November/December 2021 - 40

Potato sales strong in marketing year 2020-21
Forty percent of
The marketing
POTATOES USA
John Toaspern
Chief Marketing
Officer
year that ended
in June 2021 was
unlike any year the
potato industry has
ever experienced.
Starting in July 2020,
pandemic restrictions
were in full force,
which led to greatly
reduced sales at
foodservice, and in
turn, reductions in
contract acreage
by the frozen processors. Retail purchases
remained extremely strong, though after the
initial wave of panic buying was over, shelves
were once again relatively full.
As the year progressed, restrictions started
to lift, particularly in the spring of 2021 as
vaccinations became fully available. At this
time, foodservice demand began to return,
especially at quick-service restaurants and
other takeout and delivery formats. Retail sales
remained well above 2019 but were not at the
extremes of the March-June 2020 timeframe.
To help the industry understand the
demand for domestically produced potatoes
and better understand the sales in the
domestic market, Potatoes USA conducts
an annual sales and utilization study. This
study uses retail data from IRI, estimated
foodservice sales from Technomics, and
import and export data to provide additional
clarity of domestically produced potatoes.
The results showed an overall decline of
U.S. potato use for the July 2020-June 2021
marketing year. To be more specific, there was
a 6% decrease in the fresh weight equivalent
volume. This decrease was due to an 8%
decline in sales to foodservice and the leveling
of retail sales from the peak panic buying
at the end of the previous marketing year.
This year's tight supplies of U.S. potatoes,
particularly frozen products, were made up for
with a 12% increase in total imports.
Despite the uncertainties in the
international markets and the extreme
problems with international shipping,
U.S. potato exports increased 4% for the
marketing year. The rebound in exports was
led by a 9% increase in fresh potatoes, a
10% increase in potato chips, and a 2%
increase in frozen exports, which accounted
for 51% of the total. The only product to
decline was dehydrated potatoes, down 4%.
U.S. grown potatoes
were used for frozen
processing.
Forty percent of U.S. grown potatoes
were used for frozen processing, followed
by fresh processing at 25%, chip processing
at 23%, and dehydrated processing at 7%.
Production of dehydrated potatoes suffered
from tight raw product supplies and serious
labor issues at the plants.
Looking at sales of potatoes in the
domestic market - which is comprised of
domestically produced potatoes as well as
imports - retail sales are up compared to
three and five years ago, but the declines
at foodservice were too great to overcome.
For the past 20 years, the trend has been
for more and more sales to go through
foodservice compared to retail. This trend
has been reversed the past two years, but
it is expected that foodservice will begin to
account for an ever-greater share, though
not right away.
Total sales at retail were down less than
1%, primarily caused by a 2% drop in fresh
potatoes and chips, as sales in the spring of
2021 did not meet the extreme sales during
the panic buying in the spring of 2020.
Positively impacting this were sales of frozen
products, up 5%, and sales of refrigerated
products, up 5%.
Foodservice had an 8% decline in total
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sales, but frozen potato sales were only
down 4%, because the quick-service
restaurant sector was able to recover the
fastest as consumers continued to order
fries as a takeout item. Fresh potato sales
were down 11% as full-service restaurants
have suffered greatly from restrictions and
now labor shortages. Chip sales were down
19% as the beyond restaurant sector had
the largest decline overall and loose chips
from large bags were replaced by the singleserving
bags, which contain less volume.
While markets are settling into a new
normal, it is very important to remember
that demand for potatoes remains strong,
and potatoes are the No. 1 vegetable at
retail, the top side dish at restaurants and
America's favorite vegetable.
38
Spudman.com
http://www.albertapotatoes.ca http://www.Spudman.com
November/December 2021

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