the fresh market on its 5- and 10-pound bags of russets. Previously the Idahoan brand had only been seen on Idahoan Foods dehydrated potato products, says Chris Wada, director of marketing for Wada Farms. “We have the rights to the label through a licensing agreement and by introducing it to the fresh market we are opening up a lot of cross-promotional opportunities by presenting a consistent look across products.” The Idaho Falls, Idaho-based grower will continue to offer its Wada Farms label, among others.
A sweet look
Wayne E. Bailey Produce already offers its convenience sweet potato products under the Green Giant brand, and has now added its own brand, George Foods. The Chadbourn, N.C.-based grower’s president, George Wooten, says when it comes to convenience items, a brand helps. “I struggled for years with bulk sweet potatoes because there was no brand recognition. Since we started doing convenience items, there has been more of an impact.”
The George Foods lineup will mimic the Green Giant offerings, which Wooten says receives a lot of loyalty and trust from consumers, especially with the Box Tops for Education.
Potato Jazz has become a household name in the microwaveable category, according to the officials at Wilcox Fresh. The Rexburg, Idaho-based company is now building on the brand with new spice profiles. The four varieties—Chipotle, Garlic Parsley, Zesty Italian and Savory Herb—have been a hit in taste tests, says Jim Richter, executive vice president of sales and marketing. He adds that it will feature a smaller-sized potato provided by the Little Potato Co. “Smaller potatoes are the fastest growing, hottest part of the category. We wanted to capitalize on that with a high-quality potato and a spice profile that complements the variety,” says Richter.