PREPARED SPUD START-UP AIMS FOR BROAD A-PEEL: JOINT VENTURE PLANS TO ADD PREPARED-VEGGIE LINE OF 50 ITEMS

By Published on .

It may be small potatoes now, but a produce marketer aims to make its line of pre-cut spuds the cornerstone of a 50-item line of prepared raw veggies.

Fresh from the Start is the brand name of a joint venture between Hapco Farms, a fresh-produce company that distributes $200 m-illion of product annually, and Maine Packers, a Caribou, Maine, potato farmer.

$6 MIL CAMPAIGN

The partners will break an unusual $5 million to $6 million national TV and print campaign to drive volume and sway West Coast retailers to carry the six-item line of pre-washed potatoes, which are already scalloped, diced or shredded. The campaign is handled by Landey & Partners, Grounds Morris, New York.

The product, now in some East Coast and Midwest chains -- including Harris-Teeter, Finast Supermarkets, Giant Foods, Hy-Vee Food Stores, Jewel Food Stores and Safeway -- sells for $1.49 to $2.49 per 1.5-pound bag, compared to about $2.99 for a 5-pound sack of garden-variety spuds.

But Andrew Pollak, co-founder of Fresh from the Start, said consumers will readily pay the freight for convenience. "You buy a 5-pound bag of potatoes, use two pounds and then never see it again until you smell it [spoiling]," he said. The pre-cut potatoes can shave half-hour prep times for products such as potato pancakes to as little as five minutes, he added.

STRESSING CONVENIENCE

Convenience is stressed in advertising that breaks this week on cable TV's Food Network, as well as on prime-time programs such as "Ally McBeal" and "Oprah" in spot markets including Boston, Washington and Charlotte, N.C.

Print will break in October and November issues of such magazines as Good Housekeeping and Martha Stewart Living.

The spots, set in supermarkets, make the point that since consumers are never asked to pluck a chicken or milk a cow, they also shouldn't have to peel their own potatoes. Print headlines include, "Here's the deal. You bathe, we peel."

ADS RARE IN CATEGORY

Although there is at least one major competitor -- Simply Potatoes, made by Northern Star Co. in Minneapolis -- the ad support behind Fresh from the Start could help it stand out. Few products in the produce aisle are backed by ads.

The profit margin in produce "is 2%. Even if you were making 20% and spending $1.5 million a quarter, or $6 million a year, you'd have to be doing $24 million to $30 million [in sales to make the advertising pay]," said Mr. Pollak, adding, "We're not there yet."

Pre-cut, or "value-added," produce is a fast-growing segment. Mr. Pollak said pre-cut carrots now outsell 1-pound bags of whole carrots three-to-one. Shipments of romaine lettuce hearts, he added, hit 4.7 million boxes last year, up from 100,000 boxes in 1996.

Pre-cut potatoes, he believes, have the potential to be a $775 million business if 15% of potato buyers convert to their use.

Fresh from the Start will expand beyond potatoes and has plans for as many as 50 line extensions, including pre-sliced green, yellow and red peppers for fajitas

In this article:
Most Popular