From a general standpoint, the strategy behind value-added potatoes is really very simple, said Tony Amstad, president of Sherwood, Ore.-based Amstad Produce Inc.
“The more value-added you have, the more you’re going to move,” he said. “Value-added is getting to be more of a marketing tool altogether. It’s like, we’re into these wrapped microweavable bakers and we’re doing quite well on them.”
Whether a shipper offers single, wrapped microwavable spuds or special consumer packs, the value-added category is important to his or her bottom line, said Dan Strebin, owner of Troutdale, Ore.-based Strebin Farms.
“It’s one avenue that does generate value back to the product and to the grower eventually,” he said. “It’s all driven by the packinghouses and the customers and what the demands are. There are some people who have done some very good things — the mini-potatoes out here are a good strong market that’s growing.”
Growth of the category has been measured but noticeable.
“If a russet potato is moving in a retailer’s warehouse a truckload a day and the reds are moving a third and the whites and the yellows are moving a third of a truckload a day, the specialties are moving a half a pallet a day,” he said. “But it’s better than the 10 boxes a day they started with.”
Adding value also means adding to the retail price of the product, Strebin said.
“But it fits a niche in today’s society for those that are looking for a quick meal,” he said.
However, certain times can bring challenges to the category, said some shippers, who noted the higher price also can be an obstacle in a tougher economic climate, such as has been the case over the last couple of years.
“I think what we’re seeing right now, with the economy kind of iffy, there’s still a little resistance by customers to find your consumers to spend more,” said Les Alderete, director of production and grower development with Raleigh, N.C.-based L&M Cos. “I think your value-added and your fingerlings have a small niche market and will probably rebound as the economy strengthens, but in the short term, with the economy kind of iffy and stuff, I think it’ll just be kind of like last year.”
Shippers believe in the long-term viability of the category, though, said Larry Sieg, Washington sales manager in the Pasco, Wash., office of Idaho Falls, Idaho-based Potandon Produce LLC.
“I’m sure it can be overdone also, but it’s been a good solid business — not a fast growth but slow growth,” he said.
Price can be a sensitive issue with the category when consumers are spending more of their ready cash on fuel and other day-to-day necessities, said Cliff Corwin, marketing and sales manager, Skagit Valley’s Best Produce Inc., Mount Vernon, Wash.
“I think it’s all hinging on the retail price,” he said. “Those tend to be more expensive than a 10-pound bag for a smaller amount.”
Not everybody agreed that the category is suffering, though.
“I think all these niche areas are gaining,” said Allen Floyd, president of Othello, Wash.-based Harvest Fresh Produce Inc. “We’re holding our own.”