Suppliers are fearing for what fewer supermarket promotions will mean for the potato category, in a season that has seen an imbalance between supply and demand push down prices.
Demand is said to be “benign”, in the context of one of the mildest Novembers on record and the switch from promotions to consistently low prices.
The latest Kantar Worldpanel figures for the potato market show that value has stepped up by 3.8 per cent to add £60 million to the category, driven by price increases of 2p per kilo. Volumes, on the other hand, have slipped by 0.9 per cent as consumers shopped the category less often.
Tesco has led the category, with shoppers buying more even though it cut back on deals this year.
“There has been a clear change of tack by the retailers,” says one insider. “They are trying to hang on to every last penny. There was a time when we had too many promotions going on, but now supermarkets are looking more at everyday low prices. But if you take away the promotional potential, there will be areas that are over-and under-selling.
“If you have stocks available, as we do now, there is no way to push that forward. There are not as many promotions as there used to be and the activities that we had before are not possible because of cost pressures.”
The sector has just gone through a difficult harvest, with conditions varying considerably in different parts of the UK.
The Potato Council’s provisional estimate of total production in Great Britain for the 2011 crop year, released last week, is six billion tonnes, up 3.5 per cent on 2010. The total planted area was 0.4 per cent lower than last year, but yields have improved, reaching 47.9t/ha.
The UK harvest is nearing the end, with lifting almost complete and most stocks in store in good condition. The continued warm temperatures are proving detrimental to those with ambient stores, with some reports of premature sprouting.
Growers in the East and South are just about finished, some growers in the West Midlands without storage facilities are awaiting orders to clear fields and some Scottish producers are being hindered by rain.
David Rankin, seed and procurement director for Greenvale AP, admits that it has been a “challenging” year but he maintains that growers have to be ready for every eventuality.
Jill Witheyman, marketing manager at Good Natured, maintains that trade has been “pretty depressed” as growers have had to sell stocks that they cannot store or that won’t keep. “This has slowed down now and I would expect to see a more normal pattern of movement emerge over the season,” she says. “Potatoes are a vital part of the produce offer and as such, it is vital that we keep the category exciting and interesting for consumers. We have to make sure that all shoppers are catered for.”
Now that the UK harvest is almost over, all eyes are on how the sector can market the increased volumes that it has to play with this year. The first-ever Potato Week was held last month, signalling the start of the second Many Faces of Potatoes campaign. The three-year initiative, which runs simultaneously in Britain, France and Belgium with EU investment, targets younger consumers in a bid to increase consumption in the long term.
Alongside this, the countdown to National Chip Week in February has started and the Potato Council is appealing to industry to get involved, as the event generates £15 for every £1 of levy spent.
But insiders are worried for the short to medium term. “In the next three to four months, the market will come under pressure,” says one supplier. “I don’t see it improving before Christmas. Growers and suppliers are losing money because there is too much supply and not enough demand.”
For now, growers and suppliers are thinking ahead to the next round and from now until Christmas, plans for next season are being put in place.
MAPPING A REVOLUTION
This has been a momentous year for the future of potato breeding. An international team of scientists published their breakthrough work on mapping the potato genome in July, so what will this mean for the future of one of the most heavyweight produce categories in the UK?
Dr Glenn Bryan, The James Hutton Research Institute
Mapping the potato genome promises to transform the process of developing new varieties. It is set to massively speed up the 10-12 years it takes to create new commercial cultivars, which opens up a number of opportunities for the potato sector.
This summer, a high-profile team of scientists - the UK team being led by researchers at The James Hutton Institute in Scotland - released the details of their study.
The breakthrough is key for traits such as resistance to late blight, the causal agent of which, Phytophthora infestans, is said to be evolving at an alarming rate. The findings should allow resistant varieties to be bred and released faster to keep ahead of this aggressive and economically damaging disease.
In fact, the potato is one of the top staple foods in the world and the most important non-grain crop for human consumption, particularly in developing countries, which now account for more than half of the global harvest. The potato’s ease of cultivation and high energy content have made it a valuable cash crop for millions of farmers.
And with global population forecast to reach nine billion by 2050, there will be many more mouths to feed and the genome sequence will allow scientists and breeders to increase the efficiency of potato production to help meet this challenge.
The Scottish scientists were part of the global Potato Genome Sequencing Consortium (PGSC). The UK team, funded by the Scottish government, the Biotechnology and Biological Sciences Research Council, DEFRA and the Potato Council, was heavily involved in several aspects of the project - notably the linking of the genome sequence to pre-existing genetic maps of potato.
This is an important step in using the genome sequence in potato improvement and allows scientists to compare the genome sequence with the location of important traits.
It means significant progress in trying to identify the actual genes that play causative roles in important traits, such as tuber shape, tuber dormancy and earliness, all of which are extremely important to the fresh market, as well as for processors.
This is a major step forward in understanding potato biology. It will lead to accelerated breeding of new potato varieties through the use of the genome data to identify genes and genetic markers for important traits. Technology to exploit the genome sequence immediately is already being prepared in the UK and elsewhere. -
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