The weak economy has more people eating at home, which means restaurants are buying and serving fewer potatoes.
“Our fresh potato sales on the foodservice side are down about 8% this year,” said Steve Grinstead, president and chief executive officer of Monterey, Calif.-based foodservice distributor Pro*Act.
Grinstead said casual dining and fine dining operations traditionally have been strong users of potatoes.
However, both segments of the restaurant industry have seen sales slide during a recession that has lasted more than a year.
Grinstead said high potato prices for the 2008 crop drove some restaurant groups to move to other options, including other vegetable offerings in addition to, or instead of, fresh potatoes.
Tom Sirna, president of Ravenna, Ohio-based foodservice distributor Sirna & Sons Produce, said he has seen a couple of large, multi-unit restaurant groups switch to frozen or processed potatoes to cut costs.
Cost isn’t the only issue, however. Grinstead said that as more ethnic dishes are developed, potatoes often are not the primary side items for those dishes.
“Other sides that seem to be making inroads on potatoes are sweet potatoes and risotto,” he said.
“Potatoes are still a huge product in the foodservice sector and will continue to be even though other products are moving in on their action.”
There is some good news for those in the spud business. Grinstead and others say that the foodservice decline has subsided, and there is optimism for the future.
“It will most likely be a slow recovery,” he said, “but seems to be moving in the right direction.”
The hole the restaurant industry is trying to dig out of is a big one.
The National Restaurant Association reported Oct. 30 that its Restaurant Performance Index — a monthly composite index that tracks the health and outlook of the industry — stood at 97.5 in September, down slightly from August and its 23rd consecutive month below 100.
Index values above 100 indicate that key industry indicators are in a period of expansion, while values below 100 represent contraction.
Maureen Ryan, media relations manager for the Washington, D.C.-based National Restaurant Association, said 2008 and 2009 have been the most challenging period for the restaurant industry in decades.
“The national economy is expected to improve in 2010, and so the restaurant industry is cautiously optimistic about the coming year — 2010 will be the best year of the past three for the industry across all segments,” she said.
“However, there will be only modest growth. The environment will remain competitive, and restaurants will continue to offer specials and value pricing to drive traffic.”
“What we’re seeing is that foodservice is starting to bottom out,” said Jim Richter, executive vice president of sales and marketing for Rexburg, Idaho-based Wilcox Fresh.
“I think you’ll see it turn around and get better in 2010. We’re not through the recession, but I think it will get better. People are starting to eat out more.”
Richter said he expects the trend toward dining at home to continue though the holidays as families try to save money.
“Retail is enjoying the trend toward dining at home, especially for the holidays,” he said. “In the past in a stronger economy a family might have chosen to go out to eat. Once we get into the first quarter, dining trends should come back up.”
Not everyone is feeling the pinch of the foodservice slump.
“We have heard that foodservice sales are down, but we are not seeing that,” said Mike Carter, chief executive officer of Bushmans’ Inc., Rosholt, Wis. “Our customers are still ordering cartons at a level pace.”