Challenges & Opportunities To Sell More Value-Added Potatoes

Though a small niche in the category, potatoes sold as microwaveable, steamable, seasoned, etc., appeal to the convenience-minded consumers.

Originally printed in the February 2021 issue of Produce Business.

The twelve months of 2020 marked the year of the potato at retail. This versatile long-lasting vegetable proved the antidote to bare pantries and the perennial question of ‘what’s for dinner’ when the pandemic hit last year and caused consumers to shop less frequently, stock up on staples when they did, and cook more at home. Overall, fresh potato sales increased double-digits last year, compared to 2019, according to IRI data as provided by Alsum Farms & Produce, in Friesland, WI.

Five-pound bags of potatoes represented nearly half (47 percent) of all package sizes bought at retail. Interestingly, and perhaps even counterintuitively to pandemic buying habits, it was 1- to 4-pound bags of potatoes, second only to 5-pounders, that showed the largest increase in dollar sales and volume sales in 2020 among packaged potatoes. Many of these small packs represented value-added products.

“We saw growth in 5- and even 10-pound bags, but also on the smaller bags of value-added potatoes. I think the key that kept these products moving is flavor and convenience,” says Randy Bohaty, produce director for B&R Stores, a 20-location chain based in Lincoln, NE, which operates under the Russ’s Markets, Super Saver, Grand Center Apple Market and Allen’s Food Store banners.


There is no official industry definition of a value-added potato product. Rather, a description best defines this category.

The value-added potato category is a small niche yet a growing market, representing 5.6% of total fresh potato sales at retail in 2020, according to IRI data as provided by Denver, CO-headquartered Potatoes USA.

“Value-added potato products are items that make the cooking and/or preparation experience more convenient for the end-user, i.e., microwave or oven-ready packaging, small bite-size, par-cooked items, pre-seasoned items or seasoning packets included with items,” says Rachel Atkinson-Leach, director of category and brand management for RPE, Inc., in Bancroft, WI.

The value-added potato category is a small niche yet a growing market, representing 5.6% of total fresh potato sales at retail in 2020, according to IRI data as provided by Denver, CO-headquartered Potatoes USA.

Of these, and in general, the most popular are “microwave-ready potatoes steamed in trays or bags that offer consumers a healthy, quick and convenient potato offering and can be seasoned based on consumers’ taste and preference,” says Christine Lindner, marketing manager for Alsum Farms, which sells its Fast & Fresh! 24-ounce microwave-ready bags or red and gold potatoes and microwavable single russets.


Tray packed potatoes represented over a quarter (26.6%) of value-added potato sales in 2020, up 20.1% versus the year prior, based on IRI information.

According to Christa Wagner, director of advertising and promotions for Edmonton, Alberta-based Little Potato Company, convenience has become an increasingly important driver for consumers as they feel strapped for time between work and family obligations. “According to the National Retail Federation [based in Washington, DC], 83% of consumers say convenience is more important now compared to five years ago, and more than half of consumers (52%) say their purchases are influenced by convenience.

“Our Microwave Ready Kits continue to be top-selling products in our portfolio because they are an easy mealtime solution for busy parents,” she adds. “They are ready-to-use, meaning they don’t require peeling or washing, cook in only five minutes, and have an included seasoning pack. It’s an easy side dish to accompany a protein and veggies.”

“Our best-selling product is our Fresh Blends, which are fresh-cut baby russet, red, and yellow potatoes packed with whipped butter and spices in 1-pound trays microwave-ready in 8 minutes,” says Dallin Klingler, in marketing and communications at Eagle Eye Produce, in Idaho Falls, ID.

The newest value-added product packed in 1-pound microwavable trays from Fresh Solutions Network, LLC, is the San Francisco, CA-headquartered company’s Side Delights Flavorables line. This pairs triple-washed, fresh red and yellow petite potatoes with bold, globally inspired seasoning blends.

“The packaging was designed to appeal particularly to adventurous millennial consumers who are frequently seeking out new and bold flavor experiences, with clearly marked labeling for consumers interested in vegan, non-GMO, gluten-free eating,” says Kathleen Triou, president and chief executive officer.

Fresh Solutions Network’s new Side Delights Flavorables line of 1-pound microwavable trays pairs triple-washed, fresh red and yellow petite potatoes with bold, globally inspired seasoning blends.

Micro-steamer bag products also contributed over a quarter (25.9) of value-added potato dollar sales in 2020, although only up 7.7% versus the year prior, based on IRI information from Potatoes USA. An example of this product is Fresh Solution’s Network’s Side Delights Steamables. The line includes B-size red, golden, fingerling, sweet, medley and duo (combination red and yellow) potatoes.

“The gross sales we’ve seen in the 24-ounce steam and flavored steam value-added potato products have been fantastic. In fact, there was huge dollar growth in these products in Q4 as we saw a trend toward smaller gatherings rather than large holiday parties,” says Jeff Cady, director of produce and floral for Tops Friendly Markets, a 157-store chain headquartered in Williamsville, NY.

Single wrapped potatoes, ready to grill or microwave, represented nearly one-quarter (23.4%) of value-added potato dollar sales in 2020, up 11.9% versus the year prior, based on IRI information from Potatoes USA.

“Our Easy Bakers, in 8-ounce and jumbo 14-ounce single Idaho russets, do well,” says Kevin Stanger, president of the Wada Farms Marketing Group, in Idaho Falls, ID.

Among Eagle Eye Produce’s newest products is a 4-count Idaho russet baking potato wrapped in microwave-safe film, according to Klingler. “Sustainability is a big trend right now within the industry, and we are hoping our customers see the potential with this product.”


1. VARIETY. The number of SKUs throughout the produce department took a hit in 2020 due to the pandemic as retailers sought to increase supply chain efficiency by concentrating on the top-selling categories and products in those categories. For fresh potatoes, this meant an emphasis on commodity and larger bags.

However, according to Eagle Eye Produce’s Klingler, “We have seen that adding diversity of offerings within the potato category lifts sales overall. Fresh, refrigerated, and value-added products overall have gained 5-plus percent within the retail space. We see this growth continuing within the potato value-added category.”

2. COST VERSUS VALUE. The price of value-added potato products could be a deterrent to purchase for some households in these tough economic times. Consider that the average price per volume of flavored tray and microwave steamer potato products averaged $3.72 and $3.02, respectively, in 2020, compared to the fresh potato category overall average of $.77, based on IRI data provided by Potatoes USA.

“Retailers need to remember that for many shoppers, this is their first time seeing these items. Value-added potato products don’t have the national awareness like items in the snack space. These items need time to grow awareness and time for customers to try them out and return,” says Eagle Eye Produce’s Klingler.

The challenge for retailers is to shout from the mountain tops that they sell these types of potatoes and tell shoppers why they are worth the premium price, adds Fresh Solutions Network Triou. “For example, explain what they are and how they can be incorporated into healthy, quick to prepare dinners. My go-to: deli rotisserie chicken, Side Delights Steamables or Flavorables and a bagged tossed green salad. Bam! Healthy dinner in under 5 minutes!

“At some point, the pandemic will be done, and we’ll return to some hybrid workweek schedule consisting of a flexible at-home and at a place of work schedule. The stressors of the past will return, and shoppers will be looking for convenience and value-added produce again. So, it is not too late or too early to educate them now to the benefits of these items.”

The opportunity for retailers to capture a higher price per pound on a value-added potato offering versus a bag product is significantly more, says Alsum Farms’ Lindner. “Value-added potato products appeal to consumers seeking convenience and are willing to pay for it. Retailers who dedicate the shelf space to trial value-added potato products, create in-store awareness and promotion, will be one of the best ways to measure how the performance of value-added potato products generates to the overall potato category.”

“Value-added potato products appeal to consumers seeking convenience and are willing to pay for it,” says Alsum Farms’ Lindner.

3. FINDING SPACE. Where to merchandise value-added potato products, i.e., in a potato destination or elsewhere, has long been a challenge.

“Merchandising and finding space for these value-add items is probably the biggest challenge for retailers, but also an opportunity to add incremental sales without taking space away from core items,” says RPE’s Atkinson-Leach.

At B&R Stores, value-added potato products are displayed as part of the retailer’s regular potato category, according to Bohaty. “If we have them on an ad, we’ll also include them in a promotional display.”

Having a fresh, well uniformed and merchandised potato category with point-of-sale recipe ideas, educational signage on storage and preparation of fresh potatoes is key to increasing sales of potatoes at retail, says Alsum Farms’ Lindner. “Well lit, eye-catching market-like potato displays are visually attractive to consumers. We eat with our eyes and attractive displays will help maximize potato category profit margins.”

At Tops Friendly Markets, value-added potatoes are merchandised with other value-added fresh vegetables.

“We’ve had a refrigerated convenience section in our produce departments for the past five years,” says Cady. “It’s here we have the small bags of value-added potatoes. The products turn so fast that having them in a refrigerated space isn’t a concern. Yet, because most of these products don’t require refrigeration, we’ll use shippers as a point of interruption and put the ones that take just a few minutes to microwave and perhaps have flavorings in the deli next to the rotisserie chicken and then the creamers that require some cooking in the steaks and roasts in the meat department.”

Eagle Eye Produce has seen a lot of success in offering display shippers to its retail partners.

“We usually pair these with ads. These displays give our retailers an easy way to add a second location for merchandising or to cross merchandise and brings items up to eye level for shoppers in-store which is essential for raising awareness and creating repeat customers,” says Klingler.

Eye-catching point-of-sale displays are a great way to grab consumer attention in-store, says Little Potato’s Wagner. “This is why we unveiled new point-of-sale displays last year with bold graphics and eye-catching messaging that communicates simple, ‘no recipe’ ideas to cook with our Little potatoes.”

To inspire shoppers and grow basket size, Wagner says the company has also seen success when cross-merchandising Little Potato products with other items that can be combined for a healthy meal, including fresh produce and proteins like chicken.

4. COOKING AT HOME. Since the start of the pandemic, 83% of all meals in the U.S. are prepared in the home, according to IRI data provided by Fresh Solutions Network. This has been driven by stay-at-home orders and restaurant closures. With the extra time to peel and cook spuds from scratch, there’s the potential challenge that shoppers won’t be interested in value-added products.

“For young consumers — especially those belonging to Gen Z — this is the first time many have had to prepare their own meals,” says Fresh Solutions Network Triou. “So, while Gen Z now knows the cost savings of cooking from home, they also recognize the time and effort involved in cooking. I anticipate — and here’s the opportunity — that once these consumers return to their physical workplaces, and time is constrained again, they may want to keep up with some of their at-home cooking. But, they will do so with convenience-based value-added items to shorten the time to table while keeping meals healthy and cost-conscious versus restaurant-eating.”

Innovation and consumer demand for convenient meal solutions will continue to drive the value-added potato category, according to Alsum’s Lindner. “Innovators will continue to develop meal kits and ready to eat products with ethic flavor profiles for consumers who seek fresh, healthy meal solutions.

Additionally, Eagle Eye Produce’s Klingler believes that value-add products help drive consumption within the fresh category. “We notice that when we use promotions on value-added and small pack items, they bring customers to the potato category, which makes it easier to upsell your staple items, like a 5-pound bag of russets.”