I don't know about everyone else, but my grocery bill keeps growing, and the groceries I manage to take home is well, shrinking. I suspect I am not alone.
Our old friend Ronald Reagan once said, “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.” Many economists have drawn parallels from the pre-Reagan inflation era in the late 1970s and early '80s to today. It's ugly.
I recall that high-inflation era as a pimply-faced teenager just starting in produce. The price of gasoline had doubled overnight, from 39 cents to 79 cents a gallon. Everyone panicked as inflation soared. I had to convince my dad that my Honda 175 cc motorcycle was the smartest vehicle purchase at the time, as he was opposed to having me ride a “death trap.”
“Dad, it gets 60 miles to the gallon,” I pleaded. (This, at a time when many cars got around 12 to 15 miles per gallon, tops).
He squinted thoughtfully. “Well — you be careful on that thing!” he said. Easiest sell I ever made.
The discussion then, as now, is about value. It's an overused word in retail circles, perhaps, but retailers and foodservice operators are struggling to provide that value perception in the heavy-inflation period we're enduring today.
I stopped into a Midwest chain last week that was advertising bananas as a lead item: only 39 cents per pound, a crazy low price point on the No. 1 fruit item. That's sure to help, right?
Well, yes and no.
Every time we ever advertised bananas, we only sold about 25% more volume than normal. That's an abysmal lift, considering that any other strong lead item (grapes, avocados, berries) would easily triple —even quadruple (or more) — in volume over regular sales. We concluded bananas had this low impact because consumers really can't load up too much. Bananas don't keep, and shoppers can only use so much.
I know what you're thinking: Got a better idea, Armand?
Which plate is more profitable? Foodservice operators, by shrinking the protein size 1-2 ounces while increasing the potato serving will provide better plate coverage, improve the operator's value image and put more money in the till at the end of the day. Potatoes are by far the least expensive item on the plate, inflationary times or not. (Photo courtesy of Armand Lobato)
Maybe. I recently stopped at a chain store on my way home and spied 5-pound bags of russet potatoes on sale for just $1.77. What? Now that's something to crow about.
Think about it. Potatoes are the nation's (actually the world's) No. 1 vegetable. Potatoes are rich in vitamins and minerals, are naturally low in calories, are fat-free and even endorsed by the American Heart Association. Potatoes, when stored correctly in a cool (not cold) space can last up to a couple of weeks, and if you visit the Idaho Potato Commission's website you'll find nearly 2,000 ways (and counting) to fix the delectable tuber.
That $1.77 price point? That equates to just 35 cents per pound, making it even a better consumer value than even the rare, red-hot banana price — and potatoes can be consumed skin and all with minimal waste. Further, spuds will move a heck of a lot more tonnage, guaranteed.
Related: More insight from Armand Lobato
The only problem with this potato ad? It was merchandised on a small table in the back of the produce department. No spillover. No secondary display. No attention. Even the highlighted price was barely larger than a credit card.
The worst part? In fine print the sign read, “Limit 2 per customer.” Why a limit? The retailer blew a golden opportunity to promote its bestselling vegetable and probably move a couple of pallets per day in this store alone, merchandised aggressively in a prominent location.
Instead, they “hid” the product in the back, with minimal facings, and lost out on a chance to make a few friends while boosting their price image and reputation as the grocer who's trying to ease inflation food worries.
Potatoes may never be the lead, featured item compared with “sexy” choices such fresh cherries, local peaches or strawberries, however, the potato category (especially in these inflationary times) can be promoted with multiple ads this fall and winter — all while earning the retailer a healthy gross profit. That's especially considering the robust Idaho potato crop this season will top a whopping 14 billion pounds.
Every aspect of the glorious potato story needs to be told in marketing efforts in terms of versatility, ease of preparation, flavor, nutritional value, and especially, the positive effect potatoes have on the consumer's budget. Potatoes by far are the least expensive item on the plate, even at regular price. In short, potatoes deliver on all counts.
But a 35 cents per pound ad? That's far more than just a-peeling.
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Armand Lobato works for the Idaho Potato Commission. His 40 years of experience in the produce business span a range of foodservice and retail positions.