Successful retail promotions helped move huge 2009 Idaho potato crop
by Rand Green | September 15, 2010
"The biggest highlight" of the 2009-10 marketing season for the Idaho
potato industry is the fact that the industry successfully moved “a very large
crop,” said Seth Pemsler, vice president of retail for the Idaho Potato
Commission in Eagle, ID. That achievement was attributable in a significant
degree to some “hugely successful” retail promotions by the commission and
“At the beginning of the year, we were faced with this massive crop, not just
in Idaho but everywhere,” Mr. Pemsler said. The challenge throughout the year
was to get the crop “moved through the system” so that the storage facilities
would be empty by the time the 2010 harvest started. It seemed a daunting
task, but “we successfully moved” that large crop, he said.
As of Sept. 8, when The Produce News talked to Mr. Pemsler, most of the
shippers had finished shipping all of their old crop and had either begun to
ship new-crop Norkotahs or were shut down and doing maintenance on their
facilities in preparation for the new crop.
“There are a couple [of packinghouses] still running [old-crop potatoes], but
they will run out by the time the new crop comes in,” he said.
“By far, that is the most significant accomplishment of a marketing
organization such as a commission — to assist the shippers in getting all the
product they have sold, so that they can be prepared for the new year,” Mr.
During the early part of the 2009-10 marketing year, potato prices were
exceptionally low because of the large inventories. But prices improved as
time went on, and particularly as the old crop began to clean up. “Right now,
pricing has been increasing,” he said. “So we are returning to more traditional
pricing after a very low pricing year.”
While an increase in prices might seem at first impression to be something
retailers would not favor, “the fact is, pricing got so low this year that
everyone was using [potatoes] as a price competition, so retailers were
actually not making as much margin” as they would have done at more
moderate prices. “When you sell potatoes for 99 cents [per bag],” how much
margin can you make?” he asked.
“So going back to more reasonable pricing is actually good for everybody,”
including retailers who are not forced to compete on price with lower-than-
normal margins, he said.
Among the keys to the year's success in moving such a big crop, according to
Mr. Pemsler, were two highly successful bin promotions and “a hugely
successful Potato Lovers Month Contest with 2,300 entries.”
In the bin promotions, he explained, “we offer an incentive to the retailer to
put a bin on the floor” with bags of Idaho potatoes. “We can define the size” of
the potatoes in the bags, and “in this case, it was small” potatoes. The
commission ran two such promotions with bags of small potatoes during the
year, at times when there was an excess of small potatoes being packed. “A
shipper has to run continuously,” so if the potatoes that the shippers are
bringing out of storage and running through the packingline are heavy to
small potatoes, “they get too many bags.” Conversely, if the potatoes being
run are heavy to large sizes, they would get too many cartons, and different
types of promotions would be required.
In this instance, the challenge was moving the excess of smaller potatoes, and
the bin promotions, featuring bags with small potatoes, helped move a large
volume of small potatoes and balance out the mix.
There were other promotional activities as well. As an example, “we started off
the year with a tie-in with Fresh Gourmet, which had a coupon good for 75
cents off Idaho potatoes, merchandised typically in the produce section” next
to the potatoes, he said.
“All those were activities that we did early in the year and through the first six
months, which helped stimulate demand,” and over the course of the year,
Idaho’s market share increased by four percentage points. “The majority of
that went through the retail channel ... because the foodservice channel is
down and the retail channel is up during recessionary times,” he said.
“Consumers are eating more potatoes at home and less potatoes out.”
For the 2010-11 marketing season, “we are starting off the year right away
with a three-month promotion with Fresh Gourmet,” with the additional
component this year of a retail sweepstakes,” Mr. Pemsler said. It will kick off
Oct. 1 and run through December.
Potato Lovers Month (February) will be “similar to last year but, we believe,
more successful,” with Mrs. Dash as the tie-in partner for the second year.
“Mrs. Dash is going to drop an FSI in February with a potato recipe” and
probably a potato coupon, he said.
“There will be additional tie-ins,” yet to be announced, in late winter and
spring. And “as always, we will be out there offering retailers ad allowances”
for running ads with the 'Idaho’ seal, he said. “That is something we have
found to be very effective.”
(For more on Idaho potatoes, see the Sept. 20, 2010, issue of The Produce