Potatoes are staples of the produce department and usually find themselves among the top sellers each year.
And while these items don't typically need much help to leave the shelf, promoting them at the right time and using the right approach can give retailers a surprising boost to the bottom line.
Retail sales of yellow potatoes continue to grow while russets and reds are declining, though they still are the best-sellers by far, says John Toaspern, chief marketing officer for the Denver-based U.S. Potato Board.
"White potatoes also stabilized this past year and seem to be regaining some share," he says. "Purples and fingerlings are still a very small percentage, but demand is growing. And the fastest growing products at retail are the small potatoes, often as a medley of types. These are petites, babies, creamers, pearls, etc."
Ross Johnson, international marketing director at the Idaho Potato Commission, Eagle, Idaho, says it's no coincidence that more than 86% percent of U.S. households purchase potatoes.
Potatoes USA's fourth-quarter 2018-19 fiscal year report, using IRI sales data, says fresh potato retail sales from April-June were:
· russets — 592.1 million pounds, up 1.5% from Q4 2017-18 -- 63.7% of category volume sales
· reds — 151.6 million pounds, down 7.5%
· yellows — 100.7 million pounds, up 6.9%
· whites — 56.2 million pounds, up 15.5%
· medleys — 11 million pounds, up 24.5%
· fingerlings — 2.3 million pounds, down 0.2%
· purples/blues — 603,443 pounds, down 5.2%.
New-crop potatoes in Bancroft, Wisconsin-based RPE Inc.'s growing regions (Colorado, Idaho and Wisconsin) are looking good so far this season, says Rachel Atkinson-Leach, category manager for RPE.
"However, the weather has affected our timeline and we are a bit behind our typical schedule by about seven to 10 days," she adds. "We anticipate a similar market to that of last year and are hopeful that we will have enough growing degree-days for the crop to reach maturity."
Atkinson-Leach says according to IRI, total retail-store dollar sales for potatoes increased 1.4% and the price per pound increased 4.4% in the 52 weeks ending July 14, compared to last year, while total volume of potatoes sold decreased 1.4% for the same timeframe.
"The decline in volume was due to a 5% decrease in fresh russet potato volume sales, as well as a 5% decrease in red potato sales volume," she says.
Blend/medley potatoes saw the largest increase in dollar sales (13%) and volume sales (16%), Atkinson-Leach says. Yellow, white and fingerling potatoes grew in both dollars and volume.
"Blend/medleys are quickly becoming the favorite variety in our bite-size potato program," says Atkinson-Leach about RPE.
Bagged potatoes (1.5-pound, 5-pound and 8-pound) grew in dollar sales in the same timeframe, while 3-pound and 10-pound bags declined, she says. And bags and micro trays saw growth in dollars compared to a year ago.
"Three-pound bags are now becoming more of a commodity item rather than a specialty item," says Atkinson-Leach. "The sexy bag this year was a 1.5-pound mesh pillow pack or gusseted pouch. One-and-a-half-pound bags are showing growth of 20% compared to year ago."
Additionally, she says organic potato sales grew $13.4 million in 2018.
"Organic potatoes are still rocking growth of 5% this year and show no signs of taming down," Atkinson-Leach says. "All indications suggest organic acreage is level throughout the country; however, in some select areas, growers with established and developing programs are adding acreage."
Kevin Stanger, president of Wada Farms Marketing Group, Idaho Falls, Idaho, says its Idaho-grown potatoes also are a little behind schedule as an early frost knocked plants back a week to 10 days.
Test digs so far have shown nicely sized potatoes with good quality, he says, but acreage for all potato growers in Idaho appears to be down about 1% with a lower yield projected.
The growing season also was delayed in Wisconsin, says Mike Carter, CEO of Rosholt, Wisconsin-based Bushmans’ Inc.
"The growing season got off to a late start with snow in the spring, putting the crop behind; since then, the crop has made progress and has nearly caught up to where we would expect it to be," he says. "We've had timely rains and a good balance of heat for the plants. Overall, we are expecting an average crop with high quality. However, we still have more than two months left to go before the crop is under roof."
Bushmans’ is testing some new russet varieties, Carter says, while Norkotah and Gold Rush are still the standards.
"We are getting more and more experience with Silvertons, which also perform very well," he adds.
Potato Retail Tips
The market for yellow potatoes was very strong last year, as pricing and sales were strong, says Johnson of the Idaho Potato Commission.
"We have been working with retailers on understanding how to properly merchandise their departments to grow sales," he says. "The potato department is the largest volume driver in the vegetable category by more than double the volume of the next closest category (onions)."
This year, the Idaho Potato Commission ran a test with a large West Coast retailer to prove the effectiveness of secondary displays.
"In our test, we were able to see that test stores delivered a 22% increase in sales when compared to like stores," Johnson says. "Since potatoes are frequently located in the back of produce departments, an easy way to increase sales is by simply placing potatoes in a secondary location. Through various studies done by Nielsen and IRI, we know that basket sizes increase quite substantially when potatoes are purchased. Secondary displays really work!"
Bushmans’ customers are very focused on convenience items, says Carter.
"To that end, our Speedy Spud, which is a single, wrapped microwavable potato remains very popular," he says. "Our grill pack, which is four, foil-wrapped potatoes in a tray are also very popular during the summer months. We continue to see pack sizes get smaller and attention given to environmentally friendly packaging as well."
As for other promotions that seem to work well, Carter says larger displays of 10-pound bags of russet potatoes at $2.99 seem to lift the entire category.
"Reds, yellows and value-added potatoes all show growth during this type of promotion," he adds.
When it comes to cross-promotions, Stanger of Wada Farms says potatoes sell well alongside sour cream, butter and in the meat department.
"One retailer offered a meal solution with a rotisserie chicken, a Dole packaged salad and a Dole microwavable product from Wada Farms, so dinner could be ready in five minutes," he says.