January 2010
Idaho grower offers more value-added products

The continued national decline in potato consumption, in both the process and fresh markets, has growers, shippers and industry marketers searching for solutions to end the downward spiral.

From better packaging and point of sales displays to enticing recipes and just educating consumers on how to prepare potatoes to partnering with retail outlets to help promote sales by matching markets to consumers are examples of the efforts being explored by the Wada Farms Marketing Group LLC, in Idaho Falls, Idaho.

Bob Meek, chief executive officer, believes it is time for grower-shippers to become more involved in reaching consumers and educating them on how to prepare potatoes, even going so far as to have a professional chef create simple recipes to aid consumers unsure about how to use potatoes in their meals.

“Our retail marketing strategy in the next 12 to 15 months will be to come up with some displays and point of sale materials that will help the consumer visualize our products,” Meek said.

These days it’s not about selling 10-pound bags of potatoes so much as it is selling value-added products such as an “Easy-Baker,” an individually wrapped potato ready for the microwave or “Cream of the Crop,” a tray pack of three potatoes.

Both Meek and Kevin Stanger, senior vice president of sales, said the value-added products appeal to a consumer who doesn’t have the time to prepare a home-cooked meal but still desires a healthy meal with that home-cooked atmosphere.

“We have tried to do all we can to differentiate products and marketing ideas. To kind of bring the potato back to life to make it more user friendly with some of our prepackaged products, some of our ready to serve products,” Stanger said.

Yet they also see that overall consumption continues to drop and are continuing to search for ways to stem the decline.

“When you talk about the big picture though, how do we get more consumption in potatoes? That’s a tough ball game, because there are these small products that we are going through and hopefully that’s helping a little bit,” Stanger said. “The key is getting the retailers and other people to quit marketing potatoes as a bulk commodity.”

Stanger would like to see potatoes marketed and displayed similar to how stores market and display fresh fruits and vegetables, treated as a specialty and less as a bulk item in the back corner of the fruits and vegetables area.

“We have all these great fresh fruits and vegetables in our retail display, and then there’s potatoes that we pile in the back corner,” he said.

Part of Wada Farms’ efforts to bring potatoes out of the far reaches and into the bright lights of the vegetable displays has been through a new partner company called Category Partners. The joint venture between Wada Farms and Farm Fresh Direct is designed to offer suggestions to retailers with the best ways to merchandise category management of potatoes thereby maximizing their profits.

“It’s not an impression of ‘this is what we think you should do,’ this is our impression of what you should do,” Meek said. “But it’s ‘here’s the numbers, here’s what the numbers say should happen at retail. Would you like to consider our recommendation in helping you put that into play?'”

One of the first value-added products Wada Farms introduced was the Easy-Steamers line, a steamable bag concept. The product didn’t take off as they’d hoped.

“We missed the market,” Meek said. “We didn’t get it.”

So the line is being re-introduced as the “Microwave in Bag,” line, Meek said.

One other area they are looking at as a venue for expanding sales is tie-ins with other products. Because Wada has exclusive rights to the Dole label, the company does tie-ins with other Dole products, including one with a pantyhose manufacturer a few years ago, Stanger said.

Tie-ins are tough to put through these days, though, because no one wants to give up retail space in their departments. Meat suppliers are judged on their sales of meat, and produce only on produce. So cross-promotion in another area is more difficult, Stanger said.

Going into a new year, Meek said he was concerned about the current state of the economy and the sales numbers that retailers are seeing.

“We’re coming off a year where last year at this time the potato market throughout the summer and into the fall was extremely high, we had 20-year highs, so we put those potatoes through the retail chain they experience extreme dollars at retail and now we’re back this year with probably record low prices on potatoes and the retailers asking, ‘How can I make up the difference because I’m not even coming close to the sales dollars that I hit last year at retail,'” Meek said.

“There’s not a lot you can do to make up more than twice the difference at the dollar ring at cash register. It’s serious. If we can come out with promotions, if we can come out with tie-ins with other products, if we can come out with other things that help move potatoes then we have maximized our volume,” he said.

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