This ‘Spud’s’ For You

Potato Retail Display

Promoting potatoes at retail is vital to success.

Redners PotatoesPotatoes are such a staple in the American diet that it’s easy to take them for granted. After all, with potatoes a part of many meals, you might think they sell themselves. But while supermarket produce sections have long offered several types of potatoes in different-sized packaging, these vegetables can benefit from effective marketing, leading to increased sales.

“Potatoes seem to have become the forgotten category in the produce department because it is such a dependable item,” says Ross Johnson, global marketing manager for Potatoes USA, Denver. “You usually find potatoes at the back of the category, or toward the end of the produce department. Our sales in April 2017, when compared to April 2016 in terms of volume, were up 10.4 percent, and dollars were up 9.2 percent. We recognize a lot of this shift was due to the Easter holiday, but being up double digits was very exciting.”

While promoting a food that has been around so long and that virtually every shopper knows about may seem difficult, opportunities abound. Lesser-known varieties are growing in popularity, and microwavable packs are a potential game changer — advantages that should be promoted.

Potato Sales

Tom Barnes, chief executive of Category Partners, a strategic retail solutions company based in Idaho Falls, ID, says potato sales have been slowly declining in recent years; but he’s seen an uptick in the past 12 months. That increase, he says, is a result of new items, new varieties and the overall value potatoes represent.

In the past five years, potato sales have been helped by new varieties, new packaging and the growth of organics, as well as new value-add products. But that doesn’t mean the industry can rest on its laurels.

“It’s got to continue,” says Barnes. “Retailers have got to continue to ask for innovation, and suppliers must be willing to change.”

Johnson says Russet potatoes account for 65 percent volume share of the category. “Yellow and red potatoes also contribute to the category in share points at 18 percent and 10.3 percent, respectively,” he says. “The Fingerling is becoming very popular, but the growth numbers are a little overstated with a .3 percent share of the category.”

Organic and Local

According to Barnes, there has been growth in organic potatoes. “As availability and production have increased, so have sales,” he says. “So a lot of positives are taking place.”

Marc Turner, sales manager for Bushwick Potato Company in Farmingdale, NY, says local and regional are the newest trends, and are becoming more popular than organic. Summertime, he added, is when locally grown potatoes are being harvested and sold, as opposed to storage crop spuds that are sold during other times of the year. This creates a seasonal marketing opportunity during the summer.

“So this time of year, growers in Delaware are about to be harvesting and shipping potatoes, so this is a good time to promote that,” he says. “A lot of supermarkets are already on the locally grown or regionally grown potatoes. This is not a new thing; it’s almost replacing organic, which used to be the buzz and the hot topic.”

Turner suggests emphasizing the local connection by marketing potatoes with pictures of a farm and other promotional information. “That’s an added boost because you walk into a supermarket and it says ‘regionally grown’ or ‘locally grown,’ meaning it is truly in the state or county that you live in; people are drawn to visuals,” he says. “Include a picture of a farm alongside the potatoes makes that connection. I think people would gravitate to that, and maybe buy more.”

Opportunities

According to Barnes, potatoes are returning to the American diet. “The best trend we’re seeing is potatoes are back on the dinner plate,” he says, adding that for the year ending June 11, 2017, fresh potatoes experienced a .1 percent volume increase at retail. “While that may not sound very significant, when you consider potatoes are a more than a 4 billion-pound category, and considering we’ve been seeing declines, it is good news. Potatoes also retained their position as the No. 1 fresh vegetable in the produce department, with more than 9 percent of the fresh veg volume.”

Ralph J. Schwartz, vice president of sales for Potandon Produce in Idaho Falls, ID, says that while retailers and the potato industry focus on expected avenues of promotions — pairing baked potatoes with steak or showcasing mashed potatoes at Thanksgiving — thinking outside the box could help add to potato sales in the produce section. “Those are the tried-and-true methods, but we’re starting to see consumers taking a bold approach to potatoes.”

“There are many more varieties being grown and marketed, which is fantastic. What it does is provide the consumer with choice. Obviously, choice leads to trial and more consumption…”

— Kendra Mills, Prince Edward Island Potato Board

Another opportunity comes with microwavable potatoes, which make it easy to include hot potatoes quickly during the summer without dealing with a boiling pot of water.

“One of the keys of the microwavable potatoes sub-segment is the summertime sales market,” says Schwartz. “When you’re after business in May, June and July, when it’s hot, being able to provide customers with a microwavable potato that kicks in 6 minutes opens up a whole new avenue for people to look at fresh potatoes as part of their summer entertaining.”

Johnson adds that Potatoes USA is investing in tools designed to help retailers understand the right assortment of potato offerings that will provide the best returns. “Right now, for retailers it is all about finding the right mix of products and varieties of potatoes,” he says.

Kendra Mills of the Prince Edward Island (PEI) Potato Board in Charlottetown, Prince Edward Island, Canada, says one important factor produce executives should be aware of is “greening,” which occurs when potatoes are exposed to too much light, affecting the appearance and taste. Eating greened potatoes can be unhealthy, and if a produce manager isn’t on top of greening, it can lead to customers not buying even the best potatoes from a particular store.

“There are consumers who don’t know what sunburn is,” says Mills. “And with the advent of 24-hour stores and lights being on all the time, that creates an even bigger problem. For potatoes that are loose or kept in see-through poly, it creates a challenge.”

All About Variety

A key selling point for potatoes is there are lots of options. Category Partners’ Barnes says Russets remain the top variety in volume, accounting for 66 percent of potato sales. But other varieties, including reds, golds and specialty are on the rise, capturing 29.3 percent of the overall volume.

“Variety has obviously been a mainstay of the potato industry for many, many years,” says Mills. “There are many more varieties being grown and marketed, which is fantastic. What it does is provide the consumer with choice. Obviously, choice leads to trial and more consumption and hopefully, buying new potatoes for new uses.”

Schwartz says yellow potatoes have been a spud star in recent years, capturing more and more market share in the United States, partly because they often are featured in recipes found online and on social media websites. “Yellow potato consumption in the United States has been on a steady upward climb since 2000 — it’s just been growing and growing,” says Schwartz. “White potatoes have been declining. We’re seeing fewer white potatoes in the marketplace, even in some of the traditional white potato strongholds, such as the upper Northeast, Texas and California. Red potatoes are amazing because they seem to be able to weather any storm in the potato industry; they’ve been steady in the market share for 10 years, with a slight uptick in the past decade.”

Always in Season

Potatoes, Carrots, and CauliflowerAnother selling point for potatoes is that they are a year-round vegetable. Spring and summer bring potato salad for barbecues and picnics; winter is the time for mashed potatoes, soups and stews; and baked potatoes and French fries are popular year-round.

“I think the benefit of potatoes is that they’re so versatile and fit into so many meals in so many different ways,” says Mills. “That’s one of the things we really focus on in reaching consumers through social media and other ways — providing different meal ideas and opportunities, and creating more of that versatility. There are so many ways to eat potatoes beyond the winter mashed potatoes and the summer potato salad.”

Another summer idea is grilling.

“Grilling potatoes is a subject that’s kind of been up and down over the years,” says Schwartz. “But based on the amount of recipe information and cooking techniques and the different variations, I think grilling potatoes is not going away; there are a lot of people who enjoy grilling potatoes and it’s a good part of the summertime.”

Cross-Marketing‬

Because potatoes partner so well with many foods, cross-marketing opportunities abound. There’s the classic “meat-and-potatoes” route, of course, but also consider dairy — milk for mashed potatoes and butter, cheese and sour cream for both toppings and as ingredients in potato-based side dishes. For potato salad, condiments such as mayonnaise and vinegar become good partners.

PEI Potato Board’s Mills says merchandising and cross-promoting are important, just as they are with any industry. “Creating cross-merchandising opportunities certainly helps to promote our industry. Also, providing recipes and meal ideas at retail, and creating a wide variety of offerings consumers can choose from also help.”

“Potatoes are the No. 1 item in the fresh sector with 88 out of 100 households purchasing them annually. The beautiful thing about potato purchasers is they always have a recipe in mind…”

— Ross Johnson, Potatoes USA

“There are lots of cross-merchandising opportunities with potatoes; executing them, however can be challenging,” says Barnes. “When there’s a protein on the dinner plate, potatoes are the No. 1 side dish, so cross-promoting with beef, pork, poultry or seafood is a natural. The potato is also the perfect palate for flavor, so spices, cheese and sour cream also make great partners. Getting them executed has been the stumbling block — but the potential is there.”

According to Potatoes USA’s Johnson, cross-marketing opportunities for potatoes are endless.

“Potatoes are the No. 1 item in the fresh sector with 88 out of 100 households purchasing them annually,” he says. “The beautiful thing about potato purchasers is they always have a recipe in mind and frequently shop across multiple categories in the store. In fact, on average, when a consumer purchases fresh potatoes, the size of the basket is $83.14, which is greater than tomatoes, packaged salad and onions.”

Jamie Quinno Bowen, marketing manager for the Idaho Potato Commission, headquartered in Eagle, ID, says Idaho potatoes have teamed up with Hormel for cross-marketing. “Idaho potatoes partners with Hormel Bacon Bits and Hormel Chili in the largest produce display contest in the industry,” says Bowen. “Opportunities exist with products that are used frequently with potatoes, such as those we work with.”

Classic and New Packaging

Gourmet Creamer PotatoesDetermining what sells best — certain size packages or bulk — depends on individual retailers and their consumer demographics.

“For stores catering to larger families, lower-income families or those on a fixed budget, the 10-pound bag still represents a good value,” says Category Partners’ Barnes. “Some chains specialize in organics, other chains — or stores within the chain — have a higher-income demographic, many who prefer the value-added or premium potatoes. That really becomes a supplier and retailer issue. It’s like so many other items in produce, — one shoe doesn’t fit all, and it’s got to be a tailored approach to maximize sales.”

According to Mills, popularity and package size varies from store to store. In membership-based warehouse stores, for example, most sales are of large-sized bulk packages while traditional retailers see a variety of offerings, from individual potatoes to large packages. “I think it depends on the outlet,” says Mills. “We are seeing a movement toward smaller pack sizes in general, but at the end of the day, it really does depend on the retailer.”

Convenience packages of potatoes have been a big help in potato sales.

“In Canada, we are seeing the advent of new, convenience types, which I think is really neat,” says Mills. “Small bags of microwavable steamers, oven trays — some of those unique convenience packs are coming onto the market here and having some growth; that’s good to see.” Mills adds that the consumer demographics for these convenience types include parents seeking healthy and delicious meals for their family and people who don’t have time to cook and those who don’t know how to cook. “Convenience is the driving factor for potato industry in Canada,” she says. “Potatoes aren’t like a banana, where you can throw it in your backpack as a snack; they’re supposed to be cooked. For people on busy schedules, having potatoes in a package that takes a lot of the prep work out is really important. And that kind of thing is driving our industry forward and taking us into some of the other convenience elements that have been in the grocery store for a long time.”

“For stores catering to larger families, lower-income families or those on a fixed budget, the 10-pound bag still represents a good value..”

— Tom Barnes, Category Partners

Bushwick’s Turner says that in busier, high-populated areas such as the Northeast, smaller packages are popular. “That’s because people are busy and are trying to do things as quickly as possible. Buying a large package of potatoes will result in a lot of waste because people aren’t cooking often enough to utilize them before they spoil. Not so long ago, a 10-pound bag of potatoes was just as common on the retail shelf as a 5-pound bag; you’d be hard-pressed to find a 10-pound bag of potatoes of almost any variety in a supermarket here on the East Coast,” he says.

Another challenge is the fact that potatoes need to be cooked.

“There’s no way around it, it has to be cooked,” says Turner. “So your convenience item that you may want to create, market and sell has to be done where you are still spending time microwaving it or cooking it in some fashion. There’s no getting around that.”

According to Barnes, value-add for potatoes requires several approaches. “Value-added packaging that can be microwaved, placed in an oven or grilled is certainly one approach. Some of these items and other types of packaging are also including a seasoning packet. Others consider the smaller C size (often referred to as creamers) as a value-add since they can be quickly prepared by roasting or broiling. Anything that provides a perceived value to the consumer either in preparation, flavor or time can be considered value-added.”

Creating Excitement

Perhaps the biggest challenge in promoting potatoes is how to generate excitement.

Potatoes USA’s Johnson says one of the best, if not simple ways, to improve sales is to remember to actually promote them. And Category Partners’ Barnes says one way to overcome the “everydayness” of potatoes is simply to put some effort into promoting them. “Potatoes play a major role in the produce department, volume, dollars and margins, but many refer to them as a staple or commodity,” he says. “We think a key factor in improving performance is not taking them for granted, and take them off automatic. Do cross-promote, do provide good signage, work the display as often as other displays.”

Idaho Potato Commission’s Bowen says it’s important to make sure the space allocation matches sales and margin. “Too many stores stock and allocate shelf space to slow-moving products, which takes away from the faster-selling items,” she says.

Potatoes can get overlooked in the produce department when they are competing against the bright colors of fruits and vegetables.

“When you go into a produce department today, you find an incredible variety of products and big splashes of color,” says Barnes. “At some level, potatoes have a harder time standing out. It goes back to merchandising — offering recipe ideas and possibly pictures of finished dishes has a lot more appetite appeal than a raw potato. Again, it gets back to treating potatoes differently than we did 10 years ago; we’ve got to do a better job of communicating in-store to the new consumer.”

“Provide usage and recipe ideas. Millennials don’t know a lot about cooking, so providing them with recipes or pictures of prepared products enhances overall sales..”

— Jamie Quinno Bowen, Idaho Potato Commission

Some chains offer in-store cooking kiosks with new recipe ideas, while others share recipes and ideas both in-store and on their websites. More ideas like these are needed to generate excitement over the potato.

The beautiful thing about potatoes is they appeal to all demographics,” says Johnson. But tailoring promotions to these demographics isn’t easy. “The industry is large and has so many participants that true marketing would be very difficult. But working with retailers to ensure the product offering is deep enough and broad enough to respond to the different demographics is key,” he says. “The retail industry is incredibly competitive, and it’s getting more so; keeping customers and growing traffic is critical, and having the products they want, including potatoes, plays a big role.”

Bowen says produce departments can increase sales to Millennials by giving them creative ideas as to how they can add potatoes to their meals. “Provide usage and recipe ideas,” she says. “Millennials don’t know a lot about cooking, so providing them with recipes or pictures of prepared products enhances overall sales.”

Tout the Benefits

To help generate excitement around potatoes, Barnes suggests showcasing new potato products, and offering preparation and recipe ideas beyond the usual baked and mashed potatoes. “Photos that show exciting potato side dishes are certainly going to help create excitement,” says Barnes. “Ensuring that the health benefits are available is also important.”

The low-carb movement led to a perception that potatoes are not a healthy food. But they are, and educating customers as to how potatoes can be part of a healthy diet can help improve sales. Potatoes are a source for vitamin C, potassium and vitamin B6. They are fat-, sodium- and cholesterol-free, and an average serving has 110 calories.

“There was a time when potatoes were seen as unhealthy, and those myths still exist, but I really get a sense that the tables are turning and people are seeing them as a healthy option,” says Mills. “They fit into so many diets — they’re vegan, they’re gluten-free, they’re vegetarian, and kids love them, so they cross a wide variety of diets.”

Schwartz says when it comes to nutrients potatoes are one of the healthiest foods around. “They get a bad rap because people choose to deep fry them and use other cooking methods that add unwanted calories,” he says, adding that cooking potatoes with healthy oils and fresh herbs and seasonings can enhance flavor without adding many calories.

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