In Canada, as in numerous other nations, demand for fresh potatoes has been slipping downwards for many years. Statistics Canada figures show that domestic consumption of fresh potatoes dropped from 42.7 kilograms per person in 1997 to 22.2 kilograms per person in 2011 — an unnerving 48 per cent decrease in just 14 years.
This, of course, has had a considerable impact on the industry, making the business of growing and selling potatoes less profitable than it once was, and spurring on efforts to find innovative ways to stimulate demand and turn around the sagging fortunes of the fresh potato market.
The Canadian Potato Council believes it has a plan to help do this.
Kendra Mills chairs a CPC marketing and promotion working group which met in Toronto in early April to map out a strategy for boosting fresh potato sales across the country.
“Declining consumption is an issue that affects everybody equally,” says Mills, who is also marketing director for the Prince Edward Island Potato Board. “This is every single growing region coming together, and trying to figure out a solution.”
Mills says Canada doesn’t have the benefit of a national marketing association like our neighbours to the south who have the United States Potato Board. “Their whole mandate is research and education in consumption, and we don’t have that.”
According to Mills, the CPC’s marketing strategy is consumer-based, and is currently being reviewed by industry partners across the country. “I think we have a very solidly built plan, and the momentum and the drive to want to change,” she says, adding that the plan could be ready to roll out by as soon as late summer.
Mills maintains it’s too early to discuss details but does indicate that a national voice for promoting the potato, and counterbalancing some of the negative health myths or media stories surrounding it, will be part of the plan. She acknowledges that securing project funding won’t be easy, “because these things aren’t cheap.”
Kevin MacIsaac, general manager of the United Potato Growers of Canada, also belongs to the CPC working group. He agrees that coming up with sufficient funds represents a huge challenge, since such a national marketing plan would likely cost millions.
“Anything to do with marketing involves a lot of money,” MacIsaac says. “Compare it to the dairy industry or … the avocado industry or some other fruit, vegetable or agricultural product that’s had a lot of marketing done, it’s extremely expensive. So that’s where we’re at right now — how much can we afford to spend to do promotion, and where will the funding come from?”
Members of the CPC working group are hoping all parties in the fresh potato supply chain will realize the long-term benefits and buy into the marketing initiative. They are planning to approach federal agricultural officials to lay out the plan in detail in an effort to secure their support.
Why is Demand Dropping?
The downturn in consumer demand for potatoes isn’t just happening in Canada, of course. According a recent report from USPB entitled State of the Potato Category — The “New Normal”, the downturn in fresh potato demand can be attributed to five key consumer trends:
- Health: Consumers are becoming increasingly interested in making healthier food choices, and while many know that fresh potatoes offer many nutritional benefits, they are often still dragged down by outdated beliefs. Health perceptions of potatoes are improving in the marketplace, likely making them a more “permissible” food to eat; however, they are not yet seen as a food that you should eat for health reasons.
- Mealtime Changes: One of the profound changes in consumer eating habits in recent years is that more of our meals are being eaten alone — the result of such factors as busy lifestyles and a growing number of single-person households. The USPB report says this in turn has caused potato sales to drop — while potatoes are included in 30 per cent of all dinner occasions (second in frequency only to poultry), “they are only half as likely to be consumed when eating a dinner alone.”
- Convenience: Another byproduct of our hectic lifestyles has been a collective quest for convenience, resulting in the rise of ready-to-eat foods such as yogurt and granola bars. As the USPB reports states, “of the 10 foods that grew most over the past 10 years, seven of them require no cooking or even assembly.”
- Cooking Skills: As a result of fewer stay-at-home parents in recent decades, fewer children have learned traditional cooking skills. According to the USPB report, this means that for younger generations, cooking is increasingly seen as a hobby rather than a responsibility, “although these consumers are still interested in acquiring cooking skills and exploring new foods.” Younger consumers are also increasingly going online to do this.
- Variety: The USPB report cites another food culture trend as the shift in tastes from processed, packaged and processed foods to fresh, less processed foods, led by in part by “younger consumers [who] crave variety and trying something new.” This is helping to drive interest in ethnic foods, some of which potatoes are not as strongly embedded in (for example, some Asian cuisines).
How will these trends continue to influence potato demand? According to the USPB report, “the increased interest and focus on health is a given, and mealtimes will continue to evolve, meaning more convenience, more variety, and more immediate consumption occasions. Plus, the competition for potatoes’ share of the dinner plate is only getting stronger, as innovation across food categories results in more options for consumers seeking convenience, variety and excitement.”
So what can potato producers and retailers do to respond to this consumption downtrend? The USPB stresses that the ‘new normal’ doesn’t necessarily imply sales opportunities for fresh potatoes are diminishing. “On the contrary, it just means that we need to be attentive to the shifts occurring in consumer/shopper behaviour and counter with savvy, insight-driven marketing and merchandising initiatives.”
Meaningful Innovation Needed
Darryl Rowe, president of McCain Foods Canada, agrees that marketing and meaningful innovation are integral to stimulating fresh potato demand.
“The industry must create new ways for consumers to enjoy potatoes. The starting place is better understanding consumer needs and responding with new products and new ways to enjoy the taste and nutritional benefits of all types of potatoes,” says Rowe.
“The importance of this shift is to ensure we are not relying entirely on processing to better respond to today’s consumers and customers. For me, processing is how we convert raw potatoes to a value-added food product that is in demand by both retail consumers who eat at home as well as foodservice operators and their patrons,” he adds.
“Shifting our mindset to marketing will ensure we are looking for consumer insights to better understand the barriers to increased potato consumption. With this type of focus, we have a higher likelihood of inventing new products, satisfying new eating occasions and utilizing new potato varieties that can help increase demand.”
To illustrate his point, Rowe draws on a carrot analogy: “Not so many years ago, carrots had to be washed, peeled and cut before serving, similar to potatoes today. And if you asked anyone to describe a carrot, they would say it is several inches long and pulled from the ground by its green leafy top. But if you ask kids today to describe a carrot they would likely say it’s about two or three inches long and sold in plastic bags at the grocery story. Baby carrots are now a staple for snacking, children’s lunches and side dishes,” says Rowe.
“By making their product more portable and eliminating preparation steps, carrot growers and marketers have likely had a significant influence on consumption. I think we can do the same thing for potatoes.”
Rowe believes that like carrot producers, potato producers and retailers need to find innovative ways to re-imagine and repackage their product. “McCain did just that when it started making frozen french fries more than 50 years ago,” he says. “We gave people the opportunity to enjoy a restaurant experience prepared in their own homes. We have to find ideas that are as big and sustainable as this category. I believe new and underutilized varieties, prepared and marketed to satisfy the needs of today’s consumers, will be key to the long-term health of the business.”
Rowe says a more recent example is how McCain, as a potato marketer striving to engage underutilized varieties in the marketplace, has helped create demand for sweet potatoes in North America. He also points to marketing efforts of the Prince Edward Island Potato Board, which “has effectively positioned and communicated to consumers the merits of P.E.I. potatoes. This is a great example of how a consumer-based approach has helped drive demand for P.E.I. potatoes. Others [in the industry] have the same opportunity.”
Understanding the Potato Consumer
Mills says Prince Edward Island’s marketing work — widely viewed as the gold standard for potato promotion in Canada — benefitted greatly from an in-depth market and branding study conducted two years ago in order to gain a better understand of today’s changing potato-purchasing consumer.
The online survey focused on six key objectives, including grocery shopping habits, purchasing behaviour, potato consumption at home, attitudes and lifestyle, branding and innovation and respondent demographics.
Results of the study, which was funded by the P.E.I. Potato Board, the P.E.I. ADAPT Council and Agriculture and Agri-Food Canada, have been distributed to industry partners. Mills says the board is also using the survey to guide its branding strategy and a communications platform based on this strategy.
“P.E.I. potatoes is an extremely strong brand,” she says, adding that the study added quantitative credence to what the board already understood in qualitative terms. “We learned just how strong our brand actually is.”
The survey polled consumers in eastern Canada and northeastern United States, shedding some light on the typical fresh potato purchaser. According to Mills, this typical consumer is a busy mom running in many different directions and making “a hundred decisions in her day.” Her life may be hectic but she remembers the family dinner table, and wants to provide that experience for her family when she can. She also has a repertoire of 10 to 20 dishes she prepares regularly on a rotating basis.
“If we can get potatoes into her repertoire one or two more times, or make it easier for her to try something new, or to make it a little less complicated … that’s what we strive to do,” says Mills, adding that one of the main marketing objectives is “understanding the consumer and speaking to her in the way that she wants to be spoken to. And being very genuine in that process.”
Growers as Sales Partners
Peter Chapman is the owner of GPS Business Solutions, a Halifax-based consulting firm that helps growers assess retail needs. He believes potato suppliers have a responsibility to work with retailers to address ways to boost consumer demand and stimulate sales of fresh potatoes.
“Part of what I say to producers is that your job is to help the retailer get that item into the shopping cart. I think too often, we say our job as a producer is to grow it and get it into a bag, and then that’s our role. As the market continues to evolve, [it’s clear] your role doesn’t end there — you have to help the retailer sell the product,” says Chapman.
“A retailer in a produce department can be managing 300 to 400 SKUs (stock keeping units), and whoever does the best job of helping that retailer get that item in the grocery cart is going to be rewarded with more opportunity — whether it is ads or shelf space or positioning in the store, that kind of thing,” he adds.
Chapman cites better product packaging and specific varietal marketing as some of tools at the grower’s disposal to help retailers better position fresh potatoes in their overall sales strategies. Another way to assist with merchandising is to offer consumers more choice. “When I talk to potato people, I always talk about the apple category. You know in a grocery store, we’ll list 15 to 18 different varieties of apples, but in potatoes, we go white, red and yellow,” says Chapman.
Growers also need to adapt to changes in the retail landscape and the shift in fresh food share from traditional supermarkets to discount stores and big box outlets. Chapman says discount and big box stores are more likely to seek larger packaging options and value offerings, while traditional stores may be looking for smaller potato sizes and/or bags, or niche offerings like fingerlings as way to differentiate themselves and avoid price comparisons.
While potato producers and retailers have more marketing options and strategies to consider these days, Chapman stresses there’s one thing growers and retailers should never forget: the importance of providing a quality product.
“One of the things which we can never lose sight of is the importance of putting great quality in the bag,” he says. “If [consumers] buy a bag of potatoes and they’re not satisfied with the quality of the product … there are other choices out there now and consumers are more open to those choices than they’ve ever been. So I think you have to respect that part of it.”
Tips for Promoting Fresh Potatoes
Continue to stress the nutritional benefits of potatoes to consumers. As stated in the United States Potato Board report, State of the Potato Category — The “New Normal”, “there is an ongoing opportunity to leverage potatoes’ equity as a ‘fresh and natural food’ and create a stronger link between ‘natural’ and ‘healthy’ in shoppers’ minds.” Some of the ways this nutritional/health messaging can be leveraged is through potato packaging as well as through in-store, print and digital product promotions and advertising. Grower associations and potato marketing groups can also help spread the word about the health benefits of potatoes through their websites, public outreach and innovative marketing campaigns.
The USPB urges potato suppliers and retailers to seek out innovation in the areas of convenience and variety to keep potatoes exciting and relevant. “This could take the form of exclusive potato varieties, limited-time offerings or special packages. The end goal here is to encourage an incremental purchase which leads to an incremental consumption occasion, while broadening a shopper’s ‘consideration set’ for potatoes in order to make a positive impact on future category purchases.”
The USPB also recommends taking advantage of emerging technologies to provide consumers with even more information and ideas for using fresh potatoes. For retailers, marketing boards and growers associations, this can mean leveraging websites and social media platforms “to serve up potato recipes and instructional videos, and then encourage deeper engagement with potato shoppers by sparking discussions and inviting participants to share their own preparation ideas.”