Value-added, fresh-cut diversify potato and onion industry

11/04/2011 10:40:00 AM
Ashley Bentley

Fresh-cut and value-added potatoes and onions are thought to be the future of the industry by some, but seem to be struggling in a weak economy.

Marketers of each look to lines of value-added products, as well as organics, to target a premium margin and offer something for consumers who crave convenience.

Fresh-cut is the name of the game for Oxnard, Calif.-based Gills Onions. Its entire product line of red and yellow onions is sold fresh-cut. The company counts on the convenience factor to sell its products.

“Consumers are busy moms trying to juggle a million different things, and we provide a quality product that they can use to assemble a healthy meal for their family,” said Nelia Alamo, director of sales and marketing. “We are constantly evaluating new packaging and technology in equipment to offer a wider variety of fresh-cut for all segments.”

The company introduced a 1-inch Asian cut this year for the foodservice industry.

“We have seen some of our guys here move to fresh-cut to take out some labor,” said Mike Gorczyca, procurement manager for Pro*Act, Monterey, Calif. “We have seen a slight trend toward that.”

Convenience packaging remains a growing category at retail, although some marketers say the sluggish economy has deterred some of the category’s target consumer.

Microwave-ready

Rexburg, Idaho-based Wilcox Fresh expanded its value-added line of microwaveable steamer potatoes across international borders this fall. The Potato Jazz line, which was introduced in the fall of 2010, has been rebranded as Zingers for the Canadian market.

The line includes three 16-ounce packs, a fingerling mix, a baby medley with red and white potatoes, and a fresh baby mix with C-size white potatoes.

Wilcox Fresh works with a copacker in Canada on the Zingers line.

Although the Potato Jazz line has done well in the U.S., value-added products in general have suffered throughout the recession, said Jim Richter, executive vice president of sales and marketing.

“The value-added market has been soft the last couple years because of the recession,” Richter said. “In a year when you had a lot of small potatoes and customers were really shopping month-to-month, they bought a 10-pound bag of potatoes over the value-added items.”

Potato Jazz and products like it have a very specific target market that includes dual-income households and time-crunched singles, Richter said.

“This year, with fewer small potatoes on the market, what you’ll see is value-added will have a stronger year,” Richter said. “Items like 70-count bakers and four-count tray packs will grow in popularity.”

Wrapped baker

Rosholt, Wis.-based Bushman’s Inc. offers a Speedy Spud, which is a triple-washed, shrink-wrapped baking potato. The company also tray packs baking potatoes, four to an overwrapped tray.

“Convenience is a priority for the customer, and we want to focus on that,” said Mike Carter, chief executive officer. “That’s the direction the category is heading.”

Potandon Produce also offers a line of Steamers with the Green Giant Fresh label.

“Several of our potato shippers and marketers, as well as other potato operations around the country, are introducing value-added products such as microwaveable potatoes

in smaller steamer bags,” said Tim Feit, director of promotion and consumer education for the Wisconsin Potato & Vegetable Growers Association, Antigo.

“This allows more convenience for consumers and better margins for shippers and retailers.”

Alsum Farms and Produce Inc., Friesland, Wis., markets Fast & Fresh, a microwaveable line of potatoes meant to appeal to the convenience-driven consumer.

Organics

The organic industry continues to see steady growth for sweet onions, said Marty Kamer, vice president of Greencastle, Ga.-based Keystone Fruit Marketing Inc.

Mountainside, N.J.-based Specialty Potato Alliance launched an organic line for retail this fall, which it premiered at the Produce Marketing Association’s Fresh Summit 2011 on Oct. 14-17 in Atlanta. The line includes three bagged products, each 1.5 pounds: yellow fingerlings, red fingerlings and a mixed bag.

“Our customers have asked us to increase our organics,” said Richard Leibowitz, managing director.

The organic category continues to grow for Pro*Act, particularly in the university and school foodservice segments, Gorczyca said.

“As a category we’ve seen some huge growth in that area, but growth from zero to just a few cases is a pretty big increase,” Gorczyca said.

Still, overall in the potato industry, organics remain a small piece of the pie.

“It hasn’t taken off in a huge way,” Muir said. “It’s a consumer demand trend.”

Feit said less than 2% of the potatoes grown in the state are done so organically.

“I’ve heard that the slow economy has slowed the growth of the organic segment,” Feit said. “Given the higher price for organic produce, people have to make tough decisions in order to stretch their budgets.”

Gills Onions also offers an organic line of fresh-cut onions for foodservice and retail, but it is a very small portion of what the company does overall, Alamo said.



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