US potatoes see less use due to COVID-related foodservice losses, imports
With everything that occurred this past year, it is very important for us to understand what has happened to the sales of potatoes in the U.S. market and how the crop was utilized.
Based on an analysis of potatoes and products sold at retail and foodservice, and accounting for the volume of U.S. exports and imports, there was a 5% decline in the utilization of potatoes grown in the U.S. during the July 2019-June 2020 marketing year (MY20).
Despite the 9% increase in sales through retail, the decline occurred due to the 13% decrease in sales to the foodservice sector and 2% decrease in exports. In terms of utilization of the U.S. crop, the decline was further compounded by a 7% increase in imports. It is important to note that this decline occurred at the end of the marketing year. Sales to foodservice, retail and exports, were up for the July-December 2019 period.
Frozen continues to be the largest use of U.S. grown potatoes, accounting for 40%, with fresh at 25% and chips at 23%. During MY20, chips picked up two percentage points, one from frozen and one from fresh, while dehydrated remained at 8%.
For about the last 10 years, foodservice sales have been accounting for a greater and greater share of total potato sales in the U.S., peaking at 58% in marketing year 2019. This upward trend was reversed in MY20, with the foodservice share dropping to 53% of the total.
The spike in retail sales of potatoes this past spring was remarkable, with increased sales continuing. In fact, total potato sales from mid-March through Nov. 1 are up 20% over the same period in 2019.
For the marketing year, retail sales were up 8.7%, an increase of 1.3 million pounds. From a percentage perspective, frozen and dehydrated saw the largest growth, both with an increase of over 15%. Potato chips, the largest volume category at retail, increased by 5.5%, and fresh was up by 9.5% for the marketing year. Within fresh sales, russets increased by 10%, yellows increased by 13%, and whites increased by 16%. The only decline was for reds, which were down by 5% due to supply issues.
The disruption in foodservice sales was truly unprecedented but was also very uneven, impacting sales of fries at quick-service restaurants the least. The hardest hit was the Beyond Restaurant sector, made up of cafeterias, hotels, leisure activities and other institutions.
This carried over an uneven impact on the sales of potato types and products to foodservice for the marketing year ending in June. With limited-service restaurants being impacted the least, sales of frozen product were only down by 10%. However, since full-service restaurants suffered a much greater decline in sales, fresh sales to foodservice were down by 19%.
With so much uncertainty remaining in the marketplace and the timing and pace of recovery very much up in the air, Potatoes USA will continue to monitor and report out on the market in our weekly emails.
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