Potato and Onion Consumers Looking for Convenience

There is a growing interest in specialty, value-added and organic options.

The potato and onion business is changing with the customer and the produce sector. The traditional core of bagged and bulk potatoes and onions continues to drive the categories, but varieties and specialty products are becoming a bigger deal in many markets and demographics.

At the Super Foodtown, Bronx, NY, bags of baby potatoes are prominent in the produce display. Convenience and ease of preparation drives more of this store’s produce business in general, and its fresh-cuts presentation is extensive.

Even though the store is in a middle-class community, Harry Celentano, managing partner, says consumers aren’t looking for the big bags of potatoes that drove the business years ago. Consumers purchase for convenience today, even in the potato category.

Marc Goldman, produce director, Morton Williams, also headquartered in the Bronx, but with stores throughout Manhattan, is among those who have seen the potato and onion business go from bags to small purchases out of bulk presentations.

“Years ago, it was a 5-pound of potatoes and bagged onions,” Goldman says. “Now, everybody comes in and buys loose — they’re only buying a couple of potatoes. The onions in the bags still do OK, but it’s a lot more loose.”

MARKET IS SHIFTING

“The potato and onion categories are going through some unique changes this year, especially with shifting market pressures,” says Tom Wopperer, senior category intelligence manager, RPE, Bancroft, WI. “In potatoes, we’re seeing deflation, thanks to a big russet crop, which has pushed retail dollar sales down about 7%, but pound volume is actually up by 4%, per Nielsen reporting.”

“The more traditional commodity and bulk potatoes still make up a majority of the category volume,” he adds, “but they aren’t driving much extra growth, outside of russets this year.”

Wopperer says specialty options, like bite-size, value-added or organic potatoes, are continuing to gain traction.

On the onion side, inflation from lower production is pushing dollar sales up by 11%, per Nielsen reporting. “These trends show onions are holding strong as a staple,” Wopperer says. “And, similarly to potatoes, we’re seeing a growing interest in specialty, value-added and organic options.”

He says stores “that maintain a solid selection of core commodity and bulk potatoes and onions, while also offering a variety of specialty, bite-size, value-added, and organic options, are the ones effectively attracting new shoppers and driving growth.”

Jessica Peri, retail sales manager of Peri & Sons Farms, Yerington, NV, says onion retailing tends to fall under two distinct approaches based on tonnage and margin.

Tonnage retailers tend to be heavy on price promotions to drive volume. Margin sellers may not move volume, but they may be addressing a customer who is more willing to spend money on specialty products. Peri says retailers have to identify where they want to be in the volume/margin dichotomy, then see how they drive volume using targeted marketing and merchandising.

Consumers are less list-oriented than they once were, she adds, and are most likely to assemble meals for the next several days as they shop, so it’s important to address that consumer approach to shopping.

Space and labor can make additional onion promotion tough, but stores can pick and choose how and when to get something manageable out in front of shoppers.

“It’s probably easier to do with bag onions than it would be with bulk,” says Peri. “Put some bags out there. Put something fresh out and keep it rotating. We’ve tried to freshen up our lineup, too, over the last couple of years. We’ve offered shallots, organic shallots in biodegradable boxes, cipollinis in the biodegradable degradable boxes. So even though they’re not high-volume items, it is an impulse buy because it’s a cute box.”

THE SWEET SEASON

The launch of Vidalia season can be an opportunity to bolster a potato and onion program, and draw more shoppers to the display.

“When we approach the transition from Peruvian to Vidalia sweet onions in April, we encourage our retailer partners to think about this shift as an opportunity to reinvigorate the sales of sweet onions, boost the overall onion category, and drive total produce department traffic,” says John Shuman, president and chief executive of Shuman Farms, Reidsville, GA.

“Vidalia onions have a strong brand identity and are recognized for their distinct, sweet flavor, which makes them a favorite among consumers nationwide.”

Shuman adds the return to domestic sweet onions is a chance to engage shoppers with the seasonality and quality that Vidalias represent. “By positioning Vidalia onions as a premium, seasonal favorite and educating customers on their flavor, versatility and story, retailers can maximize this transition period and see stronger results, not only in the sweet onion category, but across the entire produce department.”

Shuman recommends special promotions during the first few weeks of the Vidalia season to encourage trial and repeat purchases.

At the same time, retailers can drive sales in other categories.

“The good news is Vidalias sell themselves,” says Sloan Lott, director of sales, Bland Farms, Glennville, GA. “But it’s always a good idea for retailers to build displays in the produce department, as well as other areas of the store to cross-promote merchandising. For example, place a secondary display in the deli or in the meat department. The more visibility, the more chance of an impulse buy, and therefore higher sales.”

NO MORE ‘SAME OLD, SAME OLD’

Peri says seasonality and novelty can help retailers get consumers to consider purchases outside their normal buying habits. Sweets are one case, but white and red onions can also be the focus of promotions, as well as some simple merchandising and marketing efforts with tags or signage and a place on ad.

Seasonality and novelty can help retailers get consumers to consider purchases outside their normal
buying habits.

“If retailers would rotate what they’re promoting, they’re going to get people to buy different types of onions,” she says. “I think people just get into patterns. If their parents used a yellow onion, that’s what they’re going to use.”

Retailers need to remind themselves that their customer base is changing.

“Younger consumers often seek unique and specialty items that align with their values, such as sustainability and local sourcing,” says Alex Gumz, marketing specialist for Gumz Farms, Endeavor, WI. “By introducing specialty varieties of potatoes and onions — perhaps unique colors, flavors or preparation methods — stores can create excitement and cater to this demographic. Innovative packaging and marketing strategies that resonate with younger shoppers can further enhance their interest.”

“When it comes to merchandising, having a good mix of variety is key to drawing in incremental shoppers.”
— Tom Wopperer, RPE, Bancroft, WI

When it comes to merchandising, RPE’s Wopperer recommends having a mix of variety to draw incremental shoppers. “Displaying conventional and organic items together tends to work well, creating a display that attracts everyone from budget-conscious buyers to those who prioritize organic and specialty items.”

SUSTAINABILITY NOT A FAD

For some, the convenience of ready-to-cook or pre-prepped packaging is a big win, adds Wopperer, but a lot of shoppers are also increasingly drawn to more specialty mesh bags, compared to plastic options since it allows them to see the produce, check its freshness, and avoid extra plastic. “It really shows how people are trying to balance convenience with being more eco-friendly and transparent about the quality of their food.”

“We see the potato and onion sector evolving to meet the demands of a more environmentally aware consumer base,” says Gumz. “Sustainability has become a driving force in our farming practices, from reducing waste to optimizing water usage. While the core of our business — providing high-quality, fresh potatoes and onions — remains unchanged, there is an increasing emphasis on transparency, worker welfare, and the overall impact of our practices on the environment and community.”

Gumz says inflation has certainly been a challenge, but it has also reinforced their commitment to finding innovative ways to maintain affordability, while ensuring products uphold sustainability standards. The company grows its potatoes and onions by the Healthy Grown standard, which takes into account environment and best management practices.

Environmental concerns are also reflected in potato and onion packaging.

“Packaging has evolved significantly and plays a crucial role in our commitment to sustainability,” says Gumz. “While bulk presentations of potatoes and onions still hold their place, there is a noticeable shift toward packaged products that emphasize convenience, freshness and sustainability.”