Potato sales robust in the retail sector during spring

Retail potato sales in the U.S. were up more than 30%, year-over-year, during the period of April 1 to May 17.

That followed a first quarter that saw a 15.5% jump in retail sales, according to data compiled by IRI for Potatoes USA. The situation reflects the ongoing COVID-19 foodservice shutdowns and restrictions, which went into effect in early to mid-March in most of the country.

For the marketing year, which is July 1, 2019 through June 30, 2020, retail volume is up 9.3%, year-over-year, and sales are up 10.4% to $11.417 billion. The average price per pound is up 1.0% to $1.69.

• Chips, which are up 6.8%, account for the largest market share of retail potato product sales at $5.491 billion.
• Fresh potato sales were up 13.5% to $2.894 billion, which is the second-largest category behind chips.
• Dehy potatoes have seen the largest increase in sales, up 22.0%, to $521 million. Dehy price-per-pound also had the largest increase at 5.9%.
• Canned potatoes (+18.2%) and frozen (+16.1) also saw large increases.
• The only category has decreased in the market this year is deli-prepared sides, which are down 4.7%.

Despite the robust retail sales due to COVID-19 stay-at-home mandates, it hasn’t been a rosy few months for the potato industry. Nearly 60% of U.S.-grown potatoes go to the foodservice market. Decreased demand in that sector has left a surplus of processing-bound potatoes in storage and backed up the supply chain. It’s also led to a reduction in processing contracts for growers for the 2020 season.

Fresh retail report

As noted, fresh potato sales in the retail sector are up 13.5% in dollars to nearly $2.9 billion and were up 9.0% in overall volume to 3.884 million pounds.

• Five-pound bags accounted for the largest market share, 47% of all sales, or $1.164 billion. Next was 10-pound bags (21% market share), bulk (13%) and then bags of 4 pounds or less (10%).
• Bags of larger than 10 pounds saw the greatest increase in dollar sales (+26.5%), although still only accounted for 4% of the market. Large bags also saw a price-per-pound decrease of 1.4% and was the only category to fetch a lower price.
• Bagged and bulk potatoes account for 98% of fresh sales. There are a few niche categories, however. Tray potatoes saw a jump of 37.1% in volume and 23.5% in dollars to $39.897 million, although still are just 0.5% of the overall fresh market.

Organic potatoes, which have slowly been accounting for more of fresh retail market in recent years, did see a rise of 6.6% in dollar sales to $106.782 million, but accounted for just 2.0% of the market. Organic price-per-pound was $1.49, more than double of conventionally grown, which was $0.73 per pound.