Did you know retailers with diverse potatoes sell more potatoes and get a higher everyday price for potatoes? IRI completed a merchandising best practices study, commissioned by Potatoes USA, to help grocery decision-makers across the country optimize their in-store displays for potatoes. The merchandising study revealed top grocery retailers’ key tactics to optimize their assortment, displays and promotions for continued sales growth post-2020.
Assortment
Having the right types of potatoes and pack sizes on the shelf is the building block for any robust potato set. Consumers commonly know russet, red, yellow and white potatoes. When someone buys one of these four types of potatoes, they already know what to do with them. Russet potatoes make up the largest share of potato volume sales and are the base of a potato category. Red, yellow and white potatoes are important categories to be on the shelf. Having these four as a base gives consumers what they are looking for and brings them into the potato category.
Petite, medley and purple potatoes drive trial and diversity for consumers and higher sales for retailers. Even though these make up a much smaller share, they are key for growth in any potato set.
As for pack sizes, the study identified recommendations based on the assortment of top-performing retailers. About two-thirds of fresh potatoes should be made up of bags under 10 pounds, and only 8% should be 10-pound bags or larger. The bulk category should make up 24%. There are more specific recommendations on assortment in the Fresh Potato Merchandising Best Practices Guide available from Potatoes USA, but this offers a strong base.
Display
Fresh potato shelving comes in four different types: bins, cardboard boxes, vertical shelving and tables. Top-performing retailers are using various types of shelving and are creating unique and interesting potato displays for their consumers.
Signage for potatoes is also very important and consists of marketing and price signs. Marketing signs hang above the potato displays, marking the category and helping consumers easily find what they are looking for. The second type of sign is price tags. Consumers will not buy fresh potatoes if they do not know the cost, whether full price or discounted. Utilizing both types of signage, with an even split, leads to growth for top-performing retailers. Too many price signs have the opposite effect on sales.
Promotions
Promotion means more than just discounting a product; it also entails highlighting potato types to attract more consumers. With 76% of consumers purchasing full-priced potatoes, promotional dollars can be used more strategically to add growth. Top-performing retailers are using their promotional discount dollars by highlighting the lesser-known potatoes. For example, they are discounting a petite potato slightly, which is drawing in more consumers. When consumers are coming in for the growth drivers, they pick up one commonly known (russet, red, yellow or white) potato as well.
Thinking about the time of year consumers increase potato purchases also helps plan better discount dollars. Top-performing retailers use discount dollars during months like July when potato sales are lower, and highlight them in circulars during the holidays. This reminds consumers about potatoes during the holidays and brings new sales when generally lower. Not only are top-performing retailers selling more potatoes by using promotions in this way; they are also getting higher average everyday prices.
Incrementality
Incrementality refers to new fresh potato items in various pack sizes that add additional sales to an already high-performing category. The top 10 SKUs adding incremental value to the fresh potato category are all 5-pound or smaller bags, including petite, red, yellow and russet potatoes. Value-added items are also adding incremental value. Value-added means potato SKUs that take a step away for the end consumer. They are either already seasoned, come in a container that can be cooked in, or do not require additional steps such as chopping. This shows that consumers are looking for diversity with their potatoes and dishes in home kitchens.
Variety and diversity are vital to being a top-performing potato grocery retailer. Knowing how to set up a proper display of potatoes and how to promote them can add additional value to the end consumer and additional sales for retailers. Who knew more opportunities existed for sales of the top volume-driving commodity for grocery stores nationwide?
Find additional insights in Potatoes USA’s Fresh Potato Merchandising Best Practices Guide at www.potatoretailer.com, or email retail@potatoesusa.com.