[deck]How the United States Potato Board is fuelling potato sales in international markets.[/deck]
The United States Potato Board was created in 1971, the result of a concerted effort by the American potato industry to spur consumer demand. Currently, the USPB represents more than 2,500 potato growers and handlers in the United States, and nearly 100 members from across the country serve on the board.
The initial focus of the organization was to overcome negative public perceptions about the food value of potatoes, while subsequent strategies expanded into international market-building activities and domestic marketing initiatives. More programs were developed throughout the next three decades,
focusing on such areas as nutrition education, food service outreach, retail merchandising and, later, retail category management. All of these programs were designed to stimulate flagging demand for U.S. potatoes and potato products, both at home and overseas.
A long-range plan developed by the board is based on insights acquired through extensive industry input as well as a comprehensive marketing and consumer research program. It focuses on activities with the greatest upside potential for increasing potato demand as well as advancing the industry domestically and internationally.
USPB’s domestic and international potato marketing programs include in broad terms: advertising, nutrition science, public relations, retail and food service marketing, and industry issues management. The following are a few highlights of the international marketing program.
International Table-Stock Potato Program
The goal of the USPB’s international table-stock program is to build awareness in foreign markets of the availability of U.S. table-stock potatoes and to respond to consumer research aimed at better understanding perceptions in targeted countries. The program focuses on increasing demand and usage of U.S. potatoes within the retail and food service sectors.
In some USPB target markets, potatoes are not generally perceived as being nutritious, so the international table-stock program aims to provide positive messages about the health benefits of potatoes. This is done through press releases, advertorials, cooking classes, television programs and promotional materials. More than two-million consumers in target markets have been reached through this positive messaging during the first phase of the USPB’s long-range plan (fiscal year 2012/13).
During the same time period, retail chains in a number in countries — 13 in Central America, four in Malaysia, three in Mexico and three in Vietnam — conducted promotions for U.S. potatoes; as a result, sales increased by more than 75 per cent. U.S. potatoes are being sold in about 700 retail outlet stores in these regions, and they also continue to be imported to the Asian target markets of Hong Kong, Taiwan, and Singapore.
International Frozen Program
The goal of the USPB’s international frozen program is to increase consumption of U.S. potatoes and potato products in export markets through the development and introduction of new products as well as developing new export channels. The program also works to protect and expand the American potato market share in existing markets.
This initiative is the largest in the USPB’s slate of international marketing programs, as frozen potato products account for roughly 60 per cent of total U.S. potato exports. This program focuses not only on french fries, but promotes all other frozen potato products available from the United States.
To create a positive potato profile in the international target markets, the program utilizes seminars and training workshops for trade representatives as well as consumer cooking classes and menu promotions. Media events, websites, press releases and newsletters are also employed to spread the message.
The program has been very successful during fiscal year 2012/13 with strong growth in export sales. Since 2002/2003, the volume of U.S. frozen potato exports has risen by more than 900,000 tonnes — an increase of more than 100 per cent over a 10-year period.
The development of new markets for U.S. frozen potato products creates new sales beyond the traditional food service sector. These new channels include prepared products at supermarket delis, bulk sales at supermarkets, minimarts at gas stations, pizza delivery chains, online shopping, wholesale public markets, kiosks and street vendors, and food manufacturing.
Other noteworthy successes of the program during fiscal year 2012/13 include:
- 20 restaurant chains in international target markets switched to U.S. frozen potato products from another source
- 18 new channels were developed for U.S. frozen potato products
- 42 new menu items were launched at food service chains in target markets
- 18 retail chains in target markets began carrying U.S. frozen potato products
The industry receives more than US$6 in the long run and more than US$5 in the short run for every dollar invested in USPB programming.
International Chip-Stock Program
While the potato chip industry has been growing in many areas around the world, especially in Asia, foreign chip manufacturers are often unfamiliar with the different varieties, year-round supply capabilities and high quality of U.S. chipping potatoes. Many believe that the necessity of using storage potatoes and longer shipping times associated with imported U.S. potatoes make them an inferior choice to using freshly harvested potatoes. There are also a number of countries that are either closed or present limited market access, such as Mexico, China, Thailand, Indonesia and Japan.
The goal of the USPB’s international chip-stock program then is to educate chip manufacturers in targeted foreign markets and build greater understanding of U.S. chip-stock varieties, their characteristics and the technical requirements for import.
Some successes of the program during fiscal year 2012/13 include:
- Eight out of nine chip manufacturers in target markets continue to purchase U.S. chipping potatoes
- Four new shippers were approved to export to Japan
- Market access barriers in South Korea, Taiwan, Costa Rica and the Dominican Republic were resolved, while significant progress was made on further improving access for chipping potatoes to Japan
- An international chip-stock symposium was held in Minneapolis, Minn., with five foreign buyers and four U.S. suppliers in attendance
- A reverse trade mission with five participants from Central America visited North Dakota last year to learn about U.S. chip-stock potatoes and meet with American grower/shippers.
The USPB continues to work with snack food manufacturers in Asia and Central America. Educational and promotional materials are provided as part of one-on-one meetings to determine their needs and interest in U.S. chipping potatoes. Samples are sent to those companies that had not previously tested them.
International Seed Marketing Program
The goal of the USPB’s international seed potato marketing program is to introduce the world to U.S. seed potatoes and to increase demand in targeted export markets. It does this by raising awareness about the availability, safety, quality and varieties of U.S. seed potatoes among government officials, importers and growers. Promotional activities have been undertaken in each of these four target markets: Nicaragua, Sri Lanka, Brazil and Egypt. The USPB also carries out maintenance programs in the established markets of Honduras, Uruguay, Panama and the Dominican Republic.
Notable successes of the program during fiscal year 2012/13 include:
• Two new importers began buying U.S. seed potatoes
• U.S. seed potato variety trials are underway in Egypt, Nicaragua, Mauritius and the Congo
• Cut seed trials are ongoing in the Dominican Republic, Nicaragua and Sri Lanka
• U.S. growers took part in market visits to Brazil, Sri Lanka and Mauritius
• Market access issues were resolved in Brazil, Uruguay, and Nicaragua while resolution efforts are continuing in Egypt and the Dominican Republic
The USPB clearly believes its marketing efforts are paying off. A recent press release from the board contains figures related to the cost-benefit ratio of marketing programming (both domestic and international) that show the industry receives more than US$6 in the long run and more than US$5 in the short run for every dollar invested in USPB programming.
As returns go, that’s a pretty solid investment.
For more information on the USPB’s international potato marketing efforts, visit uspotatoes.com.