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Potato leaders address PGU controversy at IGSA Convention

by John Groh | September 08, 2011
Frank Muir, president and chief executive officer of the Idaho Potato Commission.

SUN VALLEY, ID — The 83rd annual Idaho Grower Shippers Association convention, held here Aug. 31-Sept. 2, featured a plethora of educational sessions and networking opportunities as well as a dose of controversy, as the top officials of two leading potato organizations addressed a topic that has created a rift in the industry.

Tim O’Connor, president and chief executive officer of the U.S. Potato Board

At issue is the U.S. Potato Board’s “Potatoes: Goodness Unearthed” campaign, which looks to attach a generic brand to potatoes produced by its members. The Idaho Potato Commission believes that campaign runs to the detriment of its own vigorously protected “Grown in Idaho” seal, and it wants dramatic changes made in order to preserve the “Idaho” brand.

At separate sessions held on consecutive days during the IGSA convention, Frank Muir, president and chief executive officer of the IPC, and Tim O’Connor, president and CEO of the U.S. Potato Board, gave their views of the issue and where each organization stands.

Mr. Muir capped his annual IPC marketing report Sept. 1 with a 15-minute update on where the commission stands with the PGU campaign. He said that there are two emergent issues the IPC is addressing.

“First, at least three states are using the PGU as a brand, and we feel that consumers believe PGU is connected with Idaho,” said Mr. Muir. “Second, the U.S. Potato Board had meetings with Walmart about designing a new potato bag with the PGU seal, and it had a strategy for meeting with other retailers as well, some of which are exclusively Idaho potato customers.”

Mr. Muir said that this initiative would create further consumer confusion and also increases retailers’ leverage to lower prices, since Idaho would have to drop its prices in order to keep those markets.

He said that the commission appealed to Walmart to drop the PGU seal and instead use the American Heart Association’s Heart Check mark.

“Walmart’s director of produce immediately responded and agreed to use the ‘Heart Check’ mark instead, saying that it was a much more recognized brand than PGU,” said Mr. Muir.

The IPC chief said that going forward, the commission wants the U.S. Potato Board to provide specific guidelines and prohibit brand-like use of the PGU logo, which has been seen in at least three other states; provide specific plans about how the board will maintain control of the PGU mark; provide a specific plan about how it would enforce misuse of the PGU mark; and finally, the IPC wants defined very clearly the committee that would be in place to approve the use of the PGU bags and how Idaho would fit into that committee.

Mr. Muir said, “The PGU label was not always including the three nutritional call-outs for potatoes, and we feel that the purpose of the ‘Goodness Unearthed’ message was nutrition, so why would they take the message off and just leave the trademark? I would rather see the trademark decreased and increase the nutritional message because that was the original intent of the PGU.”

The IPC also asked that any current brand-like bags would cease and desist within six months, and that the board cease calling on retailers unless all shippers — not just Idaho — that are currently shipping product to that customer nationwide approve.

“There has to be a clearly understood purpose as to why they are going [to a retail customer], so there is not a surprise like what happened with Walmart,” said Mr. Muir.

“I know there is a lot of good information that the U.S. Potato Board provides, such as category and consumer information,” Mr. Muir continued. “But what we ask is that they provide that information to all the shippers and state managers throughout the country and let us all provide the information to the retailers. We believe, especially in Idaho, that we are more than qualified to present that information. We have our field staff and shipper organizations, and we are confident that the rest of the country can do the same to the degree they need to.”

Mr. Muir concluded by saying that research conducted by the U.S. Potato Board and Walmart about the most important factors when designing a bag affirms the IPC’s argument.

The research indicated that the most important factor is the type of potato. But the next most important factor that drives purchases is growing location.

“To us, that means Idaho,” said Mr. Muir. “Every piece of research we have done for the last eight years, growing location has to do with Idaho. That is why we in the potato industry in Idaho will do everything possible to protect the ‘Grown in Idaho’ seal, even if it gets to be an uncomfortable situation like this is now.”

Mr. O’Connor addressed convention attendees the next morning during the Sept. 2 breakfast session, saying, “Quite frankly, it’s not enjoyable to have this issue between the Idaho Potato Commission and the U.S. Potato Board. Obviously, that relationship is critical, since [Idaho] is the single-largest producing state and is extremely important to the industry. Our goal is to have a very solid working relationship. At the heart of it, the opportunities and challenges we face come from the outside, and to move forward, we need to work together.”

He added that significant steps have been taken toward resolving the issues.

“Our board, at its summer meeting, made some decisions about what it would be able to do to respond to some of the issues raised by Idaho,” said Mr. O’Connor. “I can’t really get into all the details today, but I want to say that the process we go through with our national board is a little bit cumbersome, by design, because the organization is set up to do things methodically. But I think that what we have done to date are solid steps.”

First, he said, the four package designs that were problematic will be discontinued and the owners of those packages were informed that they could no longer be used after a wind-down period.

Also, Mr. O’Connor said that the board has drafted a first round of language for a new set of regulations to prevent this from happening again, and the board will be looking for input from members on how the PGU label can be used as a nutrition message and not as a dominant image. There will be a clear set of regulations, licensing agreements, a design-approval process and an enforcement process to make sure that the PGU label is used correctly.

“So that is where we are at this point,” he said. “I recognize that not every issue Idaho raised has been fully addressed. There are things left on the list, and there will be more conversations. We also recognize that some of the things that Idaho wanted and the decisions of our board were not in 100 percent agreement with what Idaho had asked. But I am looking forward to the opportunity to get those matters resolved, and I feel like there is a serious commitment from both sides to do that.”