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IPC programs look to drive demand

by John Groh | September 10, 2009
SUN VALLEY, ID  When the Idaho potato market finally recovers, the industry will be poised to move a high volume of product thanks to the marketing plans put in place by the Idaho Potato Commission. But until then, it will be a waiting game as a combination of overproduction and a down economy is hampering the market for Idaho potatoes.

At the 81st annual Idaho Grower Shipper Association convention, held Sept. 2-4, here, Jerry Wright, chief executive officer of United Potato Growers of Idaho, gave his annual assessment of where the market is from an acreage and production standpoint.

Mr. Wright said at the Sept. 2 luncheon session that acreage this season is 317,341  up about 15,000, or 5.5 percent, over last year. Volume is expected to be about 30.5 million to 31 million hundredweight; in 2008, the state shipped just over 30.4 million hundredweight, which was the lowest amount shipped in 14 years.

According to Mr. Wright, whose team conducts digs and surveys of potato fields throughout the state, the shipping year started favorably, and growers were getting a decent return on their product, with a grower return index of $11.71 for the September-through-December period. The GRI dipped to $7.05 for the January-through-July timeframe, and as of April the return was eclipsed by the cost of production.

"So if you got in the first couple of months, you were cheering all the way to the bank. If you were in it at the end, it was a different story," he said.

He added that this was no surprise. We knew back in October or November that this was the type of crop we would have, but we just continued to go after the money, and we saturated the market and ran it down. The lesson here is to use the information we have available to our advantage.

Regarding shipping trends, Mr. Wright said that for the latest 12 months, total U.S. shipments are down 1.9 percent; for the last six months, they are flat; and for the latest three months, shipments are up 3.7 percent, which correlates to a drop in price. So this indicates that we can move potatoes at the right price, he said.

Also, nationwide, Mr. Wright said that the potato industry has shipped 1.9 million hundredweight for four of the last six weeks, completely saturating the market. I just can't take any more potatoes. We are pushing [product] on foodservice and retail like they have recovered, which they have not. The market will not straighten out until we do something different. We probably have more potatoes than we need this year, given the state of the economy and the fresh market. If we had a normal economy, we would have a pretty balanced market.

The Idaho Potato Commission sponsored the Sept. 3 breakfast session and detailed its marketing and public relations programs that are designed to move product through the retail and foodservice channels. This year, the theme of the commissions efforts will focus on both the value and nutritional qualities of Idaho potatoes, using the tagline, Watching Waistlines and Wallets.

The key message for us is one of value, said Frank Muir, president of the commission, who kicked off the IPC presentation. For about 25 cents, a potato gives you the best nutritional return on investment, with 45 percent of your vitamin C and 20 percent of your potassium, and all kinds of other good nutrients as well. We are combining nutrition with affordability and value, which is really resonating with the consumer.

As in past years, the commission will continue to lean on celebrity endorsements as a way of promoting Idaho potatoes, and it will continue its relationship with both Denise Austin and Dawn Wells. Ms. Austin kicks off the efforts with the Welcome to Idaho campaign, which will run mid-October through January. Clips of her will feature the value message and will run heavily in spot markets on major television networks.

Ms. Wells was featured in a YouTube video last year demonstrating how to peel an Idaho potato. The video was viewed by over 5 million people, making it a smashing success. The commission will build on that success with additional videos featuring Ms. Wells, said Mr. Muir.

This year, the commission also will be working with Art Ginsburg, aka Mr. Food, a television personality who is famous for his Oooh, its so good tagline.

Mr. Muir said that Mr. Ginsburg served as a guest chef for the commission at the Food Networks Wine & Food Festival in Miami last year, and he is popular with all age groups and his message is all about value. We are going to produce three TV vignettes with him, and he will be involved in a recipe contest to promote 'Watching Waistlines and Wallets.

Another celebrity on board with the commission for the coming year is Olympic cyclist Kristin Armstrong, who hails from Idaho. Mr. Muir said that a satellite media tour is scheduled with Ms. Armstrong after she competes in the world championship run in Switzerland.

Mr. Muir said that he learned from Ms. Armstrong that many European cyclists keep a baked potato wrapped in foil tucked into their shorts for a burst of energy during a race. He also said that she is using a company that designs potato blades used in processing to custom design a special derailer for her bicycle.

Social networking sites Facebook and Twitter also will be part of the IPCs promotion plans, said Mr. Muir, who added that other communications efforts also will be ramped up, such as the Idaho Potato Pulse newsletter and the various media spots on national and local news and talk programs.

We have strong demand-building programs, and were seeing people start to come back to potatoes, said Mr. Muir. Were going in the right direction.

Don Odiorne, vice president of foodservice for the commission, followed Mr. Muir with a report on the IPCs foodservice activities. Like other areas of the economy, foodservice has struggled, even more so than other components due to consumers belt-tightening.

Mr. Odiorne said that during the past 12 months, nearly 4,000 restaurants have closed, and dinners are down 28 percent, which takes a huge toll on our profit. Additionally, there has been negative traffic in seven of the last nine months. Casual and upscale steak chains have been especially hard hit, which is where we typically excel.

On the other side, we are seeing some positive trends, he continued. Weekend volumes are up. People that bought potatoes realize they dont always know what to do with them, and so they are going to restaurants more. While we are probably a year away from recovery, we are seeing some signs and making some progress.

Mr. Odiorne also said that MenuMine, an on-line database of chain and independent menus that tracks the top 200 restaurant chains, has shown that menu planners and chefs have added 1,831 new menu items, with 24 percent featuring potatoes as a side dish or ingredient, which bodes well for the potato industry.

Initiatives for the commission on the foodservice front include targeting people who handle menu development, as well as continued participation in national and regional trade shows, highlighted by the annual National Restaurant Association convention.

Also, there will be an increased push with on-line activities, with videos and enhanced searches available on the IPC web site. And new this year will be an on-line column called Ask Dr. Potato, which will answer inquiries and offer preparation tips and advice.

Following Mr. Odiornes presentation, Seth Pemsler, vice president of retail and international for the commission, spoke of promotion plans to move Idaho potatoes through the retail channels.

Mr. Pemsler said that the 2009 season got off to a really tough start. We had delayed harvest, extremely high-price history, which hampered our ability to sell to retailer customers, and saw some really angry retailers due to pricing volatility. And we had some confusion among states. Normally there is a more orderly flow in the beginning of the year, and it didnt quite work out that way. Certain states had the opportunity to take advantage of Idaho, and they did.

But Mr. Pemsler said that the new calendar year brought more stable prices and a willingness by retailers to run some ads again. And the recession brought more interest in value, which is our core message. Numerous [IPC] programs kicked in to help stimulate the market.

One of the successes for the commissions retail promotions was the jumbo bin promotion, which is a tool to try to stabilize the carton market. Publix, which operates 1,000 stores, ran two major ads and increased their volume by 11.5 percent over a six-week period, which is big volume, said Mr. Pemsler.

That promotion was followed by a program with Texas-based retailer H.E.B., which ran a tie-in between Idaho potatoes and Chef Paul Prudhommes seasoning line.

Sandwiched between the two retailer partnerships was the commissions annual Potato Lovers Month promotion, which worked very well in moving some volume, said Mr. Pemsler, who said that shipments were up over 3 percent from January to June as a direct result of IPC promotional activities. He credited the commissions field team, the members of which are in stores each day making face-to-face contact with retailers. This is a resource that is unique to our industry, he said.

Mr. Pemsler also said that a bin promotion with Safeway worked very well last year and will be continued this year at virtually no additional cost, since there were 500 bins left over from last years effort. We will use those this year during the holiday in key divisions. Kent [Beesley, western regional field merchandiser] has done a great job developing the relationship with Safeway, and youll see that pay off, he said.

Another key retail initiative continues this year with the commissions comic book campaign, an award-winning promotional effort that was well received by the trade last year.

This year, we have a series of eight new ads with the theme, The Adventures of the Idaho Potato Retailer. These help break through the clutter. Retailers have a lot of fun, and the idea of having a comic book about them will increase the impact of the campaign, said Mr. Pemsler. We will also be sponsoring our exclusive edition of The Produce News again at the end of this year, and we are running a series of teaser ads on the front page of The Produce News, which is a first.

Finally, the participation in both national and regional trade shows will continue for the IPC, said Mr. Pemsler, who added, We have great retail interaction at these shows. They offer a great way to get to know the retailers and help build relationships.