January, 2014

Research Perspective and Comments & Analysis

Prepared Potato Images Increase Promotional Volume For Retailer Circular Ads

Don Ladhoff, Retail Programs Consultant, United States Potato Board

Retail promotions are very important to the fresh potato category, with the share of category volume sold on feature ads hovering around 27 percent. As the marketing organization for the U.S. potato industry, the United States Potato Board (USPB) has a keen interest in determining what can make retailers’ circular ads more effective. To that end, the USPB has been working with Nielsen Perishables Group in recent months to examine the characteristics of the most successful retailer feature ads. The results presented findings that retailers can easily adopt to increase fresh potato sales.

This opportunity initially caught our attention during the post-analysis phase of a Category Optimization program that the USPB implemented with a Midwestern retailer when Nielsen evaluated the promotional lift from a series of feature ads that ran over the course of the program. To our surprise, Nielsen reported that the most successful circular ads were ones that included images of prepared potato dishes as opposed to others, which depicted raw potatoes or showed bagged product.

Intrigued, we commissioned Nielsen to undertake a full-scale study to analyze the performance of two classes of retailer circular ads, separating out those using prepared potato images from those using images of raw or bagged potatoes. Nielsen examined examples of both classes of fresh potato circular ads from 10 different retail chains across the U.S., matching up their ads to align potato type & package, discount levels, and circular ad placement and calculating the aggregate lift on promotion generated by more than 40 matched sets of circular ads. After all the results were tabulated, Nielsen came to a straightforward conclusion: ads that feature prepared potato images are decidedly more effective!

Nielsen’s analysis determined that circular ads showing images of prepared potato dishes delivered incremental volume lifts that were a full 23 points higher than raw or bagged ads (156 percent versus 133 percent respectively). The analysis also determined that prepared potato ads proved to be much more effective for bagged potatoes than bulk potatoes, and that this effect was even more pronounced for Red bagged potatoes. While the improvement for Russet 5-pound bags using prepared potato images was similar to the overall differential for the entire potato category — a 24-point improvement, which is 134 percent compared to 110 percent — Red 5-pound bags experienced a performance boost of nearly twice the norm, a whopping 62 points (188 percent versus 122 percent incremental volume lift).

With Nielsen’s help, we went a step further to consider why this effect was occurring. Ultimately, we agreed that we could attribute the strong performance of prepared image ads to three primary factors:

1) Prepared potato images look more appetizing, and consequently do a better job of attracting consumers’ attention.

2) Prepared circular ads illustrate the desirable “end state” — the reason that shoppers want to purchase potatoes in the first place.

3) Delicious potato photographs provide consumers with ideas for new and

interesting potato preparations — a proven influencer for increasing potato

consumption.

Retail meat departments clearly discovered this same relationship long ago, as fresh beef is almost always shown in circular ads as a delicious cooked item. However, the produce department generally prefers to showcase “fresh” offerings — which works fine for berries, peppers, apples and the like, but less so for potatoes. Since fresh potatoes, like fresh beef, need to be cooked before serving, our research would indicate that a simple approach for improving feature ad performance is to treat potatoes like beef and always show them prepared.

The USPB is assisting food retailers in taking advantage of this opportunity to increase fresh potato sales by making hundreds of mouth-watering photographs of potato dishes available at absolutely no charge. Any image found in the USPB’s recipe database located at potatogoodness.com/recipes can be requested as a high-resolution image file; interested retailers should contact don.ladhoff @uspotatoes.com for more information.

 

Turn The Vision Into Consumption Reality

This study is fascinating and important — not just for the potato industry. 

There is nothing particularly surprising in the results. Why wouldn’t a photo of a beautifully cooked potato dish lead to more attention and purchasing than a picture of some bulk potatoes? As the analysis recognized, the food is beautiful and eye-catching. People are not actually interested in the ingredient, the potato. They are interested in the benefit, a simple baked potato overflowing with toppings or a complex potato au gratin, and, of course, photos suggest usage that consumers might not have come up with on their own.

I am not certain about the comment in the piece that simple photos are fine for commodities such as berries, apples and peppers, etc. That would be giving up too much too fast. Beautiful photos of these items in mouth-watering dishes — say peppers of several colors over a sizzling steak or beautiful apples in a wonderful Waldorf salad, or berries in ice cream — might well boost the effectiveness of these promotions. For similar reasons, a consumer who wasn’t thinking of buying bell pepper sees the picture, gets a hankering for steak prepared that way and puts it on his or her shopping list.

As always, great research raises additional questions. For example, why stop at the circular? If photos of prepared potatoes boost sales, why not have in-store signage with a “potato dish of the week” next to each in-store display?  Isn’t it likely that for the same reasons that attractive photos of finished potato dishes in the circulars boost sales — won’t similar photos in store drive consumer interest and purchasing?

Another interesting question is whether driving the cooking theme home wouldn’t boost sales more. Photos are beautiful, but what about adding recipes? How about making it convenient by selling all the ingredients in a little paper bag or box right next to the potatoes? We sell lots of salad kits that attract consumers because they make the job of making salad easy. Why wouldn’t making the job of making a fully loaded baked potato easy also sell well?

Also, we probably need to define things further. Surely not all recipes are created equal. With further research, we might find that certain types of dishes — say entrees versus side dishes — have differential effects on sales as a result of a circular ad.

One also wonders whether in-store demos — with the dish in the circular — might not pay off in high volume stores. And here might be a win for the produce industry: Because these cooked dishes often involve non-produce ingredients, perhaps those other items will pay for the demo and other promotions.

It is wonderful, of course, to have found a much more effective promotional technique, and kudos are owed to the United States Potato Board for being willing to break convention, invest in research and follow its implications. The growers that fund the operation will receive a big payoff from the organization’s efforts to facilitate advertising that will be more effective. Retailers, who will see bigger returns on their circular investment, also benefit as do consumers who get ideas for more delicious meals. So it is win-win-win.

What we don’t yet know, however, is whether the boost in promotional response actually translates into higher annual sales and consumption. If the beautiful photos of prepared dishes excite consumers to buy potatoes — but the consumers don’t make the dishes and eat the food — then the excitement of the photo might simply steal sales from the weeks following the promotion.

So the challenge for the industry has to be how to not merely entice the consumer with a vision of what can be — but also the industry can benefit if we help turn that vision into a reality. We now know that a photo of a prepared dish can boost sales in a promotion, so now we have to ask how we can actually get consumers to make the potato dish, thus use up the potatoes and keep purchases high in subsequent weeks. Unfortunately we don’t yet know exactly how to do this. More recipes seem like a good idea; easy-to-access apps and websites, QR codes, etc., all seem likely to help. Still, there is a challenge here.

In fact, this is really the challenge, not just for the potato industry but the entire produce industry. What techniques will increase usage and consumption, not just promotional sales? This is important becuase it is only increased consumption that can ultimately sustain higher sales of potatoes or any produce item.