Ontario-grown potatoes could be more profitable for
everybody, according to a study released today by the Ontario Potato Marketing
Board and the Value Chain Management Institute at George Mitges and Associates.
Consumers could benefit if the industry would provide more
information about the nutritional benefits, the attributes of different
varieties and if they could buy potatoes to suit how they intend to prepare and
serve them.
Retailers would benefit from joint efforts to produce,
package and present potatoes the way consumers want them. Total revenues would
be higher, there would be less waste and there would be a team approach.
Farmers and packers would benefit from a steadier, season-long
flow of potatoes and from higher revenues. As they begin to better satisfy
consumers, sales would increase and they would learn what to produce, how to
package it and how to develop industry-wide advertising and promotion
campaigns.
Although the report does not explicitly say so, it
recommends the formation of a national promotion agency such as the one set up
by the beef industry and proposed for the raspberry industry. A national agency
has the authority of the federal and provincial governments to collect a levy
to fund marketing research, advertising and promotion.
What it does say is that the industry would benefit from a
Canada-wide advertising and marketing campaign and a national approach to
gaining regulatory and legislative authority to promote the nutritional values
of potatoes.
That picks up on an idea the authors saw in South Africa
where a national campaign promotes the nutritional value of potatoes by
featuring the benefits for runners.
In the United Kingdom, they saw potatoes packaged at retail
for four different consumer markets – mashed and roast varieties; family meal
packs; baking varieties, and “basic (value) packs.
In Ontario, they found that farmers typically push whatever
they harvest into the market as fast as they can, the packers put them into
10-pound bags of
“undifferentiated, inconsistently-sized” potatoes and the result is lower and
lower prices until the potatoes sell at supermarkets.
It doesn’t help that two groups of potato producers in the
province are “at loggerheads” and that reduces profits for everybody involved
in marketing potatoes, the report says.
The two groups – one growing under contracts for processors,
the other selling to consumers – have been joined since 1999 in a single
marketing board, but with distinct committees. They will be holding their
annual meeting at the Cambridge Holiday Inn on Wednesday.
While the industry is pushing these 10-pound bags into the
market, consumers are shopping for specific needs and often end up
disappointed.
Two surveys, one of 218 consumers, the other of 835, found
that shoppers could be segregated into three groups. The largest, accounting
for 39 per cent of shoppers, are older, better educated, are “time-starved” and
more affluent than the average; they are more willing to pay a premium for
potatoes that are unique, interesting and good for health.
The second-largest segment, accounting for 31 per cent of
shoppers, is relatively young mothers with children at home, pressed for time
and looking for convenience.
The smallest segment, 14 per cent, is keenly interested in
health and wellness.
The report recommends a pilot project to test the
effectiveness of point-of-sale promotion. This picks up on campaigning in
Australia that involves attractive recipe displays where potatoes are being
sold.
It says communications need to improve among those involved
in the marketing chain, including between the two groups of potato growers.
People involved in growing and marketing potatoes would
benefit from training to improve quality management and marketing, the report
says.
It also recommends a pilot project in value chain management
so those involved in growing and marketing potatoes can learn how to improve.
There are opportunities to reduce costs and increase revenues, the report says.
One example if evening out the year-long flow of potatoes
through packing houses. They are typically busy during and right after harvest,
but sit partly idled the rest of the year.
The study was funded by the federal government through its
Agricultural Adaptation Program and by the marketing board.
