Challenge is to take added value
Challenge is to take added value
New products, expert
advice and the challenge of
securing a greater share of
retail margins were the key
topics at the Aventis Potato
Sustainability conference in
Barcelona last week.
Charles Abel reports
POTATO production is going through huge changes, with growers leaving the industry in droves, processed products almost outselling fresh for the first time and a real need for producers to target the needs of end users.
Unless growers respond they could miss out on a fair share of the higher margins being taken from added value products by processors and retailers, potato industry experts heard last week.
"While consumption is not wavering, it is changing and changing very rapidly," the BPCs Damian Baker said. Processed potato consumption is set to over-haul fresh in the next 18-months, something the BPC had not expected before 2006.
Last year processed product sales soared 15%, while fresh potatoes slipped 8%, with economy pre-packs down 31%. "If anything the trend is accelerating," Mr Baker warned.
That move to processed is creating new added-value markets. "Who would have thought that we would have a 22,000t a year baby roasts market develop from virtually nothing two or three years ago," he noted.
But that is little comfort for growers who are missing out on a fair share of higher margin value-added products already, said NFU potato committee chairman Graham Nichols. "Growers are leaving the industry, never to return, because there is so little margin in it for them."
That exodus was confirmed by BPC figures, which showed 710 growers left the industry last year, up on both the previous years. "The trend is accelerating, not slowing," said Mr Baker. "If it continues at its current rate there will only be two growers left by 2008."
To halt the fallout farmers need equality in the food chain, Mr Nichols stressed. "Growers need a price that does not just keep their heads above water, but allows them to reinvest, for the future good of the industry, rather than to simply scratch a living and cover costs."
He deplored excessively tight specifications imposed by dominant supermarket retailers. "We are getting an increasingly two tier market, where you are fine if skin finish is fine, but things are very different if there is the slightest fleck of disease on the tuber. The gap is widening."
Several trade representatives felt growers could do more to help themselves. Growing for specific markets to ensure quality criteria are met and delivering crops that comply with intake requirements would help prices rise, by allowing factories to operate at capacity, they said.
PepsiCo crisp processing throughput rocketed once on-farm washing was introduced, for example, thanks to an immediate reduction in out-grades delivered by growers who were able to see the true quality of the crop. Once higher efficiency is achieved growers are in a position to ask for higher prices, they suggested. *
With fresh potato sales set to be outstripped by the processed product, the chase is on to win a share of added-value product margins.
Big changes afoot in potato sales – BPCs Damian Baker.
Potato producers need equality in the production chain – NFUs Graham Nichols.
Consumption
UK potato consumption remains third highest in Europe at 103kg a person a year, only beaten by Eire and Portugal and well ahead of the 54kg eaten per person in France.