BERRIES' LESSON FOR POTATOES

Published online: May 17, 2010
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From the USPB:

Comparing potatoes to berries may seem no more useful than comparing, well, apples and oranges. Berries are a higher-priced impulse category in the produce department, while potatoes are a staple commodity and department cornerstone.

That said, there are lessons to be learned from berries, which have seen 22 percent dollar velocity growth over the last five years, despite a 2009 that was rough for all of produce. Strawberry growers have noted that new and tastier varieties, like the Albion strawberry, have helped convince consumers to buy larger 2-and 4-pound packs that used to sell mainly at club or alternative format stores.

This is of note, as moving these larger pack sizes has helped boost berry volume and dollars without sacrificing one for the other as a change in pricing practice might. While promotions of 10-pound russets have driven potato volume recently, this is not a sustainable practice. A lot of the newer or lesser-known potato varieties that come with higher price points are best suited for small pack sizes of 2-pounds or less, but there are two newer varieties that have yet to realize their full potential and can be packaged in larger sizes: red skin-yellow flesh and russet skin-yellow flesh varieties.

9In looking at the mainstream subcategory, which comprises packages of 4 to 6-pounds, these two varietals exhibited the strongest dollar and volume growth for the 52 weeks ending 2/20/2010. While dollars declined 12.8 percent and volume decreased 2.8 percent across the subcategory, the story was far brighter for the red skin-yellow flesh and russet skin-yellow flesh varieties. Red skin-yellow flesh saw gains of 9.2 percent in dollars and 14.4 percent in volume, while russet skin-yellow flesh exhibited increases of 75.8 percent and 75.3 percent in dollars and volume respectively.

Part of the recent dynamic growth of red skin-yellow flesh and russet skin-yellow flesh can be explained by the small base they were growing from, combining to account for only 1 percent of the mainstream subcategory. Indeed, no single red skin-yellow flesh item saw distribution greater than 9.0 percent, or sales higher than $2.7 million, while those values maxed out for any russet skin-yellow flesh items at 7 percent and $3.6 million. As newer varieties, this is to be expected. The fact they've shown signs of growth is promising, especially as their 5-pound packs are competing for the largest slice of the contribution pie in the mainstream subcategory which comprises the majority of total potato category dollars and volume.

Many grower-shippers see the value of these varieties growing greatly in the future. In an article from
The Packer titled, "Varietals continue to see increases in potato category," one national grower noted that overall potato volume may be declining, but the overall value of the crop is staying steady as more expensive varietals continue to contribute a larger portion to the overall category. As the new varietals expand, the value of the crop should actually increase, even if volume declines. Their unique taste should help with their growth, with the grower noting, "They're like candy. They're very, very, very good." With continued expansion, retail support via POS signage (
which you can find here), and regular inclusion in promotional calendars, these two new varieties are poised to help drive mainstream potato sales.

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