winter meeting market trends shaping potato...
TRANSCRIPT
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WINTER MEETING
Market Trends Shaping Potato Marketing
ByLindsey McKaig
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Domestic Market Sales & UsageWhat’s selling? Where are the potatoes going?
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Domestic Situation
Total Sales Growing
Foodservice Even More Important
Potatoes Standing Up to the Competition
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Total U.S. Potato Utilization 2016
Retail + FS + Exports - Imports =Total
Utilization
2015 14,644 19,181 6,911 4,716 36,019
2016 14,524 20,389 6,976 5,119 36,690
% change -0.8% 6.3% 0.9% 10.2% 1.9%
Total U.S. Potato Utilizationin Billion Pounds Fresh Weight Equivalent
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Retail Sales: FY18 (July – November)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2016/17 2017/18
1,000 Pounds
Fresh Frozen Dehy Deli Refrig.
3.2%
0.3%
0.6%1.9%
4%
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Foodservice Sales by Product
Foodservice (millions of pounds FWE)
2015 2016 2017 % change
Frozen 11,886 12,425 12,522 1%
Fresh 4,310 4,379 4,410 1%
Chips 1,544 1,560 1,536 -2%
Dehy 6,036 5,952 5,826 -2%
Refer 522 702 714 2%
Total 24,298 25,018 25,008 0%
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Food Dollar Spending is Shifting
Census Retail Trade
44%
46%
48%
50%
52%
54%
56%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTDJune
Do
llar
Shar
e o
f Fo
od
Sal
es
Food At home Food Away from home
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Consumer’s Favorite Vegetable
Share of At-Home Dinners
71% Ate Potatoes at Least Once in the Last 7 Days
Source: 2017 Consumer A&U. Weekly penetration.
Favorite Vegetable Vegetables
Potatoes 71%
Green beans 67%
Broccoli 66%
Bagged salad 60%
Sweet potatoes 44%
1
2
3
Potatoes
Green beans
Broccoli
Bagged salad4
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International Market and Trade Stat UpdatesWhat’s happening with exports?
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Export Situation
Exports Up in FY18
Challenges Abound
Opportunity for Further Growth is There
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U.S. Potato Exports20 Years
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
US
Do
llars
in
Mill
ion
s
July/June Marketing Year
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U.S. Potato Exports: July – November
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2016/17 2017/18
Metric Tons
Frozen Dehy Fresh Seed
20%
7%
3%
107%
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Challenges
Expanding Competition
Market Access & Regulatory
Shipping Costs
Limits on U.S. Capacity
Exchange Rates
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OpportunitiesIncreasing Demand & Trade
U.S. Supply
Exchange Rates
Potatoes USA Programs
Coordination & Cooperation
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Market Trends
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Generation Makeup is ChangingTotal U.S. Population as of December 2015
Source: U.S. Census, 2016
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Online Grocery Shopping
Delivery options or pick up in store model
Easy to see order and make instant changes if necessary
No longer an option – it is a must!
Majority of customers purchase less than 50% of total trip
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Fewer Home Cooked MealsThan 30 Years Ago
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Retail
Consumer
Foodservice
Fresh
Center
Snack
Non-Commercial
CommercialGrocerant
Meal Kits
Delivery
Where do we find potatoes?
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Retail
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Trends Shaping Retail
✓ Local
✓ Health
✓ Digital/eCommerce
✓ Investing in People
✓ Restaurants in Store
Source: Supermarket News
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Fresh Prepared at RetailKeeping Consumers in the Store
Source: Datassential (2016)
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In-store Meal Kits Solutions
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Implications & OpportunitiesWhat the Market Needs - Retail
Retail continues to adapt to changing consumer avenues for purchase
Consumers slow to adopt online for produce
Fresh ideas to grow the fresh category volume
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Foodservice
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Support ServicesNon-Commercial Trends
Communicating health
Values-driven decision making
Increased use of technology
Elevated meal experience
Union/Minimum Wage issues
Sources: Datassential IFMA Foodservice Landscape 2016/2017 (Sep 2016); Food Management
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Retail Foodservice
Trying to crowd out traditional FS
Not letting any meal occasion go unmet
Driving retail sales and total store success
Source: Datassential (2016)
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Trends in FoodserviceWhat Chefs are Seeking and Consumers Demanding
Health Consciousness
Gluten-Free/Allergen Focus
Authentic Global Flavors
Food Halls/Pop Up
Restaurants
Restaurant Delivery Services
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68%
24%
Order from restaurant'sown delivery service
Order from 3rd party deliveryservice
Millennials
87%
Delivery is Becoming Second Nature
29
Millennials
40%
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Implications & OpportunitiesWhat the Market Needs - Foodservice
Commercial Foodservice:• Delivery Services Increase Sales
• Labor and Food Cost Savings
• Abundant Access and Global Flavors
Support Services in Foodservice:• Contract Companies = One Stop Shop
• Higher Education = Tomorrow’s Generation
• Healthcare = Exponential Growth
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Thank You!