Six Ways To Make Potatoes Sizzle

Originally printed in the September 2019 issue of Produce Business.

Bold, smart promotion can bring new life to a venerable category.

U.S. consumers eat 10 billion pounds of fresh potatoes a year, yet it seems this leader in the produce department gets little or no respect.

Per capita consumption of fresh potatoes has steadily declined since 1970 from more than 60 pounds to less than 35, according to US Department of Agriculture statistics. Part of the slide can be explained by the steady rise in frozen potato products of various sorts, while potato chips have held steady at a little less than 20 pounds a year for each of us.

Because there has also been neglect of this potassium powerhouse that also packs a vitamin C punch, industry leaders have offered up six things to consider when merchandising potatoes as the peak season approaches.

“We do take seasonality into account, and while we carry the same variety year around, we open up display space on potatoes in the fall/winter based on customers’ wants and needs,” says Jeff Cady, director of produce and floral at Tops Friendly Markets, Williamsville, NY. “The reality is we sell more potatoes in the cooler months in the Northeast for a couple of reasons, but none is bigger than the need to cook indoors, coupled with the protein choice for the meals. Many more customers eat roasts, make stews and soups, and what better ingredient than the potato? All varieties pick up, but over the course of the past few years, the “bite-size,” smaller-pack size options have shown the most growth.”

1. Feature Secondary Displays
An additional display of potatoes, or even two, can increase sales more than most would guess.

“This year, the Idaho Potato Commission did a study by placing secondary display bins in select stores,” says Ross Johnson, international marketing director at the Idaho Potato Commission, Eagle, ID. “The sales were monitored and showed stores with secondary displays of Idaho Potatoes grew their sales by 22%. One of the issues potatoes continue to fight is placement within the produce category.

“Potatoes are the most popular item in the produce (vegetable) category with 87% of households purchasing them each year. However, the potato category is usually in the back of the store and not visible from the store entrance,” he says.

Potatoes USA also commissioned a study showing not only that secondary displays increase sales but also that the bump is even greater if you strut your spuds in the right place.

“This past year, we worked with Kantar Consulting to develop Merchandising Best Practices for the fresh potato category at retail,” says Kayla Dome, global marketing manager for retail at Potatoes USA, Denver. “We have recommendations regionally.”

While an end cap location within produce increases sales by more than two %, if that same end cap is next to the onions the sales bump is more than 4%. Put the main potato display across from the apples, and sales pick up nearly 5%.

Some retailers may be losing sales by locating secondary displays next to sweet potatoes, which reduces potato sales by 3.7%, corn, which causes a 9.6% decline, or broccoli, which Merchandising Best Practices estimates will cost you 5.5% of your potato sales.

Some shippers encourage these additional displays by offering a variety of high-graphic bins for the potatoes.

“Secondary displays drive impulse sales and basket ring,” says John Pope, vice president for sales and marketing at Mountain King Potato Co., Houston. “The center part of a Mountain King display starts with either Fresh Bin or a Grill Bin point of sale. These graphic pieces of merchandise are the focus point of extensive revenue potential.

“Our retailers utilize these point-of-sale materials with their brand merchandise and tie in with the thematic-focus points to drive sales. A grilling pit, charcoal, paper plates, utensils and other brand products are part of a cross-merchandise plan to drive incremental sales,” he says.

The variety of potatoes in the displays matters more in driving sales than does size.

“Assortment optimizes potato sales across channels, not display size,” advises Rachel Leach, category manager for RPE, Inc., Bancroft, WI. “While a larger display will generate a larger return, smaller format stores are still successful with smaller sets. The optimum display features a wide range of potato types and sizes.”

2. Pay Attention To Location
The location of the potato display has a profound impact on sales, according to Merchandising Best Practices.

If produce is to the front and right of the store, potatoes enjoy a nearly 9% increase in sales, and if the spud signage is visible from the store entrance, there is another 3% bonus. Raised bins improve sales on the order of 4%.

A standalone shelf for potatoes increases sales more than 5%, and location to the back left of the produce department also increases sales.

3. Know Your Demographics
This can affect everything from the mix of varieties you would do well to carry, and even the size packs.

“At Tops Markets, we have a broad range of demographics in just about every store, so we really do not change or eliminate varieties based on that, although we may eliminate a large bag of potatoes in favor of a 5-pound or smaller option,” says Cady.

Optimal pack sizes can vary from region to region, and store to store, especially if there are differences in household demographics.

“The proper mix will vary greatly on the demographics, region and salary base of the store location,” says Kevin Stanger, president of Wada Farms Marketing Group, Idaho Falls, ID.

Before deciding on the mix of pack sizes, it is worth the time to take a deep demographic dive that goes beyond household size and income.

“The sizes and packaging of potatoes are defined by the age, income, home ownership, employment status and location,” says Pope. “These types of classifications are used to help target the certain type of customer for that particular size and package potato. Seventy-seven percent of the fresh potato package units are now five pound bags and smaller.”

One result of demographic analysis should be an informed decision on whether a particular store should offer organic potatoes.

“Organic still matters,” says Leach. “Millennials spending on organic products grew 14% last year, according to Nielsen’s ‘Organic FMCG Product Purchase Behavior.’ Organic potato sales have doubled in the last five years to $123 million and now represent 4% of total U.S. category dollars. Russet, at 35%, red, at 28%, and yellow, at 27% drive organic category dollar share.”

Even stores with only a small demand for organics might do well to give them at least some space.

“Organics have become a larger footprint in the retailers produce section, and for most retailers and stores they need to have a place in the mix,” says Stanger. “Again, different locations may have a larger need than others.”

The market for organic potatoes, unlike the robust demand for salad products, remains relatively small.

“Organic potatoes matter for two % of the shoppers in a very niche segment,” says Mountain King’s Pope. “Supplies exceed demand.”

This is, again, a small number of consumers but they really care whether you have organic.

“Organic is not a huge category, but a lot of higher-end stores have organics,” says Jill Cox, vice president for sales at Sun-Glo of Idaho, Sugar City, ID.

4. Know Your Region
There are general rules when it comes to the mix of varieties and colors that make up an effective potato display, but there are also regional differences that really matter.

According to Merchandising Best Practices, a general rule is 45% shelf space for russets, 22% for yellow, 15% for white, and 18% for red potatoes.

That is the general rule, but there are regional SKU differences, and knowing what they are can increase sales from nearly five % to more than 10%, depending on the area of the country.

In California, for example, you want 8% each devoted to small-pack conventional and value-added, and 2% small-pack organic, while stores in the Great Lakes region do well with even higher percentages devoted to all three.

The best share for small-pack organic drops to just 1% in the Mid-South and Southeast, but the preferred display of small-pack, value-added is a whopping 17%.

Merchandising Best Practices found the optimal breakdown in the Northeast is 12% conventional-small pack, 16% value added and just 1% of small-pack organic.

The people from Idaho will tell you the key is the Russets, get them right, and the rest will fall into place.

“The Idaho Potato Commission is well positioned with multiple suppliers who can provide any variety of potato a retailer would like to stock their shelves with,” says Johnson. “However, in a recent study by Potatoes USA, it was proven that potato displays with a 45% space allocation to russet potatoes generate a 5.7% sales lift. This study specifically went into more than 100 retailers across the country and compared sales data to the layout of the potato category for each store.”

Others will answer the question about the best mix of colors and varieties with a definite maybe.

“Seventy-five percent should be yellows, reds, fingerlings and baby potatoes,” says Pope. “Twenty-five percent should be conventional russets and whites. The proper mix of varieties is limitless. The Laratte, Australian Crescent and Red Thumb fingerling varieties give the consumer a choice of a great potato to roast, boil or grill. The consumer is given these choices to distinguish what they acknowledge as a good tasting potato.”

There are even regional differences worth noting in the mix of potato varieties that sell best, and even in the size spud consumers crave.

“Stores display from a 50-count to a 70-count potato,” says Cox. “In Texas, it seems more like the 50-count; a 50-count is a very large potato. The size of the display depends on the market you’re in.”

Optimizing the mix of varieties and the location of the display correctly can increase potato sales.

There is even a sales reward for organizing the potato display with the smaller ones at the top.

“Top performing displays generate on average 1.4% lift just by organizing the shelf by potato type,” says Leach, category manager for RPE.

“Smaller sized potatoes sell best when merchandised on top of the display with larger sized potatoes on the bottom. The proper mix of varieties is white, yellow, russet and red potato in that order.”

5. Cross-Merchandising Opportunities
There are as many opportunities to cross-merchandise, as there are products or ingredients that go with potatoes.

“We try to cross-merchandise with items that go with potatoes, like bacon bits,” says Cox of Sun-Glo. “We have a cross-merchandising program with Hormel.”

Wada Farms also develops many promotional campaigns because of its marketing agreement as the exclusive provider of potatoes, sweet potatoes and onions sold under the Dole brand.

“We are cross-merchandising all the time,” says Stanger. “We’re working with butter companies (and doing) meat-and-potato cross promotions. Because of our relationship with Dole, we’ve done cross-marketing with Dole salads and Dole potatoes over the years.”

Some shippers offer displays that easily can be used to build a cross-merchandising promotion.

“The use of a retailer’s brand merchandise with a Mountain King grill bin is always a positive for both,” says Pope. “Packaged salads, dressings, seasonings, gravies and sauces are just a few examples that we have promoted in the past.”

Some grower-shipper organizations have developed relationships with many food industry producers who are available for cross-promotions.

“The Idaho Potato Commission has valuable partners, which helps drive excitement and sales,” says Johnson. “Potato Lovers Month, this past February, highlighted our partnership with Hormel. Additionally, throughout the year we are running promotions with Fresh Gourmet and Litehouse to help drive category interest and growth.”

6. Follow Value-Added Trends
As consumers look more and more for convenience, there is a steady stream of new value-added potato products.

“The value-added category has seen tremendous growth in recent years, but we have seen that retailers need to be cautious to not overwhelm the consumer with too many options in the value-added section,” says Johnson. “Consumers are enjoying the value-added options in the potato category and most Idaho shippers have a solution that will fit any retailers need.”

Steamable bags are moving well, according to Cox.

According to Pope, Mountain King is having success with sauce in a bag, Tuscan roaster kits and microwave packaged potatoes; hand-selected 4-count tray packs are successful value-added products.

“Absolutely, there are value-added possibilities,” says Stanger. “This is a great return for stores as the dollar per pound ring is higher and the value-added items meet the needs of those who are looking for quick and nutritious meals. The optimum display should guide the consumer to the full section of potatoes – value-added, varietal, russets and discount.”