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IPC continues to expand international marketing programs

BOISE, ID — The 75-year-old Idaho Potato Commission has historically focused its marketing efforts on the domestic market, but about eight years ago the group began to undertake an international market development program.

That effort has continuously expanded since its launch, spearheaded by Seth Pemsler, vice president of retail, who added an “international marketing” tag to his title. Albers-PemslerAmanda Albers, international marketing manager, and Seth Pemsler, vice president of retail and international, are driving the Idaho Potato Commission’s international expansion. (Photo by Rand Green)It has received an additional boost with the hiring in 2010 of Amanda Albers as international marketing manager.

Exports of fresh Idaho potatoes were almost non-existent 10 years ago, aside from a small volume of product going into Canada. But since then, global demand for fresh potatoes has led to dramatic increases in geographic distribution of fresh potatoes from Idaho and other U.S. potato-producing states, and the Idaho Potato Commission’s market development programs now reach into various countries from Mexico to China.

“Each year, we try to add new markets as opportunities rise and now that Amanda is here, we can do a lot more,” Mr. Pemsler told The Produce News. “This year, the commission is focusing its efforts on several new markets beyond those that we have done historically.” Among those are South Korea, Vietnam and Panama.

In South Korea, “the market opened a couple of years ago, and then they implemented the free trade agreement” allowing increased imports of fresh table stock. Unfortunately, that market has subsequently closed to potatoes from the Pacific Northwest due to concerns over a recently discovered pest in the region, Ms. Albers said.

“It recently reopened to chipping, but not to tablestock,” so the commission’s plans for South Korea are “on hold until that issue is resolved,” she said.

The commission announced last year its plan to open an office in South Korea, its fifth international office, and “we had a trade mission all set up for November of last year,” Mr. Pemsler said. Both of those are on hold for the moment, “but when it reopens, South Korea will be a huge focus of ours. It is a big opportunity.”

In Vietnam, the market opened in 2010, and the commission is “getting ready to develop that market” through its office in Southeast Asia, Ms. Albers said.

“Vietnam is going to become one of the core markets” for the commission.

Panama has “one of the fastest-growing economies in Central America and South America and is the second-largest market for U.S. products in Central America,” Ms. Albers said. Under a new free trade agreement, fresh potatoes are allowed to enter duty-free under increasing quotas. The commission had a trade mission to Panama scheduled for late January.

U.S. potato exports have been increasing significantly in recent years, and Idaho is focused on securing what it deems to be its fair share of those markets.

Last year, $1.6 billion worth of potato products were exported worldwide from the United States — a 10 percent increase in volume over the previous year and a 58 percent increase over 10 years ago.

“It is definitely important for us to be active to ensure that Idaho is being competitive,” Ms. Albers said.

Idaho has a 33 percent market share of fresh potatoes at retail in the United States, said Mr. Pemsler.

“We should probably have a similar market share internationally,” he said. “There are certain markets that we should own, and there are some that are going to be price-driven and buy from the cheapest source, which is not usually us.”

The commission’s goal is also to have a 33 percent share of the frozen potato export market, Ms. Albers said.

“Because 70 percent of all dehy comes from Idaho, it is a significant opportunity as well,” said Mr. Pemsler.

“We want to support all three,” fresh, frozen and dehydrated, Mr. Pemsler said. “We want to really expand fresh. We think fresh has a huge opportunity.”

The commission currently has four international offices, Mr. Pemsler said. One focuses on Mexico; one on Central America, South America, Puerto Rico and the Caribbean; one in Hong Kong, which also covers Macau and China; and one in Malaysia, servicing Southeast Asia, where the primary focus has been Malaysia and Singapore, with Vietnam soon to be added to the group.

“We do a number of different projects in different markets,” Ms. Albers said. Among them are trade shows, trade missions, reverse trade missions, in-store promotions, sampling and retail training. “One thing Seth did this fall was some retail training in Malaysia” for all of the produce managers at one of the larger chains. “It was really well-received,” she said.

“Seth and I spend a lot of time working to develop long-term international customers, making sure that it is the right contact for our products,” Ms. Albers added. We try to position [Idaho potatoes] as a premium product, so we are not working with just anybody in international markets. We are trying to make sure we are targeting the right customer to fit our product.”

Idaho producers ship various types of potatoes to international markets, but “the lion’s share” of exports is the famed Idaho russet, according to Mr. Pemsler.

Canada remains the largest export market for Idaho potatoes, and Mexico is “our second-largest export market on the fresh side,” even though Idaho is currently allowed to ship fresh potatoes only into border communities, Ms. Albers said.

“One of the reasons we are heavily focused in Mexico is because of the opportunity for the market to open,” she said.

A concerted effort is underway by the U.S. potato industry to make that happen, and once it does, it is expected that the market would grow fivefold virtually overnight. Last year’s sales were about $35 million, so that should jump to about $150 million, according to the U.S. Potato Council.

The commission has been actively involved in Mexico for close to eight years and that nation is “our longest core international initiative,” Mr. Pemsler said. It also holds “our biggest opportunity.”

One new thing in the commission’s international programs this year is the introduction of a Potato Lovers Month contest in an export market. It will take place in the Caribbean, supported by a Spanish-language website featuring recipes designed to fit the Hispanic taste, according to Ms. Albers.