Changing The Shape of Spuds

Originally printed in the February 2018 issue of Produce Business.

Steamer tray, bags and wraps offer convenience, time savings and affordability.

Wayne E. Bailey Potatoes

Photo Courtesy of Wayne E. Bailey Produce Co.

As consumers hunt for quick, easy ways to put fresh, nutritious food on the table, they’re finding more options in the expanding range of value-added potato products in the produce sections of their favorite supermarkets. These options — fresh-cut, wrapped, in microwaveable trays or steamer bags, with seasonings or without — are bringing new life to the time-honored spud.

“Value-added is creating excitement around the potato category, which is great,” says Ross Johnson, global marketing manager for the Denver-based Potatoes USA, which represents the country’s more than 2,500 potato growers.

IRI Unify data for 52 weeks ending Dec. 7, 2017, shows value-added with a 7.7 percent share of total category dollars, and with 4.5 percent dollar growth. Johnson says while value-added represents less than 3 percent of potato volume, “the numbers are growing, which really shows how much consumers appreciate having the work taken out of the preparation side.”

“People are increasingly time-starved these days, particularly families with children, who are looking for easy, healthy, affordable ways of putting meals on the table,” says Kendra Mills, marketing director for the Prince Edward Island Potato Board in Charlottetown, PEI, Canada. “Potatoes fit into all of those categories.”

One of the newest products to seize the opportunity is RPE’s Tasteful Selections SteamPak Mini, launched at the Produce Marketing Association show in October 2017. Each box contains four bite-sized potatoes, Ruby Sensation or Honey Gold. “They are microwaveable and ready in four minutes, after which the chef simply garnishes or seasons to taste,” says Tim Huffcutt, marketing director for the Bancroft, WI-based company.

RPE’s value-added potato lineup also includes Take & Shake Cups, snack-size servings of potatoes with flavors such as chili lime and Cheddar cheese, and Season & Savor trays of mini potatoes.

“There’s been this explosion of new flavors and interest in experimenting with new tastes and combinations,” says Jim Ehrlich, executive director of the Colorado Potato Administrative Committee in Monte Vista, CO. “I think the potato plays right into that.”

Most of the value-added products have something in common besides potatoes: the microwave. “That’s definitely kind of been the trend for quite a while,” says Ehrlich. “Everyone’s got a microwave. I don’t see that going away, because of the time value.”

“Value-added and convenience segments are where most food categories are moving, so it is important for potatoes to keep up with that direction as well,” says Mills. “We are definitely seeing growth in that segment — with creamers/minis, smaller pack sizes, steamer bags and other convenience elements added to potatoes — which is great.”

Janet Burton, The Little Potato Company’s vice president of sales for North America in Edmonton, Alberta, says the company’s microwave- and grill-ready kits continue to experience “excellent growth.”

“Our little potatoes are ideally suited to today’s consumer,” Burton says, “They’re healthy, convenient, require no peeling and they’re easy to prepare.”

In addition to the kits, bags of the company’s six exclusive varieties of fast-cooking creamers are popular with on-the-run consumers. “We are very meticulous about our sizing. We want to make sure our consumers have a consistent experience every time they buy our products.”

Wada Farms, based in Idaho Falls, ID, markets Smalls, its line of “artisan” mini gold and red potatoes that cook in about five minutes. “Petite potatoes continue to gain market share, posting double-digit growth trends and now accounting for 14 percent of all fresh category dollars, up two percentage points since 2015,” according to the company.

“Value-added potato sales increased 92 percent year-over-year (2017 vs. 2016), with trays and micro-steamer bags showing the highest growth at 172 percent. Trays and micro-steamer bags represent a 75 percent share of all value-added sales,” says RPE’s Huffcutt. “Given the trends and growth trajectory, we believe a doubling of value-added potato sales over a three-year period is possible if not probable.”

‘No One Demographic’

According to industry experts, there’s no one demographic driving that growth.

“Value and convenience potato purchasers skew to older males without children in the household. Baby Boomer men also index high. Regionally, the Midwest over-indexes versus other parts of the country,” says Huffcutt, citing the spring 2015 United States Potato Board Segmentation Study.

Retailers such as K-VA-T, the Abingdon, VA-based parent company of the Food City supermarket chain, see Millennials and Baby Boomers gravitating to the “quick meal solutions, something microwavable, or in a smaller package,” according to Keith Cox, produce category manager. “We carry one- and two-bite potatoes from Tasteful Selections. We’ve got a 16 oz.-package of microwave-ready honey gold potatoes, little two-bite potatoes. They’re so simple. You just pop them in the microwave. These products appeal to your younger and older groups, who tend to shop more than once a week, maybe two to three times a week. They want something in a small package that’s easily fixed or quickly fixed. They shop for what they need, when they need it.”

Although time and convenience funnel shoppers to value-added potato choices, eco-consciousness is another appeal to consumers, says Eric Beck, marketing director for Wada Farms. “Millennials are focused on what they need at a particular time, so there’s very little food waste. And empty nesters are trying to buy just what they need and reduce the amount of waste they would have.”

Huffcutt notes one difference between the older and younger consumers. “While they are just as apt to purchase single-serve items such as a sweet potato or Russet wrap, there is a distinction between Baby Boomers and Millennials because the younger generation also is looking at complete meal solutions. For them, our Tasteful Selections value-added Black Pepper, Rosemary & Thyme — or Smokey Bacon Ranch-flavored potato trays represent one less meal to spend a significant amount of time thinking about or, indeed, preparing. The younger audience goes a step farther in showing loyalty to providers of total meal solutions.”

And that’s where meal kits come in.

“We are seeing a huge influx of meal kits into the market,” says Johnson, of Potatoes USA. “And we’re seeing a lot of innovation around the meal kit category. It’s very difficult for us to track how much potato volume is going through the meal kits. But potatoes offer the most nutrition at the best value, so it’s definitely an item a lot of meal kit suppliers are looking at.”

“Food retailers are creating their own meal kits, and we’re only going to see that grow because of time demands on the consumer,” says CPAC’s Ehrlich. “Potatoes can bind with many things. You can eat almost any protein with a potato — from fish to beef to chicken to pork. You can make potatoes work with any flavor.”

Provide A Pop Of Color

Potatoes are a staple in Food City’s store-assembled meal kits. “The meat department is doing some meal kits, which will have the proteins, and potatoes, carrots, cauliflower… They always have to use some produce items to make their meat look good,” he says.

That pop of color Cox proudly boasts of is another value the potato adds.

“We’re starting to see the consumer pay a little more attention to the variety of potatoes,” and that includes color — the blue/purple and the multicolored fingerlings,” says Wada’s Beck.

Convenience comes at a price, but these industry experts generally see that as an opportunity rather than a deterrent.

“Potatoes are a good value to begin with. They provide a good opportunity for a markup,” says Ehrlich. “Something that’s a time saver for people, a convenience feature … that’s the value it’s adding, in my opinion. They’re going to cost more; there’s no question. If it’s the price factor, they’re going to stick with the 5-pound bag.”

“Pricing plays a role in sales as it does in any category,” says Mills. “Potatoes are a staple item and we know they are used as loss leaders to bring people into the stores, and that consumers do respond to sales. However, in an exit survey done in the retail environment in the United States a few years ago, people had a difficult time recalling what they paid, per pound, for potatoes. They did know that the consumers felt it was good value and, particularly for larger-sized bags, many meals could be served. I think that is great learning for our industry, and focus on maintaining good value, versus the lowest price.”

“Occasionally price point might be a barrier to repeat purchases, where the consumer believes $3.99 is acceptable for steamable, bite-sized potatoes … but only if her kids love them,” says RPE’s Huffcutt. “In this scenario, the four family members in the consumer’s kitchen become a mini-focus group of sorts, issuing a ‘like’ or ‘dislike’ verdict and influencing the decision about possible future purchases.”

“Potatoes in general are pretty price inelastic … consumers are not affected too much by the price,” says Johnson. They’re the most purchased fresh product, period. … 88 out of every 100 shoppers actually buys potatoes.”

Retailers should capitalize on the overall popularity of potatoes to help boost sales of value-added products, says Johnson. “When I walk into the store, there’s so much excitement about the value-added category. Retailers are almost overemphasizing them, to the detriment of bagged and bulk potatoes. I’d like retailers to recognize the power bagged and bulk still have. There’s an opportunity for retailers to cross-promote together, where the consumer buys a bag of potatoes and a value-added option. Consumers want to have potatoes on hand at home, but they also enjoy having the value-added product on hand for when they’re in a time crunch and want to get something quickly.”

Huffcutt says RPE encourages “across the aisle” merchandising discussions among produce, deli, meat department and other managers. “One retail customer increased sales of SteamPak Mini value-added potatoes by choosing an unconventional deli merchandising solution adjacent to rotisserie chicken.”

Cross merchandising Works

“Clever merchandising of complementary items attracts attention and generates sales that appeal to suppliers and retailers alike,” says Huffcutt. “For value-added potatoes, we recommend asking a question like, ‘What is a favorite protein source to pair with this item?’ Or, ‘What main course fits well with this product?’ ”

In addition to working with retailers, industry experts advocate an educational outreach to consumers. Most of them are vigorously engaged across the social media spectrum. The Idaho Potato Commission features dozens of bloggers on its website. The more consumers know about potatoes — fat-free, and rich in potassium and vitamins C and B — the better.

“I think there is always room for education in the potato category,” says Mills. “With so many choices — variety, type etc. and best uses for types of potato, I think that is where consumers would best benefit.”

Ehrlich of CPAC says, “consumers want to know more about their food than they’ve maybe ever wanted to know. They have more time to learn about it. They don’t have the connection to Grandma and Grandpa and the farm anymore. And nutritional education in the public schools is sketchy at best.”

He says consumers want transparency and are more likely to seek information from independent sources, bloggers and influencers.

Wada’s Beck says there’s still so much consumers can learn about potatoes. He sees a future where consumers are as savvy about the more than 200 potato varieties as they are about apples, for instance.

“There’s a lot of potential,” he says. “Hopefully consumers will get to the point where they’re looking for specific varieties of potatoes. The consumer doesn’t know the difference between a Norkotah and a Teton. To them it’s just a Russet potato. But five, 10, 15 years down the road we can get to where consumers have varietal preferences for potatoes.”

At Food City stores, where potatoes are the top seller in produce, 10-pound bags dominate. But value-added products have found a niche.

“The microwavable packaging with the different varieties — it’s still a potato. It’s just a different way to merchandise, sell it and package it,” says Cox. “And every now and then they hit on something that really works out well for the consumer, which is what we’re trying to do anyway.”