What makes the Little Potato Company concept work and, more importantly, what can the rest of the potato industry take from their success? Spud Smart sat down with CEO Angela Santiago, to find out.
In a primarily commodity crop like potatoes, it’s hard to differentiate yourself as a grower. That is, unless you come up with a niche marketing opportunity that works, as a small number of growers have successfully achieved. Arguably the “biggest little” success story in spud specialty marketing is the Little Potato Company (LPC), a Canadian start-up that has grown from niche to household name in recent years.
Finding One’s Start
“Do you remember the little potatoes?”
Jacob van der Schaaf was in a coffee shop in Edmonton when he overheard that question, asked in Frisian, the rare language he’d grown up speaking that is native to a small region in the Netherlands.
In fact, he did remember the little potatoes. Growing up in the Netherlands, a good Dutch meal always included potatoes. In his and many other rural Dutch families’ cases, the potatoes considered most special were the little ones: he remembered going into a field after it was harvested and picking the little potatoes right off the field to bring home. The little potatoes were always a favourite part of the meal.
“My dad came home from the coffee shop that day and said, ‘I’ve got a business idea!’,” said Angela Santiago, CEO of The Little Potato Company. “Like the typical 20-something I rolled my eyes and thought, ‘Good grief, potatoes? For real? No thank you!’”
Neither van der Schaaf nor Santiago had any agricultural background, but Santiago was swayed by the family entrepreneurial spirit and dove in.
“I said, ‘Look. I’ll help you get it started. But then I’m going to go off and do something else.’,” she says.
She never left.
Van der Schaaf and Santiago founded the Little Potato Company in 1996. It remains family owned and operated today. Their proprietary little potatoes are grown on family farms, don’t need peeling, are prewashed and quick to cook. They’re now sold in over 20,000 retailers across Canada and the United States.
What’s the take-away for other would-be entrepreneurs? You can build a strong foundation with commitment to a product you love and an operating model you believe in. Of course, even those benefits can’t shield a new business from the challenges of start-up, as LPC discovered.
Navigating Bumps in the Road
The early years posed significant hurdles for LPC to overcome. First, they had to learn how to grow small potatoes. In quick order, they faced challenges like crop failures, quality issues, and not having a year-round supply. On top of that were hard financial lessons, lessons in building the category and scaling the business.
And of course they had to get their product to consumers.
“We were introducing a category to retailers,” said Santiago. “Sometimes this was met with complete enthusiasm, and sometimes it was met with disbelief.”
Everyone knew what a potato was, but the potato category in general had been on a slow decline for decades.
“A lot of consumers moved away from the potato category and went to other things like rice, pasta and things that just ended up being more convenient,” Santiago explains.
“So [we had to] gain attention and get people to come back to potatoes and do it in a form that’s more convenient and on trend with what they’re looking for.”
When LPC succeeded with this, a new challenge emerged. The company grew very fast. While that might sound good, it has risks.
“There is such a thing as growing too fast,” said Santiago. “If you don’t have the right people yet, and the right resources, you can run out of cash. I’ve sat on the edge of a business cliff more than once thinking ‘we might not make it through this one.’”
Despite the lure of high revenue, Santiago says pacing is important. LPC learned to treat business as a journey, not a race.
Key to weathering the early years, Santiago says, was seeking out expert help.
“I’ve been fortunate to have worked with some amazing, experienced people who chose to work with us at the very beginning,” said Santiago. “I figured out early that someone I couldn’t afford full time, I could afford fractionally, and in the very early stages I built my business around that. It’s been an amazing part of how we’ve grown – the intersection of finding people at the right time to grow the business.”
Leading Lady
On a personal level, Santiago found being a woman was helpful in overcoming those early challenges and growing the business.
“I worked well being discounted,” she says. “I think maybe that’s also the experience of being a woman. Out of the gate [the Little Potato Company was] kind of discounted, so weirdly, I was comfortable there. For the first 15 years, we flew under the radar — ‘Don’t worry about them, they’re not going to make it’. It allowed us a lot of flexibility in trying to get to the market and getting the attention of retailers.”
Finding and trusting her leadership style was a journey as well.
“I think women often lead from a place of vulnerability or authenticity because we don’t know how else to be. In the beginning, I thought maybe I’m not a good leader because of that. But I learned over the years that’s what made me really good. I also had the ability to say, ‘I don’t know’ and ‘I need your help’.”
Santiago says modeling this allowed others around her to feel comfortable doing the same. While every leader needs to develop their own leadership style, a key takeaway for any leader is the power of authenticity.
Meeting Customers’ Needs
The Little Potato Company’s business model focuses on customers’ needs above all. While that might sound like an obvious priority for any company, LPC actively shapes decisions around its customers.
First, from the beginning, LPC prioritized what the consumer wants, rather than saying ‘this is what we’re growing, please buy it’.
“They were looking for the combo of convenience and health,” Santiago explains. “We built the product that we knew a consumer was heading towards.”
The smaller-sized potato concept also fit with shifts to smaller families and an increasing population of empty nesters who were cooking for two again.
Second, LPC strove to offer a consistent product available year-round. Consumers can go to stores across North America and find the same variety in the same convenient packages, which is key to build consumer confidence and loyalty.
Third, they focused on variety development.
“Early on, we realized, a lot of the (existing) varieties didn’t have enough tubers per plant,” Santiago says. “Economically and agronomically, we were never going to get a lot of yield from the old potato varieties, so we started to breed our own.”
The Little Potato Company now has breeding programs in Canada, Chile and the Netherlands, which together make up the largest little potato breeding program in the world.
“They taste better, are disease resistant, and our growers now can grow more little potatoes per acre than we could 20 years ago,” Santiago says.
This gives a much more sustainable picture overall for the company.
Investing in Relationships
LPC may sell potatoes, but — like almost any business — their success or failure depends on relationships.
Top of that list is investing in growers, Santiago says.
“It’s important to us to have a good relationship with our growers because they’re the ones producing the food,” Santiago says. “When we need more potatoes, we go to our existing family farms to ask if they can grow more, and if not, can they recommend another family in the area.”
Retailers — the conduit that allows LPC’s product to get to consumers – are a top priority too.
“How [our retailers] put themselves in the market is important to us. Having a strong relationship with them is a win–win–win,” said Santiago. “A win for us, for the retailer, and for the consumer.”
Certainly not least on the list is the LPC team. The Little Potato Company opened a new packaging facility in Nisku, Alberta this spring. LPC built this because it was running out of operating space and, Santiago says, because it aligned with the company’s core values and commitment to its people.
“It’s a better work environment for employees,” said Santiago. “We automated things that were either tedious or not a great job to have. We have a water recycling system, we have solar panels on the roof, and it’s a lovely place to work.”
What’s Next?
Keeping a clear vision of the future is a key to success in any business. For LPC, the future is all about reaching more customers.
“There are millions of consumers who have never tried our product,” Santiago says. “We’ve just got to continue to produce what we already do well. The exciting piece is how we communicate that, and how we position ourselves with marketing.”
Like every company, LPC grapples with how to manage tight margins, changing market demands, and increasing social pressures. Success in today’s marketplace means being willing to adapt operating strategy and product offerings. For LPC, that means considering how to best use potatoes that don’t make the bag due to aesthetics or blemishes.
“That will be a big focus for the company in the next year or two,” said Santiago. “We’re really looking at what kind of products can we (produce) that will bring value add to what is now going in the garbage.”
Premade products are the ideal solution for using off-grade potatoes. One precooked, seasoned product is already being offered to foodservice and it’s gaining traction, so LPC is looking at possibly entering retail with that product. The company is also looking at other pre-made opportunities.
The real story of the new Nisku facility runs deeper than statistics like square footage and dollars spent on capital, says Santiago. It’s a story of growth, which is good news well beyond the LPC’s doors.
“It means that our family farms can grow more of these little potatoes, and we can offer more product for consumers. It’s also a celebration of agriculture in Alberta. We’ve always grown potatoes in Alberta, but most industries have been overshadowed by oil and gas. I think it’s a good news story, and a signal to not just Alberta, but all of Canada, that a Canadian company can be in the agribusiness, do value added (processing), and export to the U.S. I think it’s a signal of hope to a lot of Canadian companies in industries that probably don’t get a lot of spotlight.”
Final Advice
The Little Potato Company is a success story driven by perseverance… but it all started with a random conversation overheard in a coffee shop.
“That’s how I think innovative things happen,” said Santiago. “It’s often by accident — by chance — and then you take that opportunity and you run with it.”