A Fundamental Transformation?

Changes with the current recession

Published in the September 2009 Issue Published online: Sep 07, 2009 Tim O'Conner, USPB CEO
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HISTORICALLY, FRESH POTATOES have been countercyclical to recessionary economic periods, as consumers returned to foods that delivered value and comfort for their money. This current recession is different. Fresh potatoes have not seen their traditional up-tick, but rather have experienced the same volume declines and price increases that virtually all other food items have. Why is it different this time?

United States Potato Board research documents that consumer beliefs and behaviors have changed in ways that have altered fresh potato consumption. Those same consumer changes may signal more happening than a different recession performance; they may be the drivers of a fundamental transformation in the fresh potato industry.

In real-time, it is hard to tell the difference between a difficult business climate where a company or industry experiences an erosion in their competitive position, to when a change in the fundamental character of the industry is occurring. Knowing the difference between these two, and responding appropriately, is one of the most difficult business decisions, and among the most important.

SWING SHIFTS

Two shifts are responsible for long-term declining fresh potato consumption:

  • The primary cause is changing dinner preparation and eating habits that have simplified meals away from real cooking and increased the use of convenient alternatives.
  • The secondary cause is the shift in beliefs about food, health and weight, with more focus on health and weight reduction, with carbohydrates replacing fat as the "villain."

These shifts have been occurring well before the current recession and are at the confluence of larger changes in our society and culture, including more active lifestyles, the desire to experience different ethnic cuisines, rapid increase in one- and two-person households and easy availability of competitive products that deliver on consumers' desires for convenience and variety.

It is easy for the industry to see the short-term problem of the recession and its impact on declining volume. It is also easier for the fresh potato industry's business model to respond to this problem than to address the long-term issues of shifts in consumer behavior and beliefs with more convenient offerings and nutrition messages. It is important for the industry to respond to both issues, and particularly, to identify if these shifts are driving transformation of the industry. Continuing to grow and market a crop with a strategy based on responding only to the recession will leave fresh growers and shippers out of sync with the long-term issues that seem to be reshaping the industry for the future.

USPB consumer research is available to assist the industry in understanding and responding to these trends. Simply contact us to receive the details and begin a dialog about what you can do to respond: www.uspotatoes.com or 303-369-7783.

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