Convenience continues to drive the UK potato retail market, with growth in pre-packed, processed and premium lines dominating loose variations in both volume and value.
These are the findings from research carried out by the Potato Council Research Advice Service for Crops. The service gives levy payers the chance to have their retail-related questions answered using independent data and the Potato Council’s own primary research.
“We are providing this service specifically for growers and processors as now more than ever a change in consumer demand can create opportunities for growers,” says Caroline Evans, head of marketing at the Potato Council.
This could include tapping into the rising demand for pre-pack potatoes or segmenting the market with branded, premium varieties.
How has the sector changed in the past five years?
According to the research, the fresh ambient potato market was worth more than £1bn annually to retailers in the past five years, with 96% of the population consuming fresh potatoes.
While the volume of the fresh potato market has fallen by 3.5% over that time, the value has increased by 1.1%.
The crisp market has grown by 39% in value, representing the second largest sector of the total potato market with £882m in retail sales. Frozen chips and frozen potato products take third and fourth places respectively.
Chilled, pre-packed potatoes represent the smallest share of the market with an estimated value of £190m in the past five years, they have also shown the highest growth with volume sales increasing 51.2% and sales value by 46.7%.
“Changes in the market have undeniably reflected increased consumer demand for convenience,” says Colin Boxell, partner at the Oxford partnership, who is working with the Potato Council. “Pre-packed, chilled, prepared, and frozen options fit this profile, which is why they have seen such an increase in demand,” he adds.
How do sales differ between non-branded and branded varieties?
White potatoes outsell their red counterparts by seven to one. The volume of fresh white potatoes sold has increased 5.2% in the past five years while red potato sales have only grown 1.8%. Estima remains the top-selling variety since 2008, making up 14.7% by volume of the fresh category.
“A lot of these are sold as unbranded whites by retailers,” says Mr Boxell. “This suggests a ‘grey middle’ of consumers who are buying potatoes without necessarily understanding variety. They are simply choosing the potato offered to them by retailers.”
How is the market divided between the loose and pre-packed formats?
Data shows 81.6% of the fresh market value comprises pre-packed potatoes, an increase from the 75.1% share pre-packed lines accounted for five years ago.
“In a sense the main competition for potatoes on the shelf are other carbohydrates like rice and pasta,” says Mr Boxell. “They are easy to pick up in store and simple to cook he explains. “Pre-packed potatoes are the same – they are simply easier to shop for, which is why there has been such an increase in demand.”
However, the recent addition to the named category of the branded Rooster variety has seen good growth as well as the introduction of other niche varieties.
Mr Boxell suggests this reflects the potential for more differentiation, drawing consumers from the grey middle into premium brands based on unique selling points including provenance, and variety.
How are potatoes sold through the retailers?
The multiple retailers dominate potato sales, with the top five – Tesco, Sainsbury’s, Asda, Morrisons and the Co-operative – accounting for 82%, by volume, of potatoes sold in the UK. Pressure from the discounters has taken a share of the multiples market, which has meant a 1-2% drop in the domination of the big five.
Independent retailers continue to see both volume and value decline.
* Growers can email consumer or market research questions to email@example.com and the Potato Council will endeavour to respond in five working days using the existing research bank.
‘Fluffy, salad and smooth’ provide new common language to woo shoppers
Under a new initiative, potato growers will be called upon to speak to the public about variation of taste and texture in fresh spuds, rather than just focusing on skin finish.
The Potato Council’s campaign, which aims to engage consumers and inspire their interest in different varieties on the shelf, includes a new way of categorising potatoes at the retail end to make life easier for shoppers when it comes to identifying which potatoes work best for which dish.
After a year’s research, which found that 85% of shoppers wanted to understand more about potatoes, the Potato Council has pinpointed three categories – fluffy, salad and smooth.
According to the Potato Council’s head of marketing, Caroline Evans, the skin finish on many of this season’s spuds are likely to be affected by the weather, so now is a good time to educate consumers about the huge differences in taste and texture of fresh potatoes.
“This strategy will build a stronger connection between consumers and potatoes, educating buyers by highlighting taste and texture with simple, shopper-led signposting,” says Ms Evans.
A common language will provide a clearer understanding of the wide range of varieties and promote consistency across the category, thereby encouraging shoppers to “trade up”, adds Ms Evans.
“This has the potential to drive up the value of the industry. Increasing the average cost per kg paid by the shopper by just 1p would add up to £8.7m over the course of a year. Perhaps more importantly, building a stronger relationship with consumers will help ensure long-term loyalty and demand for potatoes,” she says.
Social media, interacting with schools and working directly with the consumer are all ways growers can increase buyer knowledge of the potato industry, according to Ms Evans. “Working together as an industry we can show consumers that there is more to potatoes than meets the eye,” she says.
Spuds in the spotlight
Potato week is organised by the Potato Council and runs from 1-7 October. This year the Potato Council will use it as a launchpad for consumer-focused activity with a nationwide advertising campaign set to reach an audience of 10m, supported by more than 100 regional sampling days, 500,000 leaflets and a strong online presence.
“Potato Week is a platform for the whole industry to get behind the campaign and drive home a clear and consistent message – that consumers do more than just appreciate the look of the product and think about texture and taste,” says Ms Evans.