[deck]Changing consumer demands is fundamentally shifting Canada’s potato industry.[/deck]
A graph of table potato consumption per capita in Canada over the past 20 years plainly illustrates a stark reality: the average Canadian today consumes just 22.2 kilograms of fresh potatoes per year, barely more than half the 42.7 kilograms an average Canadian consumed two decades ago.
The decline in per capita consumption is a serious and ongoing concern, and a priority for the potato industry to continue working to mitigate. That said, the combined effect of increasing yield per acre, higher pricing per pound and strong demand for processed potatoes means Canada’s potato industry is on far steadier ground than table potato consumption charts might suggest.
“It is a good time to be a potato producer. We certainly should be optimistic for the industry,” says Kevin MacIsaac, general manager of the United Potato Growers of Canada (UPGC).
Demand for processed potato products has remained relatively stable over the past two decades at just over 34 kilograms per year per capita. Since producers are growing bigger crops than ever – the average Canadian yield increased from 245 cwt (hundredweight)/acre in 1997 to 307 cwt/acre in 2016 – stable demand and strong pricing means producers are enjoying better returns per acre.
“The management level is higher than it used to be so we’re seeing much higher production per acre. Which means the economies of scale are higher than they were five or 10 years ago,” says MacIsaac.
But, he admits, the industry is playing catch-up on the fresh side due to sharply declining consumer demand.
“We can basically define the decline in consumption, but what we’re trying to do is figure out why it’s happening. We’re going back to doing consumer studies: talking to consumers in stores about why they are or are not buying a particular product. When we’ve got data, we can act on it.”
While demand for any food commodity does change over time, the speed at which per capita consumption of fresh product has declined over recent years is somewhat unique to potatoes.
Some of the factors influencing declining demand are obvious. Smaller family sizes mean fewer families buy products traditionally branded in bulk. A combination of immigration and social media-driven globalization mean potatoes must now compete with many other vegetable and starch options. And the increasing – though misguided – public perception that carbohydrates are “bad,” spurred on by low-carb diet fads such as the Atkins Diet, have taken a sizeable bite out of potato consumption as well.
The single biggest challenge to fresh potato consumption, however, is a result of changing Canadian demographics. The home-life realities of average Canadian families are very different than they were a generation or two ago. Skyrocketing costs of living and an increasing number of single-parent families mean fewer homes than ever have a dedicated stay-at-home parent. With parents juggling work and home, the desire for mealtime convenience is usurping home cooking, leading to fewer and fewer consumers knowing how to prepare potatoes.
“On the consumption side, we’ve lost a lot of cooking skills through generations,” says MacIsaac. “People used to be taught in schools how to cook food. Now, there are a lot of people who don’t know how to prepare our product. We need to start educating really early and bring them back to basics. They tried to put home economics classes back in schools in the U.S. That was a move that was likely stimulated or spearheaded by the produce industry and specifically the potato industry, and it is a really important move.”
One other factor challenging table potato sales is consumer perception. Put simply, fresh potatoes suffer an image problem. On the one hand, potato sales have always depended on consumers recognizing potatoes as an affordable option. On the other hand, affordability isn’t particularly sexy. As bulk sales decrease, potato marketers are being tasked with rebranding potatoes from reliable and stable to trendy and gourmet in order to sell smaller quantities at higher value.
“The potato sometimes gets viewed as the poor cousin. It’s difficult to get above that,” says MacIsaac. “Some nutrition studies and research that we’ve done as an industry following the Atkins’ [Diet] starch rejection helped improve our image a bit. But we are still viewed by consumers – and chains – as less valuable. The large grocery stores often use potatoes as a loss leader to attract people into the store. That sells a lot of product in the store, but it doesn’t help [the] potatoes image.”
Potato packers have responded to this challenge by producing a wide array of small, eye-catching packages, largely filled with nugget, fingerling and other appealing small products. In addition, demand for convenience-packed, value-added products like foil-wrapped baking potatoes and ready-to-microwave potato portions are gaining significant market traction.
“It used to be that people bought a 50-pound bag of potatoes. Recently, they bought a 10-pound bag. Now sales of 10-pound bags are declining, and five-pound bags are staying relatively flat. But the big increase is in the three-pound bags, because consumers want to have a smaller product in their home.”
That change has a direct impact back to the producer: since an eight to 10 ounce potato looks silly in a three-pound bag, growers today are changing their agronomic and management practices to select for small tubers.
Encouraging consumers to put fresh potatoes on their grocery lists depends on industry-wide effort. The entire value chain, from producer to packer to marketer, needs to ensure product offerings align with consumer preferences, packaging is innovative and eye-catching, and quality remains top-notch. As importantly, the industry as a whole needs to educate, educate, educate.
“Producers need to tell their story to the consuming public,” says MacIsaac. “One of the big successes is chain stores that feature actual producers in their product marketing. People can relate to who grew that product, they better understand how it got to where it is and they feel connected to the product. Not every producer is going to have his picture on a poster in the store, but when you go out for dinner with someone, you can still talk about the fact that you produce a good, safe product. Industry-wide, we probably don’t do enough of that.”