THE DEAL WITH POTATOES

RUSSELL REDMAN

Activity in the frozen potato category, though still strong, is at more of a slow boil than at its sizzling pace of the past, according to frozen food buyers and merchandisers. One difference, they reported, is that newly introduced products aren't creating as much excitement as other introductions have in the past. Some of that apathy, they surmised, stems from the higher prices that go along with the new items, most of them seasoned.

As a result, crinkle-cuts, steak fries, shoestrings and hash browns still buoy the segment, and some supermarket chains are standing pat with their frozen potato sections because the new items aren't whetting consumers' appetites the way spiral fries, spicy fries, natural-cut wedges, seasoned hash browns and the like did several years ago.

Price, not new products, is what has driven frozen potato sales lately, retailers and wholesalers said.

"It seems like there's more seasoned items coming out, but their sales are not that strong," said Marty Wagner, head buyer of frozens at

Roundy's Ohio division, Lima, Ohio. "Most of the seasoned items are higher priced than the nonseasoned."

Wagner said McCain Foods, Chicago, is offering its Ultimate fries line in smaller bags of 24 ounces and 28 ounces, resulting in a price that's more attractive to customers. "Possibly that's going to help sales," he said. "I think they found out that consumers weren't going to spend the extra money for the seasoned items."

Jack Demoulas, frozen food and dairy buyer at Demoulas Market Basket, Tewksbury, Mass., agreed that the novelty of the specialty items often does not eclipse their higher cost. "I think if you take a potato and try to dress it up and then charge double the price, people aren't going to buy it," he said.

Dietary concerns have also had an impact on frozen potato sales, said Doug Brames, associate product manager at Ore-Ida, Boise, Idaho. "The consumer is not purchasing as many frozen potatoes as five to 10 years ago because of heightened awareness of fat and nutritional content," he said.

That trend has kept annual consumption of frozen potatoes essentially unchanged over the past decade, Brames said, adding that advertising for the segment is not as extensive as for other foods.

For the year ended Dec. 10, overall sales for the frozen potato segment were $854.6 million, a 3.2% rise from figures the year before, according to A.C. Nielsen, Schaumburg, Ill. Unit volume, however, was down 1.6%.

Ore-Ida accounted for 55.1% of the frozen potato sales volume and private labels accounted for about 20.2%, Nielsen reported. The next three top sellers -- McCain, J.R. Simplot and Inland Valley -- last year generated 2.9%, 2.8% and 2.5% of the category's dollar volume, respectively.

To stimulate frozen potato sales, supermarkets have relied on advertising, sales, buy-one-get-ones and low-priced store brands. "It's a deal-driven category," said Roundy's Wagner.

Some retailers have reported growth in national-brand sales, while others are high on private label.

"Anything that's on sale is what's selling," Sam Ciardi, frozen food and dairy supervisor at Village Super Market, Springfield, N.J. Village, a member of the Wakefern Food Corp. co-op, operates 24 ShopRite stores in northern New Jersey and northeastern Pennsylvania. Coupons have been effective, but half-price sales and BOGOs for ShopRite-brand fries have done very well, especially in city stores, he noted. "More or less, private label is taking over," he added.

Bertha Partin, frozen food marketing manager at Fleming Cos.' Phoenix division, also said private labels are strong in some frozen potato varieties. "Private label does a good job in shoestrings because of the [lower] price," she said.

However, Foodland Super Market, Honolulu, pushes Ore-Ida more than its private label, Western Family, in frozen potatoes, according to Harry Bernardino, grocery buyer.

"Private label just complements that section. We do not promote it as aggressively as branded items," he said, noting that his stores only carry Ore-Ida and Western Family. "For frozen potatoes, that's all we really need, and we're not looking to expand it. We'll let Ore-Ida drive the demand in that category. Western Family will just be the alternative, low-end, price-value product."

National brands respond better to advertising, said Larry Miller, grocery buyer and merchandiser at John C. Groub Co., Seymour, Ind. "The name-brand sales will probably increase threefold with an ad, whereas with the controlled brand you won't see much more sales because the price already is pretty low," he explained. "People do seem to load up whenever there's a special."

Retailers and wholesalers are hoping consumers will find new frozen potato products to load up on shortly.

"There hasn't been a whole lot of anything new in the frozen potato category," said Jack Welsh, frozen food category manager at Fleming's Philadelphia division, based in Oaks, Pa. Although they are popular, seasoned fries, curly fries and similar products already have been around for a few years, he noted.

But that's not to say there haven't been any new products. Ore-Ida, McCain, Inland Valley, store-brand suppliers and other manufacturers have expanded the frozen potato category with zesty fries, hot fries, "fast" fries, letter-shaped fries, microwave fries, criss-cross fries and stuffed potatoes, among other varieties.

"The new products are all revolving around the value-added items like curly fries, seasoned fries, steak fries, and coated fries and hash browns," said a frozen food merchandiser at a large Midwestern wholesaler.

For example, Ore-Ida has added Zesty Twirls, Country Fries and Hot Tots. Within the past six months, it also has introduced a microwave variety called Snackin' Fries plus a frozen sweet potato (competing with Mrs. Paul's) and Heartland Classics, a bag of microwavable potatoes and vegetables in a sauce.

Broadening its Ultimate frozen potato line, McCain Foods, Chicago, is rolling out crispy spirals, seasoned wedges and seasoned waffle fries called Cross Trax -- all of which have the skin on. The company also introduced 5 Minute Fries, shoestring fries that can be cooked in the oven in five minutes.

The problem is, retailers and suppliers said, most new frozen potato items are just variations of the same theme: different flavors and shapes.

"I don't see any significant trends in frozen potatoes," Demoulas of Demoulas Market Basket said.

Staple potato products sold in bulk bags, such as crinkle-cut, shoestring and steak fries, generate the most sales, Demoulas said, adding that he hasn't seen any hot sellers among the seasoned and shaped varieties. "I think each item stands on its own and has developed its own little niche."

Because of their novelty, specialty fries initially expanded the frozen potato market, but they now have become standard fare, said Village's Ciardi.

"For a while, it was a little bit of a fad, but then it seemed to just die," Ciardi said. Breakfast potatoes aren't what they used to be either, he added. "Hash browns and things like that are just dead. We had a big market for them about 10 years ago, but it's just died."

Three-pound and 5-pound bags of steak, crinkle-cut and shoestring fries from national and private-label brands, such as Summerdale, have sold well at his stores, as have 3-pound bags of curly fries, Ciardi said. "We're really trying to push the bulk bags because restaurants are coming in and buying them."

Other retailers and wholesalers agreed that the frozen potato section has been static. Sales among the different varieties have been mixed, they said, with products like microwave fries, topped or stuffed potatoes, seasoned shredded potatoes, frozen mashed potatoes, twice-baked potatoes, and new spicy or seasoned varieties failing to spark a substantial customer response.

"Seasoned fries, crinkles and curlies are not new anymore. They've been around a while. As far as new, novel or out of the ordinary, I haven't seen anything. It's still the old standbys," said Groub's Miller.

Unseasoned regular-cut, crinkle-cut, dinner and shoestring fries constitute most of his stores' frozen potato sales, while sales of twice-baked potatoes, stuffed potatoes and microwave fries and potatoes have been "nothing outstanding," Miller said. "It seems as though the business still revolves around that core 2-pound bag of crinkled potatoes," he added.

At Foodland, new zesty and flavored fries from Ore-Ida have rekindled some consumer interest in frozen potatoes, Bernardino said. Still, crinkle-cut and straight-cut fries are the sales leaders, followed by hash browns, which are "not as highly promoted," he said.

Curly, wedge and shoestring sales have been slack, Bernardino noted. "For us, shoestrings have not been a very strong customer market. Apparently, customers want bigger fries," he said.

Partin of Fleming said spiral and seasoned fries have remained good sellers, but sales of microwave fries and other boxed potatoes have been only fair.

"We had a few new items from Inland Valley, but other than that there hasn't been anything new in frozen potatoes," Partin said, citing new Inland Valley products like potato wedges and regular and seasoned criss-cross fries. "It's items that they've come out with to go head-to-head with Ore-Ida."

Inland Valley, in fact, is introducing nine new frozen potato items, with criss-cross, crispy crinkle, crinkle wedge, Southern-style hash browns and tater puffs appearing in stores in late April, said a spokesman for Lamb-Weston Inc., Kennewick, Wash., which manufactures the brand.

"There's been nothing happening in the category at all, and that's why unit sales have been flat or declining," he said. "That's why we're trying to get another player in there to generate more [consumer] interest."

To push new frozen potato products, McCain has conducted in-store demonstrations of its 5 Minute Fries at some ShopRites, Ciardi said. The company also printed a series of "A Great Idea from McCain" french-fry recipes on bags of its Ultimate fries.