Low demand, tough economy daunt potato industry

01/07/2010 03:02:22 PM
Doug Ohlemeier

ORLANDO, Fla. — Dogged by fewer shoppers buying fresh potatoes, the industry is seeking options to reverse the unfavorable trend.

At Potato Expo 2010, Tim O’Connor, president and chief executive officer of U.S. Potato Board, Denver, discussed results of the organization’s consumer research, which shows why fresh potato consumption has been declining.

Doug Ohlemeier

Dean Gibson (from left), comptroller of Magic Valley Produce Inc., Paul, Idaho, talks with Kevin Searle, general manager of GPOD, Shelley. Idaho, and Travis Blacker, president of the Idaho Grower Shippers Association, Shelley, during Potato Expo 2010 in Orlando, Fla.

While total per-capita yearly potato eatings at home have been falling, the trend has recently leveled and potatoes maintain an excellent household penetration, O’Connor said. 

He said 79% of consumers eat potatoes at home once every two weeks, a high number compared to other food products — but their role in family meals has changed.

“The largest single difference in traditional dinners during the last 12 years has been the elimination of fresh potatoes,” O’Connor said. “Meals are a lot simpler (today). While non-fresh potatoes have seen some growth, clearly an indicator of opportunity, we have seen some of our share going to rice and pasta because they are more convenient. The greatest single reason for that decline is the simplification of dinners because we represent more work and time.”

In a fresh sector breakout session, food brands marketer Jim Zimmerman, president of the Zimmerman Group, Excelsior, Minn., recommended potato marketers try to expand the way consumers use potatoes and how they think about them.

“Try to get people in the future to menu potatoes differently,” he said. “If they’ve always thought of them a side dish, that’s a problem. We need to get them to think of them differently and to expand them into breakfast and lunch dayparts. We want those people to start to think why they’re not serving potatoes more often at home for breakfast or at lunch, or how come they’re not eating them at work when they make their own lunches.”

Harry Balzer, senior vice president and chief industry analyst with the NPD Group, Rosemont, Ill., said meals prepared at home have been rising since 2000.

“They (consumers) have been coming back to their homes,” he said. “This is a long-term structural change we have to figure out how to deal with, which means we are not buying meals at restaurants. The peak year (for dining out) was 2001. This has been a horrible decade for the foodservice industry. We have been accustomed to people buying more meals at restaurants.”

Discussing retailing produce in challenging economic times, Paul Kennedy, the recently retired group president for perishables for Jacksonville-based Winn-Dixie Stores Inc., said potatoes have seen a 27% deflation in their prices at retail along with 22.5% deflation for onions and 16.8% for broccoli.

“If you’re dealing with a lot of deflated categories, things don’t go so well at retail,” he said. “The issue isn’t just that produce is deflated, but all categories in the supermarket are deflated. Produce is having a hard time getting to the positive area.”

Bill Whitacre, president and chief executive officer of the potato processing giant J.R. Simplot Co., Boise, Idaho, said the potato industry needs to embrace technology to enhance the relevance of the potato in a technologically-driven world.

“Technology is moving quickly,” he said. “It’s about how you anticipate things. Our business has significantly become more complex than 5, 10, 15, 20 years ago. This is not your father’s or grandfathers’ potato industry any longer. It has changed. It has become global, and more volatile and more complex.”

About 1,200 participants attended the Jan. 4-6 expo, up from the 900 in 2009.



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