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Vol.1 ISSUE 1 FALL 2007
As part of the continuing effort to introduce US frozen potatoes into new channels with new-to-market products, the United States Potato Board (USPB) invited award winning chefs from Thailand, Singapore and Mexico to the United States to better understand the numerous benefits of purchasing US frozen potatoes. Newly hired USPB international representatives from Thailand and the Philippines also joined to hone their potato production and application knowledge during the first week of the Reverse Training Mission (RTM), October 2007.
These guests began their potato learning expedition in Tri-Cities, Washington with field-to-freezer tours organized by Matt Harris, Director of International Trade of the Washington State Potato Commission (WSPC), along with USPB Board Members Ted Tschirky and Jared Balcolm. The visitors were warmly welcomed by the many Washington State growers who attended a dinner event.In addition to learning about the various types of potatoes, these international chefs learned about potato nutrition. To get a better understanding of the quality of US potatoes, the guests observed potato harvest in progress, visited a potato storage unit, and toured a packing facility followed by a processing facility. Additionally, the chefs were treated to a wide array of frozen potato products, helping them identify the infinite ways frozen potatoes could help them in their businesses. One R&D foodservice chef from Mexico was very pleased with the many kinds of frozen
mashed potatoes available, stating, “In Mexico, we can’t get a constant supply of quality fresh potatoes all year round, plus I think we could eliminate costs and increase consistency of our menu items by purchasing US frozen potatoes.” She now plans to try to source US frozen potatoes for her chain restaurants throughout Mexico, representing net new business for US frozen potatoes.
After touring potato country, the group moved on to San Francisco and the Napa Valley area for the potato culinary and trends portion of the training. After learning about the many ways potatoes fit into US food trends during a visit to USPB marketing partner, Ketchum Advertising’s Foodservice Marketing Division, the participants were treated to an eight-course potato dinner at Pres a Vi Global Cuisine and Wine Bar by Executive Chef Kelly Degala. This small plate menu concept restaurant provided an abundance of potato samplings, and the waiter was even able to explain US potato origins and varieties as the courses came out. A trip to Napa offered participants a chance to visit the Culinary Institute of America (CIA)/Greystone as well as COPIA, The American Center for Wine, Food and the Arts. While at COPIA, the international group participated in a private outdoor cooking demo of frozen potatoes by chef consultant and caterer, Denise de Somer. The frozen potato recipes utilized an outdoor BBQ grill, a wood-fired stove, as well as an outdoor cook-top range, all part of the latest rage in the US culinary arts.
At the end of the tour, all participants agreed this RTM increased their knowledge of the versatility and many nutritional benefits of high quality US frozen potatoes and their interest in incorporating US frozen potatoes into their menu offerings. This represents another success for the USPB International Frozen Marketing Program in building global demand for US frozen potatoes.
G Market, the largest online shopping network mall in Korea, is now selling US frozen potatoes. The newly launched products include frozen shreds and mega crunch fries. It is too early to know how sales are going, but this new channel for US frozen products should provide many new opportunities for US processors. Generic promotional support by the USPB to help improve sales is now being investigated.
A beauty consulting program, “Get the Beauty”, on the Olive Network, featured a cooking class on US frozen potatoes. Done under the theme of Rachel Ray Master Cooking, the featured recipes were also uploaded to the “Get Beauty” home page.
Under a more traditional medium, a celebrity cookbook, Woo Young Hee’s “Easy Cooking”, was published with a two-page nutrition message on potatoes, arranged by the USPB. There were also recipes utilizing frozen wedges in the cookbook.
Healthy potato campaign helps reclaim Korean retail shelves. Since the acrylamide issue hit the Korean market several years ago, many Korean retailers pulled frozen potatoes from their shelves. Those still selling frozen potatoes were less aggressive in promoting them. To combat lingering negative impressions from acrylamide and health issues, the USPB designed a healthy potato campaign coupled with retail sales promotions to launch new products.
Through cooking classes, advertorials, PR articles and TV cooking shows, the campaign increased consumer and trade awareness of the healthy and convenient aspects of US frozen potatoes. Simultaneously, eight new products were launched at five retail chains in 35 stores nationwide. Sales from the new product launches averaged 600 kg per store, equating to total net new sales of about 1.8 tons of US frozen potatoes per month.
Due to excellent sales of a new microwaveable frozen potato product launched in 2006, the "Range Potato", as well as promotional support by the USPB, the H.J. Heinz Company Japan launched an additional range potato using skin-on US frozen potatoes on September 1, 2007. Packed in convenient 80 gram boxes, these lightly-salted, crinkle-cut wedges, “Ore-Ida® Crisp and Crumbly Microwave Potatoes”, are ready in just three minutes in the microwave. With the special heating sheet, the potatoes are not only delicious, but stay crispy. Japanese consumers can find these single-portion sized US frozen potatoes at large chain supermarkets and convenience stores throughout Japan. There are potential new launches of other flavors in this series depending on customer response to the Ore-Ida Crisp and Crumbly Microwave Potatoes.
Microwave fries send retail sales soaring in Japan. Non-fried and specialty frozen potato products enjoyed huge success in Japan during Marketing Year (MY) 2006/2007 after the USPB promoted their combination of good nutrition and convenience. Frozen crinkle cut potatoes, called “Range Potatoes,” were introduced in special boxes designed for use in a microwave. Easy to prepare on-site or at home in just three minutes, this product contains less oil due to the final preparation in a microwave. Lawson’s, one of Japan’s largestconvenience chains with 4,130 outlets, began carrying “Range Potatoes” in December 2006. In March 2007,seven more retailers, representing 5,000 outlets, followed suit. Since this product launched, the market for microwaveable potato products has grown 60-70 percent. Net new annual sales of “Range Potatoes” were upwards of $4.7 million last year. Successes like these helped total US frozen potato exports to Japan to rise 6 percent by volume and 5 percent by value in MY 06/07.
Frozen mashed potatoes in Japan nudge consumption higher. By presenting new serving ideas to stimulate new product launches, the USPB successfully introduced US frozen potatoes into new channels in Japan. The traditional foodservice sector in Japan launched nine US frozen potato items in MY 06/07.
This involves adding vegetables and other items to already healthy frozen and dehydrated mashed potatoes. “Sunday Sun” launched frozen mashed potatoes on 13 different menu items.
The chain was interested in not only differentiating its menus from competitors, but also in simplifying their operations via the convenience and cost advantage of the new potato items—messages delivered during the seminar. The chain now purchases 10 MT of US frozen potatoes a month.
The USPB is increasing demand for US frozen potato products in Mexico by reaching both trade and consumers. Targeting Mexican foodservice is accomplished through restaurant chain training and tailored seminars held in conjunction with importers and distributors. Consumers are reached through restaurant and retail promotions, while both sectors benefit from the positive potato profile information distributed through a detailed public relations program.
In August 2007, USPB engineers conducted 49 restaurant chain training sessions in Mexico City and Monterrey, for quick service, family dinning and pub style restaurants. Ten tailored seminars were held in Mexico City, Toluca and Monterrey for the El Arrabal restaurant chain, the Piccolo Mondo restaurant chain that had just begun to serve US frozen potatoes and the Papalote chain. Retail promotions and tasting were conducted with Wal-Mart, Bodega Aurrera and HEB supermarkets. In total, 84 sampling days were achieved with these three retailers at their stores in northern Mexico.
The potato profile management program continued to provide healthy potato public relations with the issuance of a press release on diabetes and carbohydrate consumption. During August there were five pick-ups of USPB press releases in different media from magazines to web sites. The magazine Cocina del Diario, a consumer cooking magazine, published seven delicious USPB recipes, while the website, Restaurantes de Mexico, a trade site, published a number of recipes using US potatoes.
Mexico public relations raise awareness of product benefits. These activities in Mexico raised awareness of the benefits of US frozen potatoes. By ensuring that consumers sustained a positive image of US potatoes, the program aided export growth, whereby volume rose 2 percent to 91,627 metric tons and dollars up 8 percent to $77 million in MY 06/07.
More than 386 key media contacts received a new PR kit, as well as monthly press releases crafted by a Mexican dietician. This provided excellent positive coverage for US frozen potatoes, with 20 different Mexican media—including popular nationwide magazines and newspapers—picking up the stories. Television coverage on four different cooking shows gave further exposure to US frozen potatoes and their positive attributes.
Movie-goers in Mexico can now eat fries or popcorn, thanks to a USPB initiative to enter new channels with new-to-market frozen products. The USPB held chef demos and contests, and had merchandisers visit potential new customers.
Due to these efforts, a large movie theatre chain, Cinépolis, with 120 units in total, began trial use of US potato products. Successful initial sales spurred 102 movie theaters to add new frying equipment and two types of frozen potatoes to their menus.
The Cinépolis group plans to increase outlets offering potatoes, as well as maintain 100 percent US frozen potatoes on their menu. The USPB supported the chain via point of purchase materials and helped train theatre staff through a training video and hands-on chain training.
USPB programs for frozen potato products in Malaysia and Singapore are resulting in the addition of new and additional products to menus and retail shelves. The activities carried out to generate these results include restaurant chain training, promotional support and merchandising.
In fact, the chain training activity has been so successful in improving in-store preparation and handling that the owners of A & W Malaysia and Burger King Malaysia have requested training programs for all their outlets and in-depth seminars for all their managers.
Cold Storage, a 30 outlet supermarket in Singapore, introduced four new US frozen potato products. Mary Brown Fried Chicken in Malaysia added Curry Shaken Fries to the menu in celebration of Malaysia’s 50th Independence Day celebration.
Nikko Hotel in Kuala Lumpur, the largest city in Malaysia, added a US hash brown patty to their breakfast menu. Chinzo on the Park in Kuala Lumpur added US straight cut fries to a menu that already featured crinkle cut and wedges from the US. Burger King East Malaysia and the Concorde Hotel in Kuala Lumpur have switched to sourcing only 100 percent US frozen potatoes
Staff from the USPB International Marketing Department spent a week in Moscow recently learning about the Russian potato market and the potential for US exports. The visit was organized by the USDA Agricultural Trade Office in Moscow and coincided with the “World Food Show”, which featured food products from around the world and Russia.
While Russia is the second largest potato producer in the world, the assessment team learned only 10 percent of this production occurs on commercial farms with the rest on peasant plots or personal gardens outside the major cities. Additionally, potato storage is very poor, with imports from Europe and the Middle East beginning in January and running through June. There is no frozen potato processing in Russia, though McCain’s has been exploring the prospects for a number of years now.
Some basic dehy processing does exist, but it is not of good quality. There is, however, a new large scale dehy plant being built this year. Initial contacts indicate strong demand for dehydrated potatoes for food manufacturing in western Russia.
There was also good interest in fresh potatoes during the winter and spring from both western and eastern Russia. Interest in frozen potatoes from the US in western Russia was limited, but there are exports currently going to eastern Russia. USPB staff will visit eastern Russia in the spring of 2008 and make a final decision at that point in terms of the establishment of a marketing program in this vast and economically growing country.
For the marketing year July 2006 – June 2007 (MY06/07), the USPB reports total US potato exports were valued at a record $1,000,252,000. On a volume basis, total exports were 1,108,391 metric tons (MT). This represents an increase over MY05/06 of 5 percent in volume and 13 percent in value.
On a fresh weight equivalent basis, exports were equal to 52,174,591 cwt of raw potatoes, representing roughly 15 percent of total potato production in the United States and continuing a five-year trend of increasing exports.
Frozen program propels international sales to new record. The increase was led by exports of frozen potatoes which reached 679,510 MT, valued at $550 million, and with a fresh weight equivalency of 25 million cwt. This is an increase in both volume and value of 16 percent from MY05/06 and represents record levels of exports of frozen potato products. Overall, exports climbed 41 percent over the past 10 years and averaged more than 10 percent growth during the past four years to reach their current record levels.
The top export market for frozen products continues to be Japan at 253,810 MT, which grew by 6 percent this past year. Other top export markets with their annual growth percentage are Mexico, 91,627 MT (2 percent); Canada, 80,266 MT (63 percent); China, 39,561 MT (31 percent); Taiwan, 31,642 MT (64 percent); Korea, 28,779 MT (-11 percent); and the Philippines, 28,328 MT (56 percent).
It is interesting to note exports to the Central American Free Trade Agreement (CAFTA) countries grew 8 percent to a total of 45,007 MT. In most cases, increases in US exports were due to overall expansion of consumption in the foreign markets, however, the US also benefited from short supplies in Europe to take market share away from the EU.
To demonstrate there are many, many healthy frozen potato options, the USPB has developed a list of frozen potato products which have zero grams transfat, less than 35 percent of calories from total fat, less than 10 percent of calories from saturated fat and less than 300 milligrams of sodium.The list was introduced recently at the School Nutrition Association Annual Meeting in Chicago. During the three-day event, thousands of school foodservice employees came by the USPB booth and picked up the “Frozen Potatoes Make the Grade!” list, along with Potato Power, a school foodservice brochure with new kid-friendly recipes, the “Dig This!” Poster and lesson plan on the potato nutrition label, plus information on the USPB’s Wellness Grants for schools.
The USPB, which attended the National PTA Convention during June 2007, plans to continue programs that educate school personnel and parents about the positive nutritional qualities of potatoes.
In June 2007, Cheryl Koompin, USPB International Marketing Committee Co-Chair and Idaho grower and Susan Weller, USPB International Marketing Manager, Frozen Potatoes, headed to China for the National Excellence Awards ceremony and training seminars held in Guilin, China (Southwestern China close to Vietnam). Eighteen award-winning companies from 12 cities and representing all four regions of China were in attendance.The winners were selected because of their outstanding promotions featuring US frozen potatoes conducted during the past year. A tight two-day schedule allowed each participant the chance to understand the latest culinary trends in the US, as well as some key promotional skills.
Koompin gave a presentation on potato nutrition while Weller provided the audience information on US frozen potatoes: quality, value and versatility, as well as 2007 US food trends with the incorporation of potatoes. In addition, USPB China Representative Daniel Chan spoke about marketing and helped encouraged the flow of new potato menu ideas by the participants through an interactive marketing session.To inspire the development of new dishes using US frozen potatoes as an ingredient, the participants were able to observe detailed preparation procedures for local cuisine recipes during a live demo by a Chinese chef.
Nutrition focus in China puts potatoes back on consumers’ plates. The USPB’s potato nutrition campaign in China successfully impacted consumer perceptions regarding potatoes, helping reverse declines in sales due to health concerns. The nutrition campaign originated in 2005 as acrylamide became a hot media topic. The campaign delivered correct and positive potato nutrition information using press releases, advertorials, a seven city media tour, potato nutrition seminars, a reverse trade mission for media and work with local Chinese nutritionists and industry members. As a result, positive media coverage on potatoes increased to 56 percent of overall potato coverage from a mere 5 percent, and consumer perceptions regarding US potatoes improved significantly, according to an April 2007 survey. US exports, which began sliding in MY 05/06, recovered by the end of that year. The full effect became more evident in MY 06/07, when exports grew 31 percent by volume and 59 percent by value. Meanwhile, import statistics indicate the US market share of fries jumped from 48 percent to 70 percent this past year.
Source: Nielsen Scantrack® - represents 76 percent of estimated total retail frozen pound sales.
Frozen retail sales continued their pound decline, even with four (5) quarters of relatively flat retail pricing.
Projected Domestic Frozen Potato Sales from Processors to Foodservice
Source: IFMATRAC® - represents 82 percent of estimated total domestic potato pound sales to foodservice.
Frozen foodservice sales continue to perform well. Q3 represented the 9th straight quarter of pound sales increases. However, dollar increases would indicate significant price increases which could affect pound sales if operators react.
Full reports are available via email upon request. Please contact USPB Vice President, Domestic Marketing, Mac Johnson, email@example.com.
©2007 United States Potato Board