Development of a universal grading

system for ware potatoes in Western

Australia

Deborah Pitter Business Today

Project Number: PT02051

PT02051 This report is published by Horticulture Australia Ltd to pass on information concerning horticultural research and development undertaken for the potato industry. The research contained in this report was funded by Horticulture Australia Ltd with the financial support of Western Potatoes. All expressions of opinion are not to be regarded as expressing the opinion of Horticulture Australia Ltd or any authority of the Australian Government. The Company and the Australian Government accept no responsibility for any of the opinions or the accuracy of the information contained in this report and readers should rely upon their own enquiries in making decisions concerning their own interests. ISBN 0 7341 0892 3 Published and distributed by: Horticultural Australia Ltd Level 1 50 Carrington Street Sydney NSW 2000 Telephone: (02) 8295 2300 Fax: (02) 8295 2399 E-Mail: horticulture@horticulture.com.au © Copyright 2004

Project Number PT02051 (15 April 2004)

DEVELOPMENT OF A UNIVERSAL GRADING SYSTEM FOR WARE POTATOES IN WESTERN AUSTRALIA

Report Written By: Helen Plange (Western Potatoes)

Michelle Godley (Business Today)

Research Provider: Western Potatoes

Project Number: PT02051 Project Leaders: Helen Plange Western Potatoes PO Box 62, South Fremantle, WA, 6162 Michelle Godley Business Today PO Box 1721, Subiaco, WA, 6904 Project Team: Western Australian Ware Potato Industry Supply Chain

Group Purpose of Report: The primary aim of this project was to develop a

uniform grading system for the fresh potato market in Western Australia based on current retailer specifications. Given that the industry for domestic ware potatoes is regulated in Western Australia, a uniform grading standard was considered a priority to enable the industry to work together to better meet consumer demand.

Date of Report: 15 April 2004 Funding Source: This project was funded through a voluntary

contribution from Western Potatoes and matched dollar for dollar by Horticulture Australia.

Any recommendations contained in this publication do not necessarily represent current Horticulture Australia policy. No person should act on the basis of the contents of this publication, whether as to matters of fact or opinion or other content, without first obtaining specific, independent professional advice in respect of the matters set out in this publication.

- 1 -

CONTENTS

1.0 MEDIA SUMMARY.............................................................................................. 2

2.0 INTRODUCTION .................................................................................................. 3 2.1 THE STRUCTURE OF THE POTATO INDUSTRY IN WESTERN AUSTRALIA .................3 2.2 SUPPLY CHAIN DYNAMICS .................................................................................................5 2.3 RESEARCH FINDINGS ...........................................................................................................6 2.4 GRADING PROJECT OBJECTIVES........................................................................................8

3.0 MATERIALS AND METHODS......................................................................... 11 3.1 STAGE ONE – AUDIT AND RESEARCH FINDINGS.........................................................11

Summary of Findings from the International Review..........................................11 Summary of Findings from the National Review ..................................................12 Summary of Findings from the Western Australian Review ..............................13 Summary of Findings from Other Australian Horticultural Industries..........13 Application of the Findings to the Grading Project.............................................14

3.2 STAGE TWO – DEVELOPING A FRAMEWORK AND DRAFT GRADING STANDARD15

Size Classification ..........................................................................................................15 Quality Classification ...................................................................................................15 Draft Grading Standard ...............................................................................................17

3.3 STAGE THREE – WASHPACKER TRIALS AND FINALISATION OF THE GRADING

STANDARD............................................................................................................................20 Major Findings from the Washpacker Trials.........................................................20 Finalisation of the Grading Standard ......................................................................21 Grading Poster................................................................................................................21 Brochure ...........................................................................................................................22

3.4 STAGE FOUR – COMMUNICATION AND DISSEMINATION OF THE GRADING

STANDARD TO INDUSTRY STAKEHOLDERS...................................................................23 Regular Ongoing Communication.............................................................................23 Communication of the Grading Standard to All Industry Stakeholders.........23 Changes to Formal Documentation..........................................................................24

4.0 DISCUSSION........................................................................................................ 25

5.0 RECOMMENDATION ....................................................................................... 26

6.0 ACKNOWLEDGMENTS.................................................................................... 27

7.0 BIBLIOGRAPHY ................................................................................................ 28

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1.0 MEDIA SUMMARY The domestic ware potato market in Western Australia operates under a regulated system administered by Western Potatoes. Coordination and effective communication between the various sectors in the supply chain is of paramount importance. The industry understands the importance of working towards a common goal to ensure delivery of a high quality product that satisfies consumer requirements. Over a series of supply chain workshops chaired by Western Potatoes, the industry identified a number of key areas needing to be addressed to ensure the long-term sustainability of the industry. The area given the highest level of priority by all supply chain members was the development of a universal grading standard for ware potatoes. The introduction of a universal grading standard provides the industry with: • One point of reference based on retailer specifications to which all sectors in the

industry can refer • A descriptive and pictorial example of potato defects acceptable for each grade to aid

the grading process and limit discrepancies in interpretation • A clear indication of what is expected by the majority of retailers in regards to size

and quality • Consistent terminology used by different supply chain members in the industry. The universal grading standard supports the requirements of all industry quality assurance programs and in addition will be incorporated into the ‘list of criteria’ for the development of new potato varieties for the Western Australian domestic ware market. The project was undertaken in four stages over a period of twelve months with representative participation from all sectors of the supply chain (retailers, washpackers, Western Potatoes and growers). A new grading standard for ware potatoes was developed and presented in the format of a colour poster and brochure distributed to all industry participants. Four new grades were created by the grading standard (Smalls, Class 1, Class 2 and Drybrush). These grades were developed taking into consideration size and quality parameters. The grading standard will be officially launched at the start of the new growing season, 1 July 2004. From this date, packout documents and grower payments will be changed to reflect the new standard. The standard will be monitored closely over the first 12 months of operation with the intention that the standard may be modified as retailer specifications are updated to meet changing consumer requirements.

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2.0 INTRODUCTION 2.1 The Structure of the Potato Industry in Western Australia

The Western Australian potato market is essentially made up of three sectors, namely:

(a) domestic ware (fresh) potato market – regulated by the Marketing of Potatoes Act (1946) and Regulations (1987);

(b) export market for ware and seed potatoes – not regulated except for registration of plantings; and

(c) processed potatoes for the domestic and export market – not regulated except for registration of plantings.

The export and processing markets are deregulated. Growers are free to grow for these markets; however, they require a licence from Western Potatoes to do so. The licence allows for production monitoring and prevents potatoes grown for these markets from entering the domestic market. The domestic ware potato market in Western Australia operates under a regulated system which is administered by Western Potatoes (otherwise known as The Potato Marketing Corporation of Western Australia). Western Potatoes is the only remaining statutory marketing organisation for potatoes in Australia. It came into operation in October 1948, having been established under the Marketing of Potatoes Act (1946). Western Potatoes provides leadership to all stakeholders in the supply chain in order to build and maintain an efficient, profitable and sustainable industry that is responsive to market needs. All potato production for the domestic fresh market is regulated through a licensing system which manages the acreage of potatoes planted, the growing season for different areas, and the delivery time for growers to supply potatoes to washpackers. The regulated system aims to align supply within 5 per cent of the anticipated demand. This minimises the waste of resources that may otherwise result if overproduction occurred and aims at providing consumers with fresh potatoes all year round. Approximately 50,000 tonnes of potatoes are grown annually for the domestic ware market. There are approximately 110 potato-growing families in Western Australia located mainly in the south-western corner of the state. The major production districts are Manjimup, Pemberton, Busselton, Myalup, Gingin, Donnybrook and the Metropolitan region (refer to Figure 1).

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Figure 1: Potato-growing areas in Western Australia The spread of potato production allows fresh supply to the domestic market throughout the entire year. Each growing season is divided into seven Pools (see Table 1). Table 1: Production growing areas by Pool Pool Season 2003–2004 Districts

1 01 July–30 August Busselton, Myalup, Metro, Gingin

2 31 August–11 October Busselton, Myalup, Metro, Gingin, Manjimup

3 12 October–15 November Metro, Myalup, Busselton, Gingin

4 16 November–27 December Busselton, Myalup, Donnybrook, Metro

5 28 December–13 March Manjimup, Pemberton

6 14 March–08 May Manjimup, Pemberton, Albany, Busselton, Donnybrook

7 09 May–30 June Busselton, Myalup, Donnybrook, Manjimup, Pemberton

Albany

Perth (Metro)

Manjimup

Myalup Busselton

Donnybrook

Gingin

Pemberton

- 5 -

2.2 Supply Chain Dynamics The supply chain involves additional members compared to that of a deregulated market.

Growers

Western Potatoes

Washpackers

Retailers

Consumers There are four washpacking operations registered with Western Potatoes, three operating in the Perth metropolitan area and one operating in Pemberton. 1. Beta Spuds 2. Aldwich Holdings 3. Pemberton Washpacking Company 4. Galati Nominees Growers supply unwashed potatoes to a registered washpacker of their choice. The washpackers are responsible for washing and grading the potatoes in accordance with grading requirements. Waste and soil are removed during this process. The washpacker then completes a packout document which provides weight details for each grade, soil and waste. Western Australia was the first state in Australia to introduce washing of potatoes for retail sale. A strong preference for washed potatoes has followed, accounting for approximately 95 per cent of retail sales. The washpacker pays Western Potatoes according to each grade detailed in the packout document. Western Potatoes in turn pays the grower, less the Corporation’s operating costs, through a series of progressive payments called first, interim, second and final payment. Once the potatoes are graded and packed, the washpackers sell the potatoes to market wholesalers and retail outlets. Neither growers nor Western Potatoes have a direct supply relationship with retailers. Given the nature of this supply chain structure, it is crucial that each sector of the supply chain works towards the common goal of delivering a high quality product that satisfies consumer requirements. Although the production for ware potatoes is regulated in Western Australia, Eastern States potatoes can be imported into the state if they meet Western Australian quarantine requirements. The local industry needs to ensure they remain competitive on both price and quality.

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2.3 Research Findings Each year an annual tracking survey is conducted on behalf of Western Potatoes by Market Equity, an independent market research firm. The tracking survey monitors consumer perceptions and behaviour in relation to ware potatoes in Western Australia. The research indicates that over half of Western Australian consumers purchase potatoes weekly or more often, with the majority of these purchases occurring at major supermarkets. Loose purchases dominate the method of purchase with 55 per cent of consumers choosing to only purchase potatoes from loosefill displays1. More than 85 per cent of Western Australian grocery buyers state the appearance of potatoes has an influence on their purchase decision. In fact, when asked what the most important influence was, appearance rated higher than any other factor. Furthermore, grocery buyers judge the quality of potatoes mainly by the ‘marks on the skin’. To continue to effectively address the purchasing needs of consumers in Western Australia there was a need for the industry to move from being product driven to market orientated. FROM TO Growers Consumers Western Potatoes Retailers Washpackers Washpackers Retailers Western Potatoes Consumers Growers

1 Market Equity (2003) Western Potatoes Consumer Behaviour Monitor, unpublished.

Com

mun

icat

ion

and

Pro

duct

ion

Flow

Com

mun

icat

ion

Flow

Pro

duct

ion

Flow

- 7 -

Based on the need to create a framework that complements and benefits all industry participants, a series of workshops were held with representation from all sectors of the supply chain to identify issues needing to be addressed. There was unanimous agreement that further progress in addressing issues relating to the supply chain was limited by the different interpretations and systems for grading potatoes. It was felt this led to confusion and misunderstanding and limited the ability of growers to receive meaningful feedback from consumers. Furthermore, the legislation (The Marketing of Potatoes Regulations (1987) Part V1) requires that the industry documents grading specifications, taking into consideration the following: • the condition in which ware potatoes must be delivered in order for the delivery not to

be refused; and • requirements that ware potatoes must meet to be graded in any particular class. These

requirements include size, quality, tolerances permitted and packaging. Under Section 53 of the Marketing of Potatoes Regulations (1987) Part VI, the following information must be found on the packaging of all packaged or repackaged potatoes: • name of the variety; • class and size or size range; • net mass of potatoes in the package; • name or code of the packer of the potatoes; and • date on which the package was packed. The first priority of the supply chain group was to establish a universal grading standard for potatoes in Western Australia.

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2.4 Grading Project Objectives

To create a uniform standard based on retailer specifications to which all sectors in the industry can refer The major supermarket chains (Coles, Woolworths and Foodland Associated Limited) capture over 70 per cent of the market for ware potatoes within Western Australia1 (refer to Figure 2). These retailers exert a strong influence over the marketing of potatoes and generally contract with more than one potato washpacking operation. It is therefore critical that the industry delivers potatoes which satisfy their purchasing needs.

Most Frequent Place of Purchase

22%21%

16%15%

9%8%

5%4%

0%

5%

10%

15%

20%

25%

Coles Woolworths Action* SpecialityFruit and Veg

Stores

Markets Dewsons* Other Supa Valu*

Source: Market Equity (2003) Consumer Behaviour Study Note: * Stores owned or supported by Foodland Associated Limited

Per

cent

age

of G

roce

ry S

hopp

ers

Figure 2: Most frequent place of purchase Most, if not all, of these supermarket chains have developed detailed product specifications outlining their purchase criteria. These documents are confidential and only available to direct suppliers (for the purpose of this project, the supply chain group were provided access to specifications from all participating retailers). In summary, the specifications include details for each grade and/or variety such as the acceptable size range, shape and visual appearance. Visual appearance is often classified into major and minor quality defects. If a product supplied does not meet these specifications (for whatever reason) it will not be accepted for sale and retailers will seek alternative sources of supply.

To provide a pictorial and descriptive example of defects acceptable for each grade to aid the grading process and limit discrepancies in interpretation The grading process has not been reviewed for some time. Previous attempts to document a grading standard in Western Australia have only provided a descriptive example of the

- 9 -

quality and size requirements for each grade. This created misunderstanding and confusion among industry participants. Tracking research has shown the appearance of potatoes is a particularly important factor in the purchase decision of Western Australian consumers. To ensure continual feedback is communicated throughout the entire supply chain, it was thought appropriate to include pictorial examples of each defect to support the accompanying description, thus guaranteeing commonality in understanding and little room for interpretation.

Provide growers with a clear indication of what is expected by the majority of retailers in regards to size and quality Due to the nature of the supply chain, ware potato growers do not liaise directly with retailers and, as such, do not have access to their detailed product specifications or requirements. It is often difficult for the washpackers to provide growers with consistent feedback of what is expected as they sell potatoes to a number of different retailers, each with their own requirements. The grading standard will summarise all of retailer specifications into one document and provide a central reference point for communication.

Provide consistent terminology for the industry to reduce the number of different terms used for what is generally considered the same quality/grade The flow of communication between supply chain sectors is burdened by the number of different descriptive terms used to explain the same grade or class of ware potato. This is further complicated by the different brand names (descriptive language) used at the retail level. The official names of the grades identified on the packout documents prior to the introduction of the new grading standard were Premium, Class 2, Class 1, Smalls and Drybrush. Below are some examples of some of the different terms used for these grades: • Class 2, often referred to as Class 2, Plain Grade, Mixed or Seconds • Class 1, often referred to as Class 1, Select, Premium or Select Number 1 • Smalls, often referred to as Smalls, Gourmets, Chats, Cocktails or Baby Potatoes

Develop a universal grading standard which will be adopted into all industry quality assurance programs All four of the Western Australian licensed washpackers have quality assurance certification and over 75 per cent of the total ware potato production in Western Australia comes from SQF certified growers. As part of all quality assurance programs, all producers and processors must have supply specifications which clearly define the customer requirements. The new grading standard will document the size and minimum quality acceptable for all ware potatoes sold in Western Australia and will be used by potato washpackers as the primary specification when grading washed or drybrushed potatoes.

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In order to maintain quality assurance certification, washpackers must demonstrate to customers and quality auditors that they are consistently grading to this standard.

To develop a new grading standard which will be incorporated into the list of criteria used for the development of new potato varieties for the Western Australian domestic ware market The Potato Variety Commercialisation Group, by combining the collaborative efforts of the Department of Agriculture Western Australia and Western Potatoes, conducts trials and evaluation of new potato varieties which show potential to be successfully grown in Western Australia for the domestic ware market. New varieties continue to be trialled in the various growing regions and are accepted for semi-commercialisation if they show a clear advantage over existing varieties. To assist in the evaluation process of potential varieties, the Potato Variety Commercialisation Group formulated a minimum entry criteria checklist that combines the necessary key requirements for consumer acceptability and sound agricultural characteristics. As the new grading standard is a reflection of current retailer requirements, it will be used to reinforce the importance of the checklist.

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3.0 MATERIALS AND METHODS The outcomes of this project affect all industry stakeholders so a strong focus from the beginning was the development of industry cohesion that would in turn result in ownership of the process and outcome and help in successfully implementing the change. A four-stage approach was used to complete this project: • Stage One – Audit and Research Findings • Stage Two – Developing a Framework and Draft Grading Standard • Stage Three – Washpacker Trials and Finalisation of the Grading Standard • Stage Four – Communication and Dissemination of the Grading Standard to Industry

Stakeholders 3.1 Stage One – Audit and Research Findings The objective of the audit was to identify the various forms of grading standards in other potato industries and their potential applicability for the Western Australian ware potato industry. The review was conducted over several months in three different phases taking into consideration an international, national and local perspective. The presentation and format of grading practices in other horticultural industries were also examined to determine if there were any suitable aspects (style, application and format of presentation) which may be incorporated into the standard designed for the Western Australian potato industry. Due to the confidential and commercially sensitive nature of some of the findings in the audit review stage, this document does not report on individual cases. However, a broad summary of each phase is included.

Summary of Findings from the International Review A comprehensive internet search was undertaken with the assistance of the Potato Internet Starter Pak 2002, Version 42. The Internet Starter Pak provided a detailed listing of hundreds of potato sites around the world which were all accessed for evidence of grading information. The internet search was further reduced to a core number of potato producing countries including South Africa, New Zealand, Great Britain, Ireland, Canada and North America. A brief summary of the main findings are below: • Standards tended to focus on meeting consumer requirements and steered away from

being production driven.

2 Walters. L.J. (2002) Potato Internet Starter Pak (Version 4).

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• Food safety stood out as a major focus with many incorporating food safety requirements into their grading specifications. Ireland introduced new food standard regulations in 2003 to control grading and labelling practices.

• South Africa has established a company called PROKON (‘Product Control for

Agriculture’). The purpose of this company is to maintain product quality for the benefit of all supply chain members.

• New Zealand implemented the New Zealand Fresh Produce Approved Supplier

Program to address consumer concerns relating to food safety and quality. The program requires participants to document all customer product specifications and have clear procedures for control of non-conforming product.

• The search did not reveal any grading standards for potatoes that provided both a

descriptive and pictorial example of the grades defined by the standard. • An official grading standard for ware potatoes was developed by the US Department

of Agriculture (USDA), to provide the North American potato industry with common language for buying and selling.

• The Canada Agricultural Products Act and Regulations provides a detailed

description of the grades and standards used for potatoes in Canada.

Summary of Findings from the National Review An initial list of contacts was established with the help of the National Technology Transfer Manager for Potatoes, Leigh Walters. Numerous telephone interviews were completed with representatives of each sector of the potato industry including washpackers, retailers, growers, quality assurance organisations and Government representatives. A brief summary of the main findings are below: • A Product Description Language (PDL)3 was developed in 1999 to provide a pictorial

language to describe potato defects. It does not, however, specify product standards. • A number of washpackers still continue to use the old grading and labelling

requirements published by the NSW Agriculture Department in 1991. • The major supermarket chains each have their own national product specifications

which are provided to suppliers. • There is little evidence of formal, documented grading standards in other states of

Australia. Many washpackers tend to use the retailer specifications as their main guide. Quality varies considerably between washpackers based on end customer requirements.

3 Henderson, A. & Bennett, R. (1999) Product Description Language Potatoes. ExpHORT 2000 Publication No. 71. Agriculture Victoria.

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• The market consists of a large volume of both washed and drybrushed potatoes. • Terminology of grades varies between supply chain sectors and within the different

states. Summary of Findings from the Western Australian Review The Western Australian review involved a series of visits to washpackers to monitor their packing and grading operations and discussions with retailers to identify consumer requirements. The annual tracking research was also used to provide background information on purchase and consumer behaviour of consumers. A summary of the main findings are below: • Grading of product is determined by two factors: quality and size. This is reflected

by the two-stage grading process. Class 2 and waste are initially graded out (by defect) prior to any further grading of the remaining potatoes which is then influenced by size.

• Washed potatoes dominate the marketplace. Drybrush potatoes only account for

approximately 5 per cent of sales. • A heavy focus is placed on the importance of quality assurance programs. • There is significant discrepancy in the terminology used throughout supply chain. • The grades and size ranges recorded on packout documents are not necessarily the

same break-up of grades which are sold at retail level. This is in large part due to the discrepancy in terminology and makes it difficult for growers to receive meaningful consumer feedback.

• Washpackers pack potatoes into their own bags and into retailer branded bags. • The industry is governed by the Marketing of Potatoes Act (1946) and Regulations

(1987) which are administered by Western Potatoes. • Consumers purchasing habits are heavily influenced by the appearance of potatoes.

Summary of Findings from Other Australian Horticultural Industries • Queensland’s Tableland Economic Development Corporation has developed pictorial

grading guide posters for mangoes, lychees, limes and avocados to help growers maintain quality standards.

• The Australian Mushroom Growers Association and the Pineapple Industry

Association have both developed a pictorial grading guide in the format of a poster. • The majority of other Australian horticultural industries had grading standards which

consist of only two grades (Class 1, Class 2).

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Application of the Findings to the Grading Project The findings from the review process identified additional areas for consideration in the development of a new grading standard for Western Australia, including the following: • Identified the need for a two-tiered grading standard based on size and quality. • Identified the need to develop a standard which encompasses the specifications of the

major retail chains. • Identified the need to develop a grading standard which is easily understood by all

industry participants and simple to implement from an operational point of view. • Identified the need to ensure all industry participants are involved in the process

through to implementation. • Identified the need to ensure the new grading standard will address the different

grading capabilities of each washpacker. In summary, the findings reinforced to the supply chain group that the new grading standard must be: • specific; • measurable; • achievable; • negotiated; and • communicated.

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3.2 Stage Two – Developing a Framework and Draft Grading Standard Initially, it was assumed that the supply chain group would conduct a number of industry workshops to further develop the results from the preliminary review findings. However, during the initial stage of the project, it became apparent that some of the information gathered in the review from various parties in the supply chain was commercially sensitive to other sectors. Therefore, a smaller core working committee was formed to summarise the review findings and develop a draft model for industry comment and discussion. Taking into consideration the findings from the review stage, the core working committee commenced Stage Two by determining the size and quality parameters to be included in the draft grading standard.

Size Classification Retail specifications demonstrated that a majority of ware potatoes sold in Western Australia ranged from 30 g up to approximately 350 g in size. Potatoes greater than 350 g tend to be sold into the food service market and to small independent retailers. The supply chain group, therefore, needed to identify the core size ranges within these limits. The different grades and weight ranges of all potatoes (loose and packaged) available to Western Australian consumers were mapped onto one chart. The chart enabled the group to then identify any distinctive patterns in the size breakdown of product sold. The results from the chart clearly indicated that size could be split into three broad categories (small, medium and large). These categories were then documented for inclusion into the draft standard.

Quality Classification The Product Description Language (PDL) developed for potatoes by Andrew Henderson and Richard Bennett in 19993 provided the group with a primary reference point to describe the key quality parameters to be included in the draft standard. Using the PDL, quality defects were divided into three categories: defects of growth; defects of pests and diseases; and defects of handling and storage. The defects within each category were then further classified according to their saleability based on the current retailer specifications.

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Table 2: Potato defects not considered saleable Growth Defects Pests and Diseases Handling and Storage Defects

Hollow Heart Soft Rot Local Greening Black Heart Dry Rot Paddock Greening

Brown Fleck Phoma Rot Sprouting

Stem-end Browning Pink Rot Shrivelling

Infected Lenticels Stem-end Rot Insect Damage Eelworm Potato Moth Potato Wireworm White Fringed Weevil Defects not considered saleable are to be immediately classified as waste in the grading process. Table 3: Potato defects considered saleable

Growth Defects Pests and Diseases Handling and Storage Defects

Secondary Growth Scab – Common

Mechanical Damage (including Cuts, Bruising and Splitting)

Malformation Scab – Powdery

Rodent and Bird Damage

Enlarged/Dirty Lenticels Beetle Damage

Skinning

Growth Cracks (healed) Skin Blemishes – Scurf (including Staining, Black Dot)

Skin Blemishes – Crocodile Skin Rhizoctonia (Black Scurf)

To determine the allowable severity of the defects for each grade, potato defects considered saleable were then split into two levels of acceptability called Defect Level 1 and Defect Level 2. These two levels encompass the quality determined for all grades. A series of photographs showing varying levels of severity of each defect were used as a reference guide by the supply chain group to determine the written descriptions for each defect within Defect Level 1 and Defect Level 2. The group choose the two photographs for each defect which best represented the two levels of defect described for the grades accepted in the retail specifications and then documented exactly what was represented by the photographs. The ultimate objective is to deliver a high quality product that

- 17 -

satisfies consumer demand. The supply chain group felt that in some cases the allowable level of defect should be tighter than that documented in the retailer specifications. In accordance with the PDL and to help ensure the descriptions for each defect were not open to interpretation, the group decided to include for each defect (where appropriate) a reference to the percentage of tuber surface area considered acceptable for Defect Level 1 and Defect Level 2 and whether the defect is acceptable in a scatter formation, a cluster formation or both. Draft Grading Standard Table 4: Grade classification by size and quality

Size Range Defect Level 1 Defect Level 2 Small

30 g – 110 g SMALLS

Medium >110 g – 300 g CLASS 1 CLASS 2, DRYBRUSH

Large >300 g – 450 g CLASS 2, DRYBRUSH

The three size ranges and two defect level classifications were combined into a matrix which clearly identified four grades: 1. Smalls 2. Class 1 3. Class 2 4. Drybrush Table 5: Defects not acceptable for Defect Level 1 or Defect Level 2 Growth Defects Pests and Diseases Handling and Storage Defects

Hollow Heart Soft Rot

Local Greening Black Heart Dry Rot

Paddock Greening

Brown Fleck Phoma Rot Sprouting (includes any initiation of stem growth)

Stem-end Browning Pink Rot Shrivelling (includes flabbiness, shrinkage and sponginess)

Infected Lenticels (includes large, swollen, dark and broken lenticels)

Stem-end Rot

Insect Damage Eelworm Potato Moth Potato Wireworm White Fringed Weevil A description of the minimum acceptable defect level for each grade is detailed in Table 6.

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-

Tab

le 6

: Min

imum

acc

epta

ble

defe

ct le

vel b

y gr

ade

DE

FEC

T

DE

FEC

T L

EV

EL

1

Min

imum

acc

epta

ble

leve

l for

Sm

alls

and

Cla

ss 1

D

EFE

CT

LE

VE

L 2

M

inim

um a

ccep

tabl

e le

vel f

or C

lass

2 a

nd D

rybr

ush

Seco

ndar

y G

row

th

(des

crib

es a

var

iety

of s

hape

ab

norm

aliti

es)

One

smal

l nob

acc

epta

ble

prov

ided

the

pota

to is

still

cha

ract

eris

tic o

f th

e va

riety

shap

e. T

he n

ob m

ust b

e ea

sily

pee

led

(or r

emov

ed) w

ith

one

pass

of a

pee

ler.

One

nob

acc

epta

ble

prov

ided

the

pota

to is

still

cha

ract

eris

tic o

f the

var

iety

sh

ape.

Nob

mus

t be

easi

ly p

eele

d.

Mal

form

atio

n (tu

bers

that

diff

er fr

om th

e st

anda

rd sh

ape

for t

he v

arie

ty

incl

udin

g ro

ot c

onst

rictio

n)

A v

ery

slig

ht fo

rm o

f mal

form

atio

n is

acc

epta

ble

prov

ided

it is

still

ch

arac

teris

tic o

f the

var

iety

shap

e. P

otat

o m

ust b

e ea

sily

pee

led

with

on

e pa

ss o

f a p

eele

r.

Mal

form

atio

n ac

cept

able

pro

vide

d it

is st

ill c

hara

cter

istic

of t

he v

arie

ty

shap

e. P

otat

o m

ust b

e ea

sily

pee

led.

Mec

hani

cal D

amag

e

(incl

udes

cut

s, br

uisi

ng, s

plitt

ing,

cr

acks

, bird

and

rode

nt d

amag

e)

No

mec

hani

cal d

amag

e is

acc

epta

ble.

M

echa

nica

l dam

age

mus

t not

be

deep

er th

an 2

mm

and

no

long

er th

an

15 m

m in

leng

th. W

eepi

ng is

not

acc

epta

ble.

Enl

arge

d/D

irty

Len

ticel

s En

larg

ed/d

irty

lent

icel

s aff

ectin

g up

to 5

per

cen

t of t

he su

rfac

e ar

ea.

Acc

epta

ble

in a

scat

ter f

orm

atio

n on

ly.

Enla

rged

/dirt

y le

ntic

els a

ffec

ting

up to

25

per c

ent o

f the

surf

ace

area

. A

ccep

tabl

e in

a sc

atte

r for

mat

ion

only

.

Scab

– P

owde

ry

Pow

dery

scab

aff

ectin

g up

to 2

per

cen

t of t

he su

rfac

e ar

ea. A

ccep

tabl

e in

a sc

atte

r for

mat

ion

only

. Po

wde

ry sc

ab a

ffec

ting

up to

5 p

er c

ent o

f the

surf

ace

area

. Acc

epta

ble

in

a sc

atte

r for

mat

ion

only

.

Scab

– C

omm

on

No

com

mon

scab

is a

ccep

tabl

e.

Com

mon

scab

mus

t not

be

deep

er th

an 2

mm

and

shou

ld o

nly

affe

ct u

p to

5

per c

ent o

f the

surf

ace

area

. Acc

epta

ble

in a

clu

ster

form

atio

n on

ly.

Bee

tle D

amag

e (in

clud

es A

fric

an b

lack

bee

tle)

No

beet

le d

amag

e is

acc

epta

ble.

B

eetle

dam

age

affe

ctin

g up

to 5

per

cen

t of t

he su

rfac

e ar

ea. N

o m

ore

than

tw

o ex

ampl

es o

f bee

tle d

amag

e pe

r pot

ato.

Gro

wth

Cra

cks (

heal

ed)

Gro

wth

cra

cks m

ust n

ot b

e de

eper

than

3 m

m. L

engt

h is

not

an

issu

e.

Pota

to m

ust b

e ea

sily

pee

led

by o

ne p

ass o

f a p

eele

r. O

nly

one

grow

th

crac

k ac

cept

able

per

pot

ato.

Gro

wth

cra

cks m

ust n

ot b

e de

eper

than

5 m

m. L

engt

h is

not

an

issu

e. O

nly

one

grow

th c

rack

acc

epta

ble

per p

otat

o.

Skin

ning

(in

clud

es fe

athe

ring,

flak

ing)

N

o fo

rm o

f ski

nnin

g is

acc

epta

ble.

A

ligh

t fea

ther

of s

kinn

ing

affe

ctin

g up

to 1

0 pe

r cen

t of t

he su

rfac

e ar

ea.

Acc

epta

ble

in e

ither

a sc

atte

r or c

lust

er fo

rmat

ion.

Skin

Ble

mis

hes –

Scu

rf

(incl

udes

stai

ning

, bla

ckdo

t)

Scur

f aff

ectin

g up

to 1

0 pe

r cen

t of t

he su

rfac

e ar

ea. S

curf

mus

t onl

y be

of a

ligh

t sha

de a

nd th

e po

tato

mus

t be

easi

ly p

eele

d w

ith o

ne p

ass

of a

pee

ler.

Acc

epta

ble

in e

ither

a sc

atte

r or c

lust

er fo

rmat

ion.

Scur

f can

cov

er th

e en

tire

surf

ace

of th

e po

tato

pro

vide

d it

is o

f a li

ght

shad

e on

ly. P

otat

o m

ust b

e ea

sily

pee

led.

Skin

Ble

mis

hes –

Cro

codi

le S

kin

Cro

codi

le sk

in a

ffec

ting

up to

2 p

er c

ent o

f the

surf

ace

area

. A

ccep

tabl

e in

a c

lust

er fo

rmat

ion

only

. C

roco

dile

skin

aff

ectin

g up

to 1

0 pe

r cen

t of t

he su

rfac

e ar

ea. A

ccep

tabl

e in

a c

lust

er fo

rmat

ion

only

.

Rhi

zoct

onia

(B

lack

Scu

rf)

Rhi

zoct

onia

aff

ectin

g up

to 2

per

cen

t of t

he su

rfac

e ar

ea. A

ccep

tabl

e in

eith

er a

scat

ter o

r clu

ster

form

atio

n.

Rhi

zoct

onia

aff

ectin

g up

to 1

0 pe

r cen

t of t

he su

rfac

e ar

ea. A

ccep

tabl

e in

ei

ther

a sc

atte

r or c

lust

er fo

rmat

ion.

Def

ect T

oler

ance

Lev

el

No

mor

e th

an o

ne d

efec

t to

appe

ar o

n an

y on

e po

tato

N

o m

ore

than

two

defe

cts t

o ap

pear

on

any

one

pota

to

- 19 -

The grading standard allows for the grading of both washed and drybrushed potatoes. There are approximately thirty potato varieties grown each year in Western Australia for the domestic ware market. All of the varieties will be graded with the new standard taking into consideration distinguishing varietal characteristics. The supply chain group identified that the next step was to trial the grading standard at washpackers.

- 20 -

3.3 Stage Three – Washpacker Trials and Finalisation of the Grading Standard The draft grading standard was trialled in the three largest washpackers over several weeks to ensure the written standard could be carried out from an operational perspective and accurately reflected the physical product requirements. The selection of three washpackers allowed the grading standard to be trialled on potatoes from different growing regions, thus evaluating the standard against different agronomic environments. The standard was drafted into the format of a poster specifically for use in the trials. The posters were displayed above each grading table and grading staff were trained in the new grading standard by representatives from the supply chain group.

Major Findings from the Washpacker Trials • Physical sizing of product to the standard was not a problem. However, it was felt

by several members of the supply chain group that the range in the small size category should be slightly larger to compensate for all potential marketing opportunities. Additionally, the range in the medium size category should also be slightly larger to compensate for loads which consist of a higher overall percentage of large potatoes.

• With respect to the defect grading, there did not appear to be any significant

changes to the quality of the Class 1 grade. However, it appeared that the severity of defect previously accepted into the Class 2 grade was now significantly less with the new standard. This in turn increased the percentage of product classed as waste in each packout.

• When compared to the previous grading practices, the new standard increased the

overall quality of potatoes sold at retail level. Results from the trials were reported back to the supply chain group in a detailed presentation and further feedback was provided based on these findings. Although the trial indicated a possible increase in the percentage of waste, the supply chain group was satisfied the draft standard provided retailers with a product more closely aligned to their specifications. Additionally, it was felt the standard provided growers with consistent ongoing feedback with respect to the required level of quality. The supply chain group modified the standard to open up the size categories, but chose not to modify the quality specifications.

- 21 -

Table 7: Size range comparison Old Size Range New Size Range

Small 30 g – 110 g

Small 30 g – 120 g

Medium >110 g – 300 g

Medium >120 g – 320 g

Large >300 g – 450 g

Large >320 g – 450 g

Finalisation of the Grading Standard The final grading standard was signed off by the supply chain group for final production. After considering the findings in the review stage of how other grading standards were presented, the supply chain group felt that it was appropriate to present the new grading standard for ware potatoes in Western Australia in the format of a colour poster with an accompanying six-page brochure to explain the background of the project to industry stakeholders (see Figures 3 and 4).

Grading Poster Copies of the poster have been produced for each member of the supply chain, including growers, washpackers and retailers. The style of presentation of the poster will vary for each washpacker based on their limitations at the sorting table.

Figure 3: Grading standard poster

- 22 -

Brochure The brochure provides background information on the project and findings from the audit that led to the development of the new grading standard. The brochure also provides information on the impact of the standard on growers’ operations and how the new standard relates to other production activities. Figure 4: Brochure explaining the grading standard

- 23 -

3.4 Stage Four – Communication and Dissemination of the Grading Standard to Industry Stakeholders Communication of this project was split into two areas: regular ongoing communication to keep the industry up to date on the progress of the project and communication of the grading standard on completion.

Regular Ongoing Communication To ensure all industry participants had a thorough understanding of the process which was undertaken to develop the new grading standard, regular and ongoing communication was undertaken by Western Potatoes over the 12 months of the project. Industry stakeholders were informed of the progress through regular articles published in the industry newsletter and were encouraged to ask questions or provide additional feedback during the process. The articles were also available on the industry website.

Communication of the Grading Standard to All Industry Stakeholders The official grading standard will be communicated to all industry participants over the next two months. The standard will not be officially implemented until 1 July 2004. This will allow time to train the grading staff at the washpackers and to fully brief washpackers and retailers in the standard, so they can address any resulting questions from the growers. It was also felt more appropriate to implement the new standard at the beginning of the new growing season. The standard will be communicated separately to washpackers and growers. All washpackers will be provided with training in the new standard from Western Potatoes. The training will be tailored to suit each washpacker, following discussions with the manager and quality control officer. The first priority is to identify a leader within each washpacker who will be responsible for ensuring that the washpacker is ready to grade potatoes under the new standard by 1 July 2004. All growers will be invited to attend a presentation which will explain in detail the new grading standard for ware potatoes and the process used to determine the standard. The presentation will be repeated in three different locations central to all ware growers. A small number of representatives from the supply chain group will present the findings to reinforce to growers that the project was entirely an industry-driven effort. Growers will also be supplied with a copy of the grading poster and brochure. After the implementation process is completed, the standard will be communicated to consumers via the Western Potatoes website and ongoing promotional material distributed by Western Potatoes. The new grades will also be documented on any new packaging produced after 1 July 2004.

- 24 -

Changes to Formal Documentation All documentation relating to grading such as packout and payment records will be modified to reflect the new standard. This will be done in the months leading up to the implementation date of 1 July 2004. In accordance with the legislation, the official new grading standard will be published in the Government Gazette and the June 2004 edition of the industry newsletter.

- 25 -

4.0 DISCUSSION

All of the objectives of the project have been successfully met. In addition to the development of the new grading standard, a number of other achievements have been accomplished through this project. Continual communication with industry members and the involvement of industry representatives in the entire process has lead to the development of a more cohesive supply chain group that feels strongly about the need for a new grading standard that reflects consumer requirements. In addition, the supply chain group believes that the Western Australian industry must focus on delivering a high quality line of ware potatoes. Through the process of group meetings, members have gained a better understanding of the various activities and constraints faced by the different sectors of the supply chain. The meetings have served as a forum for members to raise other issues and seek suitable outcomes for all. The supply chain group expects to continue to meet to seek solutions to identified supply chain issues. Grower representatives now have a better understanding of the ‘consumer’ end of the supply chain through their enhanced understanding of washpacker and retailer activities and the constraints they face.

- 26 -

5.0 RECOMMENDATION It is the recommendation of the supply chain group that the grading standard be closely monitored by Western Potatoes over the next 12 months with the intention that the standard will be modified as retailer specifications are updated to meet changing consumer requirements.

- 27 -

6.0 ACKNOWLEDGMENTS Representative members from the Western Australian ware potato industry supply chain group who worked on this study would like to thank the following people for their support during the review and audit stage: Andrew Henderson Australian Mushroom Growers Association Barry Filp Bev Steggles Bruce Fry Claire Hamilton Bates Clinton Zerella Eric Coleman Helen Lipton Jan Davis Keith Blackmore Leigh Walters Martin Clark Robert Cerchiaro Russell Sully Stephen Wade We would also like to thank the following people who were integral in the development and design of the grading poster and brochure: Lindsay and Linda Webb, 4L Design Group Jan Knight, Flying Edits

- 28 -

7.0 BIBLIOGRAPHY Amesbury, K., Kernot, I. etal (2003) Tableland Avocado Grading Guide (poster). Tableland Economic Development Corporation, Department of Primary Industries. Amesbury, K., Kernot, I. etal (2003) Tableland Lychee Grading Guide (poster). Tableland Economic Development Corporation, Department of Primary Industries. Broadley, R., Rigden, P. etal (2002) Ladyfinger Packing Standards: Grade 1 (poster). Queensland Department of Primary Industries. British Potato Council (www.potato.org.uk). Department of Justice, Canada (1985) Canada Agricultural Products Act – Part 1, Grades and Standards (http://laws.justice.gc.ca/). Harper, S. and Coleman, E. (1998) Potato Information Kit Annual Update (Agrilink Series). Queensland Horticulture Institute, Department of Primary Industries. Henderson, A. and Coleman, E. (1999) Potato Grading Chart (poster). Agriculture Victoria. Henderson, A. and Bennett, R. (1999) Product Description Language – Potatoes. ExpHORT 2000 Publication No. 71. Agriculture Victoria. Henderson, A. (2000) Fresh Potato Quality, Promotion and Marketing – What’s Been Happening? IHD at Potatoes 2000 Conference “Linking research to practice”. Jones, C. and Frazer, M. etal (2003) Tableland Tahitian Lime Grading Guide (poster). Tableland Economic Development Corporation, Department of Primary Industries. Market Equity (2003) Western Potatoes Consumer Behaviour Monitor, unpublished. New Zealand Vegetable and Potato Growers’ Federation Inc (1996) Pakhouse and Grower Checklist for NZ Fresh Produce Approved Supplier Program (www.vegetables.co.nz/about/default.cfm). NSW Agriculture and Fisheries (1991) NSW Grading, Packaging and Labelling Requirements. Agnote EIB/13, NSW Government Gazette No. 41. NYS Department of Agriculture and Markets (1990) New York State Standards for the Grading, Classifying and Sale of Potatoes. Circular 860 (www.agmkt.state.ny.us/FS/pdfs/farmcircs/circ860.pdf). Potatoes South Africa (www.potatoes.co.za). Queensland Department of Primary Industry. Pineapple Quality Standards (poster). Queensland Fruit and Vegetable Growers Association.

- 29 -

Schaupmeyer, C. (2002) Potato Growers of Alberta – Codes of Practice for Potato Producers (www.albertapotatoes.ca). The Expert Foundation (2001) National Standard for Certification of Seed Potatoes – prepared for the Australian Potato Industry Council. Tree, C., Ledger, S. Mango Quality Standards. Queensland Department of Primary Industries. Walters, L.J. (2002) Potato Internet Starter Pak (Version 4). USDA (1997) United States Standards for Grades of Potatoes (www.ams.usda.gov).