Work of the British Potato Council

Citation

Jenkins, H. (1999), "Work of the British Potato Council", Nutrition & Food Science, Vol. 99 No. 1. https://doi.org/10.1108/nfs.1999.01799aaf.002

Work of the British Potato Council

Work of the British Potato Council

Introduction

In 1997, after more than half a century, the Potato Marketing Board was closed by the British Government to be replaced by the British Potato Council (BPC). It was not just a change of name ­ the whole philosophy of managing the structure of the British potato industry changed. The new body, known as a Development Council, was set up by Government under an Act of Parliament. Growers, merchants, processors and other interested parties were asked for their views before Government created the Council and all sectors of the industry indicated that they were in favour ­ growers by a very considerable majority, other sectors less so but all in favour.

The BPC's operations are funded by levies collected from growers and traders ­ £35 a hectare from growers across their total potato area and 20p a tonne from all first purchasers of potatoes. That provides the Council with an annual budget of some £6 million a year, which is invested in three main areas:

1. 1.

   to commission and fund research which is helpful to the technical efficiency and competitiveness of British potato growers and to effectively transfer that information to levy payers;

2. 2.

   to fund programmes to promote and develop the market for British potatoes (these activities will be wider than strictly promotional and will address industry-wide issues); and

3. 3.

   to gather and disseminate essential market information and statistics (we regard a wider and more effective provision of relevant market information as a real need if growers are to understand market trends and react to them).

Information gathered through research is disseminated via information bulletins, newsletters, technology transfer meetings in the growing areas and by organizing major, national technical events.

There are differences in structure. Whereas the Potato Marketing Board was an elected body of growers ­ funded solely by grower levies ­ the British Potato Council is a body entirely appointed by Government, with its members drawn from all sectors of the potato industry from growers through merchants, pre-packers and processors. Members of the Council do not actually "represent" any one particular constituency and because they do not have to be concerned about being re-elected there is a remarkable lack of politics.

They represent the industry as a whole and they bring specific expertise and knowledge of their sector to the Council's deliberations. As such, they focus entirely on delivering a service to the industry, which represents value for levy payers' cash. Also because the Council does have representatives from the whole potato supply chain, they cannot take decisions or set up initiatives which do not benefit the whole supply chain. Proposals which are biased towards improving producer prices or protecting merchants' or processors' margins simply will not get supported.

On the other hand, initiatives which expand the market: investment in research which reduces costs and improves efficiency along the length of the supply chain are backed enthusiastically. Without doubt, the discipline of seeing all investment as bringing benefit to everyone involved from primary producer to consumers is delivering results.

The second major change brought about by the move from Board to Council has been in the removal of quota and price support ­ giving British potato growers what amounts, in modern parlance, to a freedom to farm. Under the old regime the British potato industry was synonymous with control and regulation. Each grower had a quota ­ the area of potatoes he was allowed to grow. If he grew more, he was hit with a financial penalty.

All of this was mind-numbingly bureaucratic and stultifying to an industry, which was and is beset by competition in home markets both from alternative forms of starch, in rice and pasta, and by potatoes and potato products imported from other countries. And, one has to say, the restrictions from a regulatory body did not suit the type of entrepreneurial, go-ahead, fast moving farmer who is committed to growing potatoes in today's competitive environment.

In the end, the whole industry recognised the need to be rid of control and embrace the freedom which would allow growers to produce what their land, their labour and above all their markets would allow. In the short term, this has led to slightly more volatility in the market place. But it is already clear that our market is going to become more flexible and more readily responsive to market signals.

It will have to be because it does not take a genius to foresee that the potato market is going to be more demanding, more competitive, more price and quality conscious with every year that passes. Home producers are confident of success. Britain has superb soils, an excellent infrastructure with large farms and sophisticated grading, storage and packing facilities. The quality which we produce is excellent and our range of varieties is now broad enough to meet most demands ­ at home or abroad.

But what of the market that we are selling into, particularly our home market? Without question, it is changing so rapidly that even the biggest operators in production and marketing are having to move quickly to keep up. Huge sums of money are at stake. The cost of entry, as a potato grower, has meant that only the biggest, most serious investors who intend to stick with it over a sensible, business time scale are aspiring to be potato growers. For an industry so long at the mercy of people who came and went as the prospect of opportunity profits waxed and waned, that in itself is quite encouraging.

Similarly, the investment in the logistical infrastructure of storage, packing and distribution is huge. A new packing station, vital if growers are to supply supermarkets, is a £3m to £5m investment. Inevitably, this is leading to changes in the supply chain. The biggest and best growers are concentrating on being just that and increasingly, they are leaving the marketing to other specialists.

Growers are working with their marketeers, in some, but not all, cases farmer-owned businesses, and these are the firms which are investing in packing and grading ­ marketing products from shrink-wrapped baby new potatoes, salad potato packs, pre-packs and bakers. The links between supermarket, packer and grower are close and interdependent. They work together in new product development, providing more choice for consumers.

A new buzz word has emerged in the retail market ­ category management ­ giving one person in the business responsibility to develop a sector (or category). Potatoes are a category and this style of management will squeeze the maximum efficiency and profit for the supermarket out of the crop. That is not bad news for growers as a healthy supermarket trade is good for our industry ­ the more successfully they market our products the more we can produce. But it will introduce new demands and new pressures on growers.

These developments in the fresh trade for supermarkets are now being mirrored in food service and catering. New businesses are emerging to service this sector and the need to innovate and provide choice, to improve service through pre-preparation and processing is the driving force. This is, of course, all consumer driven. Professor David Hughes, afresh produce retail specialist from Wye College in England, recently pointed out that: "Over the past ten years in Great Britain, in-home fresh potato consumption [see Figure 1] is down 27 per cent on a per capita basis".

Figure 1 Percentage of total consumption (in home)

At the same time, in-home consumption of frozen potatoes was up 68 per cent and in-home consumption of other processed potatoes was up by 60 per cent. The reasons behind the shift have been variously documented. Fresh potato consumption is high in households with low incomes, where there were older people, all adult families and consumption tends to be higher in the winter. Conversely, consumption is lower among the more affluent, households with children and generally younger households. It is also lower in summer (see Appendix with Figures A1, A2 and A3 for further retail data).

A similar set of trends was highlighted in a recent publication from the University of Strathclyde sponsored by the UK's Institute of Grocery Distribution. They cited social change as driving consumption not only from fresh to frozen but also from within the home to outside the home (Figure 2). These changes included:

• •

  an increase in the number of one-person households;

• •

  a decline in basic cooking skills;

• •

  a decline in traditional family units;

• •

  an increase in women in employment;

• •

  more international travel increasing interest in ethnic food.

Figure 2 Percentage of total consumption (processed)

All of this adds up to change in one way or another and if potato producers are to maintain, let alone increase their share on the carbohydrate markets ­ inside and outside the home ­ they have got to develop a greater awareness of emerging and developing trends in customer needs. That means understanding the various niche markets which are available within the overall potato offer ­ whether it is in the supermarket or the restaurant, and hence the priority given by the British Potato Council to producing new information "products" allowing the industry sectors to make well-informed decisions.

In a typical supermarket it is possible to identify 24 different types of products ­ excluding packet snacks ­ which were solely potatoes. They ranged from loose, dirty ware potatoes at less than 50p a kilogram to highly processed products at more than £5 a kilogram. The most expensive product was almost 12 times as expensive as the cheapest. Frozen, micro-waveable product was on sale at as little as £2.50 a kilogram.

That represents a hugely diverse market inside one store with enormous choice for the consumer and opportunity for the industry. The clear message is that the higher up the added value chain you get the more potential there is for increased profit.

In addition, of course, that supermarket would have had several metres of shelf space devoted to rice and pasta ­ all competing for the busy consumers' attention. Potatoes will only hold their place on supermarket shelves (or on restaurant menus) if they maintain popularity with consumers ­ and so generate profits to the businesses ­ which compare with those alternatives. This has been identified as an area where an organization such as the British Potato Council can have an influence. It is working closely with supermarkets to help inform consumers about potatoes, encouraging new and innovative uses for them and pressing home key messages on health and nutrition, and in building much closer relationships with supermarkets it hopes it can ensure clarity of communication between customer and supplier.

BPC has recently published this in a booklet with comprehensive advice as to how consumers can get the best out of their potatoes: how to make the best chips, the best boiled and the best baked potato, which varieties to chose, some hints on cooking and presentation. The booklet was distributed to the media ­ where it got excellent coverage ­ and has been made available through the trade to consumers.

BPC also develops new potato dishes and new ways of presenting the product ­ in the home and in catering outlets. These are some of the presentations the British Potato Council Catering and Home Cooking Advisory Service have pioneered ­ presentations which are now in common use in the British home: Wedges, Baby Bakers, Fritzeez, Snackers and Loritos ­ all trying to stimulate the consumer into new ideas.

Within the fresh market, there is now gathering interest in the role of organic production. In Britain we are actually behind the European mainland in the move to increase organic sales of potatoes. However, every conference in England, it seems, now has a supermarket buyer telling the big growers that organics are likely to figure in as much as 15 per cent of their sales by the early part of the next century ­ that is from a present figure of less than 1 per cent!

Evidence of the seriousness of the supermarkets' interest has been shown by Tesco's recent £250,000 investment in an organic farming centre at Aberdeen University and Waitrose's continued support of the Henry Doubleday research Centre's Potato Open Days. A lot will depend on the level of conversion subsidy paid by Government. At present, premia for conversion of land registered for arable Area Payment is £250 a hectare over five years, although it is thought that current discussions may change this to £450 a hectare in the near future. So much for the fresh market, which remains the biggest outlet for British potatoes.

But the market information department at the British Potato Council is projecting that consumption of processed potatoes will catch up and overtake the consumption of fresh potatoes in our market within the next three or four years ­ and that will be driven, largely, by the food service sector.

The Strathclyde report estimated that fast food sales in Great Britain would increase by 90per cent between 1995 and 2005. In 1995, fast food accounted for 19 per cent of out-of-home food sales and that will rocket to 36 per cent by 2005. We are more than on course to meet those forecasts ­ and every time McDonalds, Burger King or Kentucky Fried Chicken opens a new outlet they add several tonnes of demand for frozen potato products.

The majority of those outlets will be taking their supplies from the major processors ­ driving more specialisation, more contracting and more precise production protocols as far as the producer is concerned. The whole potato part of the food chain is becoming more interdependent through tight specification, contracting and the drive to greater farm assurance. Indeed, potato growers are signing up faster to Farm Assurance Protocols than any other farmer group.

Large suppliers, such as pre-packers, supplying large buyers, such as supermarkets or food contractors are driving increased interdependence and, in turn, creating a more stable industry, particularly in terms of price. Customers want price stability; the big buyers are now actively pursuing policies to achieve that end; in turn farm-gate prices will also stabilise and marketing activities within retailers will be targeted more at increasing sales.

In Great Britain, we see this as driving us towards greater specialisation, perhaps fewer, bigger growers. The number of growers has reduced inexorably over the past decade. Clearly, this trend has to stop at some stage but we will continue to see reductions in the next five years as the market demands a quality product that can only be met by the most professional of growers.

That is the background against which the British Potato Council has operated in the first year of its life. The transition from regulated to deregulated industry has been smoother and less traumatic than some might have expected. It is bringing the whole industry together, beginning to break down the suspicions and mistrust between growers, merchants, packers, processors and retailers ­ in short between supplier and marketplace.

It has come at the right time to allow growers to cope successfully with the period of immense change in the market place outlined above.

Hazel Jenkins is PR Manager, British Potato Council, Oxford.

Appendix

Figure A1 Retail outlet share of fresh potato sales

Figure A2 Retail sales of prepacked and loose potatoes

Figure A3 Outlet share of retail potato sales (volume)