Tim O’Connor, United States Potato Board

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Potatoes as Power
U.K.-based Branston Potatoes is building a new plant to power its potato processing facility that uses rejects as fuel. Spuds that would normally be trucked away from the facility to be used as animal feed will instead be burned in Branston’s heat and power plant to create about 35 percent of the processing facility’s electricity needs.

Branston, the largest supplier to Tesco retail stores in the U.K. and Europe, has been working to reduce its carbon footprint and is the only food producer in the country to be approved by the Carbon Trust. Not only will the power plant reduce energy needed from the power grid, it will also reduce the number of trucks on the road that had been transporting waste to feed lots.

This is a good example of a company addressing the needs of its customers and the concerns of consumers. A product’s carbon footprint can sway a consumer’s opinion, and food miles and carbon footprint measures are printed on a product’s label in the United Kingdom and Europe.

Although it’s less of a concern to U.S. shoppers, the beneficial measures growers and processors take can build goodwill with consumers. Although many in the industry believe being a good farmer is sustainable, the end user may not know that. And, as most growers already know, sustainability can have a positive impact on the bottom line by decreasing input costs, even if sales don’t directly increase.
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Tim O’Connor
United States Potato Board
 
How is the potato board working to increase demand of potato products at retail?

At the core, one of the issues that we have to address is convenience. Look at the salad industry: Innovation came in the form of a packaged salad. That brought a lot more meal occasions for the lettuce industry. It increased demand and it increased demand permanently. It was a fundamental change. Someone with a background in economics would tell you it’s a shifting of the demand curve.

In 2007, 65 percent of meals were quick and easy, and potatoes were only included 11 percent of the time. The rest of the meals were traditionally prepared, and they included potatoes 37 percent of the time.

Even the economy hasn’t changed consumers’ desire for convenience, but they’re changing what products they buy. Frozen pot pie sales have been up because people have been opting for cheaper meals instead of buying the bigger frozen meals.

The United States Potato Board needs to address these long-term issues, not just bump sales for the short term. Offering discounts is a great way to empty out storage bins, but when you’re finished, you turn around and it’s full again. So, we need to work on increasing demand in the long term.

To do that, we have to develop cooking techniques and new products that reposition potatoes to fit in quick and easy meals. Either that or we have to grow a lot fewer potatoes.

Are there any successful convenience potato products on the market or coming out soon?

I think there are a number of success stories out there. We brought over innovative packaging from the United Kingdom in 2005 – the microwaveable steaming bags – and companies like Wada Farms and Dole and others have successfully marketed them. The mashed potato market is mature, but the products were successful – the Country Crock mashed potatoes were a hit.

There’s a new product in development right now that is a mashed potato bowl with all the ingredients. It’s like a macaroni and cheese product, where everything you need is in the package and you just add water and put it in the microwave. The mashed potato bowl has fresh potatoes in a microwaveable bowl, and the consumer just puts it in the microwave for 10 minutes, then mixes the ingredients and mashes it right in the bowl when it’s done.

Does the potato board see itself as a product development organization?

We see ourselves a little bit differently than other commodity groups. We want to be the venture capital group for the industry, where we give money and support to develop products and let companies run with it. We want to unlock great ideas and innovations that will benefit the industry. TEXT

 

Market Report
The downturn in the global economy is eroding demand for agricultural products in some important export markets. While consumer spending on food and agricultural products is expected to stay steady in the United States and Europe for 2009, the rising value of the U.S. dollar and decreases in national gross domestic products could adversely affect fresh and processed potato exports, according to USDA’s Economic Research Service (ERS).

The 2009 forecast for horticultural products is expected to be $21.5 billion, an increase of $700 million from 2008. That’s mostly the result of higher prices, because sales volume is expected to be flat. A growth rate of 3 percent is the lowest in the last seven years “by a large margin,” according to ERS. The markets most affected by the downturn in the economy will be exports to Canada, Japan and Korea – but those losses should be offset by increased exports to Mexico, China and Taiwan.

The export forecast for fresh fruits and vegetables is expected to be down $300 million from November’s forecast – to $5.7 billion. The processed fruits and vegetables export forecast was increased $100 million, to $3.6 billion.

Despite the downturn in the U.S. economy, ERS is forecasting an increase of 4 percent in U.S. imports in 2009, for a total import value of $82.5 billion – an increase of $3.2 billion from 2008. Import values have increased by 12 percent on average since 2003, but ERS is anticipating a growth of only 4 percent in 2009. Prices for imported goods are expected to decline in 2009 as a result of the decrease in global demand, according to ERS.

 

Shearer’s Kettle Cooked Potato Chips
PICTURE Shearer’s Foods Inc., Brewster, Ohio, has redesigned the packaging for its line of kettle cooked potato chips and expanded the offerings with two new flavors.

The company’s kettle cooked line of potato chips already has 10 flavors: Original, Reduced Fat, Salt & Pepper, Select, Jalapeno, Salt & Vinegar, Buffalo Wing Bleu Cheese, Mesquite, Unsalted and Sweet Wasabi Mustard. Added to that line are Sweet Barbecue and Hot Pepper Trio. Sweet Barbecue offers “indulgent notes of brown sugar and molasses on top of a tangy tomato base with a slightly smoky overtone to deliver a great all-American flavor,” and Hot Pepper Trio is “a medley of spicy heat and rich pepper flavor,” according to the company.

The new package design features brighter colors and full-color, large photographs of the potato chips. The bags were designed to be more appealing to consumers by featuring the quality product inside, according to the company.