Staying number 1: the factors influencing potato prospects

The UK’s exit from the European Union, Covid-19 and the Agriculture Bill will cause lasting disruption to food supply chains over the next decade.

Across the UK as elsewhere around the world the grocery sector is in the midst of a revolution. The social restrictions implemented as part of the lockdown measures have forced dramatic changes in the way society consumes fresh produce, including potatoes and other vegetables. The extent of the turmoil inflicted remains to be seen. It is possible that these changes will become established behaviour.

What are the changes brought on by Covid-19?

Data from the Office for National Statistics reveal that in the year to October 2020, online food sales in Great Britain rose 99% as consumers decided there were more enjoyable recreational activities than queuing to push a trolley round a supermarket.

Research by Bain & Company, a management consultancy firm, estimates that 35-45% of this increase will become permanent once restrictions are lifted. The introduction of lockdown measures has however, been a boon for grocery retailers. Across the fresh produce category, sales values and volumes are up just over 6% on the year to 9 August 2020, according to data from retail analysts Kantar.

Within the fresh produce retail category, potatoes (old, new, and baking) are the single biggest item accounting for 21% of the 6.6 million tonnes of fruit and vegetables sold in the year to 9 August 2020. It is perhaps a reflection of the potato’s versatility that retail volumes are up 8% over the same period, despite sales of bakers remaining flat.

The impact of the lockdown restrictions can be seen most clearly in the out-of-home sector where the forced closure of pubs, restaurants and takeaway outlets led to a collapse in demand for processed products.

With consumers unable to eat out for much of the year, supermarket sales of processed potato products have also boomed demonstrating that convenience is still a winner, even when people are stuck at home with little else to do. In the six months to 24 October 2020, retail sales of frozen chips rose 16% and sales of crisps and other potato snacks, 17%, reports AHDB Potatoes.

Perception and future threats

Central to sustaining the potato’s place as the country’s biggest selling vegetable is maintaining a positive perception among all sectors of society. Nearly three-quarters (72%) of consumers regard potatoes as a healthy staple, but it is also most often consumed alongside meat. Promoting its appeal to those following a vegetarian or vegan diet is fundamental to maintaining consumption levels.

While the coronavirus pandemic has disrupted supply chains and changed consumer behaviour, many of the issues seen at the start of the first lockdown, such as product shortages, have largely been resolved.

Potatoes lack ‘youth appeal’

Consumer analysis by Kantar highlights a demographic threat to potato consumption with children under 15 years the least likely to have potatoes with a meal at just 15% of sittings. In comparison, those over 55 are the main consumers enjoying potatoes with a meal on 41% of occasions.  The evening meal remains the favoured occasion for eating potatoes being served at 73% of all sittings. Potatoes are 34% less likely to be consumed than other vegetables at the in-home lunch, with potatoes featuring in less than one-fifth (17%) of lunches. 

A positive note, however, is that potatoes are mainly consumed for their enjoyment, with 68% of main meal servings being had for this reason. Specifically, taste is the principal appeal of potatoes and are 10% more likely to be chosen for this reason than other vegetables. Potatoes are also consumed for their practicality, with 39% of servings consumed for being ‘filling’.

The next shock is not far away 

Research by Promar International however, suggests the next supply chain shock is already less than two years away.

“The fresh produce sector has been grappling with how to resolve its reliance on migrant labour for more than two decades, but Brexit and coronavirus have brought it to the fore. Increasing the use of mechanisation and automation as part of a move towards more use of so-called “agri tech” in the sector is now ranked as a ‘nine out of 10’ priority for many agri-food businesses, but there is still a lot of work to be done,” explains John Giles, divisional director at Promar International, a consulting firm.

“Moving away from a reliance on labour will be central to improving the resilience of businesses in this sector. History suggests that a disruptive event, be it a global financial crisis, an outbreak of either human or animal disease, or extreme weather in the southern hemisphere impacting the balance of global supply and demand, happens every two years. We need to begin addressing the weak points in the supply chain now,” he adds.

As the government embarks on plotting a greener future for the economy and society, improving the sustainability of farming has become a priority as has improving self- sufficiency in domestically produced food stuffs.

“From the Agriculture Bill and the move to only rewarding farmers for activities outside the market, to the development of a National Food Strategy and a national agri-tech strategy to promote productivity, this all points to a new way of farming in the future. Add in the commercial pull of retailers who have committed to carbon neutral and more sustainable supply chains and it is evident that agriculture will undergo a revolution of sorts over the next decade,” adds Mr Giles.