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IPC focuses on value of product at retail in tight economy

by Rand Green | April 21, 2009
"With the ever-declining economy" and the financial struggles that many consumers are experiencing due to unemployment or other factors, the Idaho Potato Commission in Eagle, ID, is putting a strong focus on the value potatoes offer consumers in the retail produce department, according to Seth Pemsler, the commission's vice president of retail.

"What we are trying to do is work with retailers to better help them meet the new customers' needs, which is a focus on value," Mr. Pemsler said. When consumers go into retail stores, they are now "searching for values" and looking for ways to stretch their dollars more than they did in the past. "We are trying to help retailers recognize that potatoes are a great way to do that. They really are inexpensive compared to most of the other things in the produce section."

The commission has just produced new point-of-sale materials "based on the value of a potato" and "the fact that an average potato costs a quarter," he said. "It is one of the few values left."

The new p-o-s materials were "just printed a week ago," Mr. Pemsler said April 7.

Within the next week, when the commission's field retail marketing directors "start traveling again," they will be taking those materials along and offering them to retailers.

The potato category provides "a good opportunity for retailers to grow because it does fit a lot of the consumer trends" such as "more eating at home, more focusing on value meals and - for those people who are struggling financially - probably more side dishes than steaks," he said. Products that retail for $5 per pound "are really hurting right now," he said, but something that goes for 25 cents each, like a potato, "is going to do better."

One concern that retailers have expressed about potatoes is whether there will be a steep spike in late-season prices like there was last year. But a look at current inventory levels should give them reassurance, Mr. Pemsler stated. "Right now, inventory levels are such that it looks quite promising" that they will last until the new crop starts in late summer. Inventories are not so high that "we are going to dump" excess product at the end of the season, nor are they so tight that it "will cause a spike like we had last year," he explained. "The Idaho industry right now is well situated to meet the needs of retailers through the beginning of the next crop."

Different voices in the produce industry have said different things in that regard, he said, "but at this point, all of the Idaho shippers that I have spoken to -- and I speak to most of them -- are telling me that we are tracking. ... It is a normal, typical year. We expect to work through inventories right about the time the new crop comes in, so there should not be an issue" with price spikes like there was last year.