March 2019 - 22

From cash cow to produce superstar
Potatoes are the
workhorse of the
produce department,
yet they don't receive
the attention they
should from retailers.
Potatoes are a
POTATOES USA
Kayla Dome
Global Marketing
Manager
staple in 88 percent
of all households and
they are enjoyed by
all demographics.
However, with
proper assortment
and merchandising
retailers and growers could be enjoying even
higher fresh potato sales. When potatoes
are in a consumer's basket, they spend on
average $77 compared to only $42 when they
are not. Therefore, increasing potato sales will
result in more sales across the store.
Kantar Insights Consulting, an agency
that helps create growth opportunities
in the retail sector, conducted a shelving
study and updated the Rich Mix Assortment
Recommendations for Potatoes USA to show
how this should be done. These studies
were used to establish the best practices in
merchandising of the fresh potato category
at retail. Combined, the two studies defined
four categories that drive growth. They are:
* Shelving placement
* Placement within the produce department
* Assortment
* Secondary locations
Shelving placement. Potatoes
performed best with the produce department
being located in the right, front portion of
the store (average growth of 8.7 percent). If
potatoes are displayed in raised bins, sales
can grow on average by 4.1 percent. Raised
bins have ascending layers with the bottom
level being the closest and lowest toward the
consumer. The easiest way to see growth
with this commodity is with signage. Just
by having a sign calling out the different
potatoes on the shelf and the section, 2.9
percent average sales growth can occur.
Placement within the department.
A 2.8 percent sales increase can happen
if the potato section is placed in the back,
left section of the produce department.
What would help further grow this category
is making sure the right commodities are
located nearby. If the potato section is
located across from apples, a 4.7 percent
lift in sales on average can occur. Among the
most common items located next to potatoes
are sweet potatoes, onions and squash.
Unfortunately, all three of these contributed
to a decline in potato sales. Squash caused
the biggest decline with a 9.5 percent drop
in potato sales when located adjacent to this
commodity. Placing potatoes in a standalone
shelving unit will create the biggest growth by
adding a 5.4 percent lift.
Assortment. Shelf organization can
drive a 1.4 percent growth if done correctly.
Placing the potatoes on the shelf by bulk
and packaged helps grow this category.
If optimizing the shelf vertically, smaller
packaged potatoes should be at the top
while larger bags and bulk should be at the
bottom. Vertically blocking the shelf can lead
to a 3.8 percent sales growth. Flow can lead
to a growth rate of 5.7 percent on average.
Optimize flow by merchandising potatoes on
the shelf in this order with the designated
amount for each: white (12 percent), yellow
(21 percent), russet (44 percent), purple (11
percent) and red (12 percent).
Secondary locations. Setting displays
on an endcap can increase potato sales by
2.2 percent. Since these locations are highly
visible, it is no surprise that these are great
spots to feature spuds. If potato secondaries
are set up, locating them next to onions will
increase sales by 4.1 percent. Like main
potato sections, secondaries located next to
sweet potatoes bring down potato sales by
3.7 percent.
Grocery retail has become exceedingly
competitive over the last two years. As
retailers strive to advance, they are looking
more closely at the products they carry and
the companies that provide them.
According to Progressive Grocer's annual
report for 2017, produce and meat were tied
as the two most influential areas of the store
for driving future growth. On average, 21
percent of consumers say that the produce
department defines their retail experience.
In fact, produce is the most successful
department in generating sales according to
the same report, with 65.7 percent of people
purchasing an item when they visit the
produce section.
As we move forward in this competitive
environment, it is important we continue to
help retailers improve sales of the fresh potato
category. To receive the six-page handout
brochure, email retail@potatoesusa.com.
22
Spudman.com
http://www.Spudman.com
March 2019

Table of Contents for the Digital Edition of March 2019
