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United States Potato Board 2012 Annual Report

POTATOES PLAYING OFFENSEDear Growers:

For the past 10 years, USPB Board Members, representing growers and the potato industry from each US production region, have been familiar with the USPB’s “Net Negative Attitudes” measurement. At the 2011 USPB Annual Meeting, we reported this value had reached a nine-year low of only 18 percent of consumers who considered potatoes to be fat-tening and nutritionally deficient.

At this year’s Annual Meeting, we introduced the “Net Positive Attitudes” metric, a new and constructive way to definitively reflect the value of the USPB’s demand building programs and strategies on the market for potatoes and potato products. The “Net Positive Attitude” score is a composite metric measuring people who rated potatoes as “excellent” for “potatoes are healthy for you” AND “convenient” AND “flavorful” AND “fresh”.

Obviously, it is much more difficult to get into the net positive group than it is the net negative group since a person must agree at the highest level to ALL of these positive beliefs about potatoes. For the total US (2011 vs. 2012), the net positive score went from 19 to 21 percent. For the USPB’s “Linda” target, the net positive score increased from 23 to 25 percent!

Linda is now more positive about potatoes than she was prior to the low-carb dieting trend which began in 2004. We’re ready to play offense. Defense is important, but let’s move the ball down the field. Attitudes towards potatoes have changed, and this demonstrates an actual increase in demand.

Demand is at the top of a list of issues challenging the entire potato industry. These biggest potato industry challenges are not simply related to one sector, they’re affecting fresh, frozen, chip-stock, dehy and seed across the board. The other issues are obesity, low-carb diets, acrylamide and the changing lifestyles and meal preferences of consumers.

With the “Why Buy US” USPB international frozen program, we’re demonstrating conclusively why customers in foreign markets should buy US fries even though cheaper alternatives might be available from other countries. This effort involved two trips around the world to interact with customers and find out why they prefer US fries and how our support and technical marketing expertise helps them. An intuitive and straightforward demonstration shows importers how one kilogram of frozen US fries produces more servings per case than one kilogram of European sourced product.

The value of US exports reached $1.5 billion during 2011. Eigh-teen percent of all US potato production is now being exported. That’s almost one out of every five rows of US potato production leaving the United States for foreign markets.

The importance of the USPB’s work is demonstrated in the new programs and industry partnerships that have been developed. These will continue to create new opportunities for growth, and it’s recognized with new funding and support. We’re excited about where this industry is going.

Sincerely,

Sid Staunton, Tulelake, California Chairman, US Potato Board

2012/2013 USPB Executive Committee

timothy o’ConnorPRESIDENT & CEO

Sid StauntonTulelake, CaliforniaCHAIRMAN

todd MichaelUrbana, Ohio IMMEDIATE PAST CHAIRMAN

Mike CarterRosholt, WisconsinCO-CHAIRMAN DOMESTIC MARKETING

Bruce richardsonCapeville, VirginiaCO-CHAIRMAN DOMESTIC MARKETING

rob davisConnell, WashingtonCO-CHAIRMAN INTERNATIONAL MARKETING

ritchey toevsAberdeen, IdahoCO-CHAIRMAN INTERNATIONAL MARKETING

Brett JensenIdaho Falls, IdahoCO-CHAIRMAN INDUSTRY COMMUNICATIONS & POLICY

Chris SlagellHydro, OklahomaCO-CHAIRMAN INDUSTRY COMMUNICATIONS & POLICY

John MeyerCohocton, New YorkCHAIRMAN FINANCE

Contact info: United States Potato Board 7555 East Hampden Avenue, #412 Denver, CO 80231 Phone: 303.369.7783 Fax: 303.369.7718

Industry Website: www.uspotatoes.com

Consumer Website: www.potatogoodness.com www.facebook.com/PotatoesTatersAndSpuds www.youtube.com/user/PotatoGoodness

International Buyer Website: www.potatoesusa.com

Seed Export Website: www.usseedpotatoes.com

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Domestic Marketing:Big Win for Potato Industry: Continued improvement in attitudes and consumption! Consumption of potatoes increased from 74 annual eatings per capita in 2010 to 75 eatings in 2011, according to NPD’s 2011 National Eat-ing Trends study. This steady increase is very encouraging news after seeing a significant jump in 2010 (from 67 annual eatings in 2009).

Additionally, the 2011 USPB Attitudes and Usage survey shows only 19% of consumers now hold negative attitudes about potatoes—a dramatic drop from 35% in 2004. Both of these critical metrics indicate consumption and attitudes toward potato nutrition have returned to their pre-“low-carb” numbers.

These major improvements signify long-term demand building efforts have taken hold, and consumers have responded to the positive nutrition messages championed by the USPB and the rest of the US potato industry.

Meet our Target Audience: “Linda” “Linda” is a woman with kids who:

• Is comfortable in the kitchen and enjoys cooking for her family

• She likes to ex-periment and try new recipes

• She cooks frequently throughout the week (approx. 5 days per week)

• She prefers to cook with fresh rather than frozen

• Linda has a traditional approach to cooking

• She buys a lot of the same brands and makes a lot of the same meals her mother did when she was a child

• Her family influences the brands and products she buys

• She is a medium-user of potatoes and serves them 1-3 times per week

Linda represents approximately 35 million US women (15% of adult population). However, she influences nearly 117 million people, or nearly one-third of the US population, as the gatekeeper of food choices for herself, her husband and children.

Consumer Research: Potato Shopper InsightsThe USPB recently completed a landmark study: Potato Shopper Insights. This study was designed to better understand the motivations and influences of the potato shopper and identified opportunities for retailers to increase revenue by driving potato sales.

Potato Shopping TripsPotato shoppers are highly involved in preparation activities for grocery shopping trips. The potato shopper is more likely than non-potato shoppers to:

• Check circulars or ads before shopping (54% vs. 48%),

• Regularly use coupons (48% vs. 44%)

• Consider themselves to be a savvy shopper (32% vs. 27%).

• Plan meals in advance before grocery shopping (38% vs. 28%).

• Plan meals carefully to ensure the whole family will eat the dish. In fact their purchases are more influenced by the preferences of family members (31% vs. 24%).

• Enjoy shopping more

• Be more engaged in the shopping experience

• Consistently purchase many more items than planned

• Make six more shopping trips per year

• Spend an average of $1,560 more on groceries each year

This study clearly demonstrates the high value of potato shoppers to retail-ers. To capture the attention of shoppers during their trip preparation, retailers should:

• Feature potatoes in circulars and coupons to appeal to potato shoppers and showcase value and variety to drive additional purchases.

• Use circulars and online methods to emphasize the preference for potatoes by everyone in the family as well as offer quick and easy recipe ideas that the whole family will love.

• Encourage greater potato consumption by communicating meal ideas and inspiring new uses to drive conversion in-store, given the increasingly planned nature of potato purchases, it is just as important for retailers too.

“Many Sides of Potatoes” Ad Campaign Breaks through the Clutter and Resonates with Linda“The Many Sides of Potatoes,” advertising campaign continues to build momentum in its second year. The campaign focuses on the key oppor-tunity areas to increase Linda’s consumption of potatoes, as identified in the Consumer Segmentation Study, including new usage ideas for dishes that can be made in less than 30 minutes. These flavorful recipe ideas highlight the fresh and natural equities of potatoes and drive read-ers to PotatoGoodness.com.

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The potato recipe message also reaches Linda online where she is actively searching for dinner ideas. Quick and healthy potato recipes are advertised to Linda on the most highly trafficked recipe websites: AllRecipes.com, FoodNetwork.com, MyRecipes.com and BHG.com. The recipes are also featured on PotatoGoodness.com, providing Linda fresh ideas for dinner at her fingertips.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!

• The total FY12 advertising cam-paign will reach 78% of Linda’s eight times during the program year through 33 ad insertions in nine publications.

• Total estimated impressions = 144 million

• The online advertising cam-paign has generated more than 133,000 interactions with Quick & Healthy recipes (recipe views, downloads and/or print-outs). The number of people who clicked on the banner ads is two times higher than industry standards.

• Added value opportunities (e.g., supplemental ads, recipe contests, etc.) equal more than $1,000,000, or nearly 70% of the paid investment.

Nutrition Research Continues to Build the Case for PotatoesThe USPB’s foundational nutrition science program serves to protect the positive nutrition profile of the potato. Scientific research provides a timely and credible resource for media and influencers.

Potatoes are the Largest and Most Affordable Source of Potassium of any Vegetable or FruitUSPB-funded research using National Health and Nutrition Examination Survey (NHANES) data was announced in September 2011. It demon-strated potatoes are the largest and most affordable source of potassium of any vegetable or fruit. A nationally distributed press release and events at the American Dietetic Association’s annual Food & Nutrition

Conference & Expo, featuring lead researcher Dr. Adam Drewnowski, kicked off the media blitz.

Potatoes and DiabetesA second USPB-funded analysis of the NHANES data demonstrating there is no association between non-fried potato consumption and Type 2 diabetes will be presented at and publicized from the Experi-mental Biology Conference April 24, 2012, in San Diego, CA. The research was also accepted by the Academy of Nutrition and Dietetics (formerly the American Dietetic Association) Diabetes Care and Education Practice Group for a June 2012 presentation via webinar, which will be presented by Dr. Adam Drewnowski and USPB Nutrition Consultant Dr. Katherine Beals, RD.

Revised Potato Nutrition Handbook and New Nutrition Library HandoutsThe USPB updated its valuable Potato Nutrition Handbook to include new research and information presented since it was originally drafted in 2009. Relevant nutrition abstracts, including the topics of antioxidants, Glycemic Index, satiety/weight management, and potassium, that are both USPB-funded and non-funded, can be found in this valuable asset. The USPB also added a new series of Nutri-tion Library Handouts, highlighting how potatoes fit in the common discussions of heart health, weight management, diabetes childhood obesity, Glycemic Index, and the newly revised Dietary Guidelines. All materials are available for download at www.potatogoodness.com.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• More than 20 million print, online and broadcast impressions

resulted from publicity of the NHANES research.

• Reanalysis of the USPB-funded NHANES study focused on child potato data and helped fortify the industry initiative to keep potatoes in the National School Lunch and School Breakfast Programs.

Consumer Publicity Keeps Spuds in the National Media Spotlight

Leveraging the MyPlate Makeover ChallengeThe USPB participated in the Produce for Better Health (PBH) My-Plate Makeover Challenge, a program helping consumers understand how to eat according to the USDA MyPlate recommendations. Three new potato recipes were created showcasing the healthy role potatoes play on the plate, including Carnival Roasted Potatoes and Buffalo Chicken Potato Skins. The third recipe—a healthier version of tradi-tional Burger & Fries—became the center piece of a USPB January media push. The release has been picked up by 514 online outlets for

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34 million impres-sions. In addition, 82 print outlets ran the story, with more expected over the course of the next few months.

National Nutrition Month Potato BuzzDuring March 2012, the USPB reminded consumers nationwide to eat their potatoes during National Nutrition Month by leveraging media and blogger integration.

• Working with Tara Gidus, RD, the USPB coordinated a segment on the nationally syndicated television program the “Daily Buzz.” The Daily Buzz airs in 170 US markets and reaches more than 2 million households. Tara also included key potato nutrition information and recipe ideas on her Healthline.com blog, which reaches more than 1 million unique visitors per month.

• The USPB also worked with “Kitchen Play,” a group of top food and mom bloggers on a series of potato types blog posts. Recipes created by the bloggers included dishes like One Potato, Two Potato Roasted Potato Salad and Two Potato Beef and Vegetable Pot Pie.

Rising Success of Facebook Page and Weekly Recipe Email USPB’s increased online visibility and growing level of direct engage-ment with consumers has generated fan growth of nearly 50 percent on its “Potatoes, Taters & Spuds” Facebook page. At the end of FY11, the USPB’s Facebook page had 6,723 fans. Today, it has more than 13,000 and growing.

A February promotion on the page, a giveaway of 4,000 copies of the USPB’s new kid-and-mom-friendly Chef Solus Potato Party Color-ing Book, was a driving force behind much of the recent page growth. Additionally, a Labor Day Potato Salad Sweepstakes and a Holly Jolly Potatoes Photo contest contributed to increased consumer engagement and fan growth.

The USPB also continues to reach Linda through a weekly recipe email. The subscriber database grows each week by approximately 150 new sign-ups, for a total of more than 9,000 consumers receiving the email each week. The e-mail out-performs against industry standards with an average of 32% of recipients opening the e-mail each week (vs. 15%) and a click-through rate of 14.5% percent (vs. 6%).

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• As of March 2011, USPB reached more than 240 million

consumers with potato nutrition information and recipes.

• Potato Goodness Website Traffic: 157,000+ Unique Visitors ( July 1, 2010-April 1, 2011.)

• Potato Goodness on YouTube: 37,352 total video views to date.

• USPB’s “Facebook page has over 13,000 fans!

Increasing Fresh Potato Sales at RetailIncreasing demand for fresh potatoes by working with retailers and suppliers is the goal of the Domestic Retail Marketing program. This is accomplished through the Retail Outreach, Best In Class (BIC), Best Practice Partner (BPP) and Test & Learn programs; sharing insights, implications and proven best practices to generate positive results with all retail partners. This program also offers industry training programs and support to assist grower/shippers with becoming better partners with their retail customers.

The Best In Class (BIC) program is a three-year partnership with a retailer and their chosen supplier(s), where the USPB assists with implementing all core best practices (merchandising, pricing, promo-tion and assortment). Specific recommendations are provided to retail partners, and reviews are conducted quarterly to gauge progress and make course corrections as necessary. Current BIC partners include Safeway-Seattle and Meijer.

The Best Practice Partner (BPP) program focuses on optimizing one area of the retailer’s marketing mix over a nine-month period, again with the support of a supplier(s) selected by the participating retailer. The process begins with the USPB providing analysis and recommen-dations to improve potato category sales, and includes several check-points throughout the program period to assess progress and refine the approach as needed. Current BPP partners include Safeway –Phoenix and Roundy’s.

Test and Learn programs focus on exploring and validating poten-tial new best practices for increasing category sales, such as enhanced in-store communications, sampling programs or promotional offers. Meijer and Roundy’s are currently Test & Learn partners.

Retail Outreach presentations engage retailers in a face-to-face meet-ing where the USPB shares category trends, shopper insights and proven best practices to grow their fresh potato category. In addition, a business review analyzes their sales versus the competitive market and

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identifies specific opportunities for volume growth.

Deli Outreach presentations are a brand-new initia-tive, building on the momentum of the USPB’s foodser-vice programs and utilizing the successful retail outreach format. These face-to-face meetings share food-service trends and shopper insights along with a first-of-its-kind “potatoes in the deli” business review to provide recommendations for increasing sales of potato salads and sides.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• The success of the BIC program and category performance at

Safeway-Seattle led to an additional opportunity to assist Safeway-Phoenix as a Best Practice Partner.

• By implementing assortment, merchandising and promotional recommendations, BIC partner Meijer continues to outperform their competitive market in the potato category.

• A retail outreach meeting with Roundy’s spurred their interest in improving potato sales, and their request to become a Best Practice Partner.

• Meijer expressed the challenges they had experienced with implementing fresh potato demos, and welcomed the opportunity to participate in a Test & Learn program with the USPB to optimize in-store sampling and assess the longer-term impact it can have.

• Roundy’s has agreed to participate in a Test & Learn program to explore highly-targeted consumer offers, including leveraging their loyalty card data to identify high-potential households and monitor the resulting behaviors.

• 20 Retail Outreach meetings have been conducted, meeting with the following retailers: Spartan Stores, Walmart, Sam’s Club, Delhaize America (Food Lion, Hannaford and Sweet Bay), Kroger, Giant Eagle, Brookshire, SUPERVALU, Winn-Dixie, Target, H.E.B., Whole Foods, A&P, Roundy’s, Harris Teeter, Marsh, Save Mart, Hy-Vee, Wegmans and Big Y.

• Five Deli Outreach meetings have been held, with meetings conducted with A&P, Safeway, Kroger, Delhaize and Meijer.

Preparing the IndustryUSPB offers the industry bi-monthly web-based industry training sessions to help grower/shippers become more valuable partners to their retail customers, focusing on an array of relevant marketing practices to help contribute to increased potato category demand creation. In addition, the USPB Resource Center is continually updated with information on category performance, consumer research, merchandising elements and other tools to help build and manage fresh potato category sales. This site can be accessed through www.uspotatoes.com.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• Six web-based trainings were conducted in FY12. All training

sessions are recorded for later viewing and are available on the USPB Resource Center.

• Category Management Tools Training

• More Effective Promotions for Fresh Potatoes

• How Linda Shops: Insights Into the Potato Shopper

• Best Practices in Potato Merchandising

• Potatoes in the Service Deli

• New Insights Drive Shopper Marketing

Driving Potato Innovation at FoodserviceThe final Q4 2011 Mintel Report on potato menu trends showed the number of potato side dish menu mentions at the Top 350 restaurant chains grew 3% in 2011 (versus Q4 2010) and 13% from Q4 2006.

Culinary Seminar Generates New Potato Items for High Volume Restaurants and Food ManufacturersNow in its seventh year, the “Menu Innovations with Potatoes” invitation-only seminar is the cornerstone of the USPB foodservice program. Held in October at the Culinary Institute of America in

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Napa Valley, the two-day, accredited program demonstrate potatoes’ selling power on the menu to chefs from leading foodservice chains and food manufacturers. This year’s seminar was themed “Mediterranean Inspiration, Contemporary Innovation.” Chefs took a culinary odyssey through the Mediterranean and the California Wine Country, with demos by special guest chef Todd Humphries from The Kitchen Door in Napa and a custom presentation on potatoes in baked goods by the San Francisco Baking Institute.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• Within the last six months: Oceanaire Seafood Room introduced

Loaded Tater Tots; Hard Rock Café is testing Smashed Potatoes; the Cheesecake Factory is adding a California Chicken Salad with Potatoes to their menu; and Legal Seafoods in Boston is serving Punched Potatoes with Octopus. Additionally, Oceanaire acquired the Morton’s Steakhouse chain in January 2012, and the CIA alumnus just added Twice Baked Au Gratin Potatoes, Chicago Style Horseradish Mashed Potatoes, and Parmesan-Truffle Fries to their side dish menu, giving the seminar even further reach.

• Over the past seven years, more than 50% of all seminar attendees have tested or added new potato dishes

• Chef participants of this year’s seminar represented:

• Eight influential chain operations, including Olive Garden, The Cheesecake Factory, Sonic Industries and The Hard Rock Café. All together, these chains represent over 7,789 units and $9.8 billion in annual sales.

• The US Air Force, which serves 2.6 billion meals annually, per region.

• Leading food manufacturers, ConAgra Foods and Schwann’s, representing over 400 items and $12.4 billion dollars in sales.

• The Darden Restaurant Group (Olive Garden, Red Lobster, the Capital Grille, Longhorn steakhouse, Bahama Breeze, and Seasons 52) produce team hosted their first culinary event with potatoes as the exclusive stars of the show. This was the direct result of the high rating the Olive Garden chef gave the seminar after attending this year. The Darden Group represents 1,900 restaurants and 400 million meals a year, and they use 60 million pounds of potatoes a year--40 million of which are fresh.

Public RelationsRecipe features and editorials in foodservice publications help drive healthy potato innovation. In January, a big win for potatoes came from a leading industry consultancy predicting 2012 would become the “Year of the Potato.” This prediction was picked up by Restaurant Business as well as other key publications. By fostering strong editor relationships the USPB places recipes and images of contemporary potatoes in the most-read chef publications year-round, keeping potatoes top-of-mind for menu developers when they are looking for new ideas.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• As of mid-March 2012, the foodservice publicity program achieved

over 3.7 million impressions in a marketplace with just over one million units.

The Perfect Potato: A foodservice guide to fresh potato typesTo increase demand for the full range of potato types available to chefs today, the USPB developed a guidebook to answer their most frequently asked questions, including preparation recommendations. This splash-proof, laminated guidebook is designed to be hung in kitchens, stuffed in apron pockets or added to recipe binders. It will be mailed to all 80+ Menu Innovation with Potatoes alumni to remind them about the versatility of potatoes and a downloadable version of the book will also be available on Prochef.com/potatoes and potatogoodness.com/foodservice.

NATIONAL FRY PROCESSOR TRIALS: Program Generates First Series of ResultsIn the first year of the National Fry Processor Trials (NFPT), three trial sites were selected: Washington, Idaho and North Dakota, and beginning in early 2012, the trial sites were expanded by 40% to include Wisconsin and Maine. Attributes to be captured will remain identical and include acrylamide, asparagine, sugars, tuber characteristics and field observations. Ranger Russet and Russet Burbanks will remain the industry standards.

The second round of acrylamide results have been received back from the University of Wisconsin. It appears 80% of the top 20 selections from the first analysis remain as top performing clones. The first round of asparagine information has been completed by the U of WI. Analy-sis of the information is ongoing to determine the correlations between sugars, acrylamide and asparagine.

The NFPT program will push beyond the project commitments and scope with quick service restaurant (QSR) Product Runs. Simplot has agreed to process 15 to 20 of the top performing clones. QSR testing is an imperative to the qualification of any clone that would become com-mercially viable and this represents a “big” win for the NFPT program.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• Results produced from the 2011 NFPT trials have been excellent,

with numerous clones expressing acrylamide levels significantly lower than the Burbank and Ranger check varieties. After two rounds of acrylamide analysis, thirteen clones have been selected for QSR Analysis.

• Simplot will conduct QSR analysis and consumer testing on thirteen clones from the 2011 trials. These clones will be evaluated to determine their ability to produce QSR-like finished product. Burbank and Ranger will serve as the check varieties.

• The clone selections for the 2012 NFPT trials have been finalized. The list of clones to be tested will be expanded from 81 in 2011 to 86 clones in 2012.

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CHIP/National Chip Processing Trials (NCPT) ProgramFast Track Seed ProgramThe Fast Track Seed Program sold Lamoka and Nicolet seed from the seed inventory. The seed sale represents the second year seed has been sold from the program. The proceeds were reinvested into the Fast Track Seed Program to help cover some of the cost of producing the seed.

A processor/producer field day took place March 7, 2012, at Better Made Snack Food Company in Detroit, MI. The stars of the production were Lamoka from Michigan and Nicolet from Wisconsin. Supporting cast was Snowden from Michigan. The purpose of the field day was to give the industry the opportunity to view high potential clones in commercial process conditions, evaluate them versus industry standards and discuss additional program opportunities.

Stem-End Tuber DefectThe stem-end tuber defect is going to get more attention in 2012. The Chip Committee initiated a stem-end task force to investigate what else the chip industry can do to find a solution to stem-end defects.

The Chip Steering Committee is planning on increasing the budget allocation for the stem-end spending from the current level of $50,000 to $85,000 for FY2013. The additional funding will support recommen-dations made for additional research from the Stem-End Task Force.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• The Fast Track Variety Program (FTVP) sold a portion of NY139

(Lamoka) and W2133-1 (Nicolet) from the USPB seed inventory. Lamoka and Nicolet represent the 2nd and 3rd varieties to come out of the program for commercial application in the past two years. The seed from the sale will provide suppliers with the oppor-tunity to accelerate the commercialization efforts of these varieties, while the revenue generated from the sale will help the program recover some of the cost of the seed and commercialization efforts supported by the program.

• Stem-end tuber defect continues to be a significant concern for the chip industry and will be receiving more focus in 2012. The Chip Steering Committee initiated a Stem-End Task Force to increase the emphasis on finding a solution. This task force consists of eight industry representatives familiar with stem-end defect. The Steering Committee also requested increasing the funding level from $50,000 to $85,000.

• The NCPT trials have expanded from eight to 10 locations. Oregon and Texas will be added as new trial sites in 2012. The Oregon site will be funded through the Specialty Crop Research Initiative (SCRI) Acrylamide Grant.

• The NCPT processor program added a new manufacturing partner; the total participants now number 11. In 2012 process partners supported pre-commercial processing runs of Lamoka and Nicolet. These tests represent a vital process in the FTVP.

International Marketing:International Table-Stock Potato ProgramThe goal of the International Table-Stock Program is to build market awareness of the availability of US table-stock potatoes and to respond to consumer research aimed at better understanding perceptions in targeted countries.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• Seven new menu items made with US fresh potatoes

were adopted by restaurants in Malaysia

• Seven retail chains in Mexico and Malaysia increased US potatoes sales during promotions by more than 75%

• Thirteen participants from Mexico, Indonesia, Taiwan and Malaysia participated in an RTM to the US

• Best Practices at retail were tested with a super-market chain in Malaysia

• A maintenance program was initiated in Hong Kong and Singapore and continued in Taiwan

• Ten retail chains in Mexico reported a reduction in shrink thanks to the storage-and-handling training provided to their employees by the USPB

• Market access issues were addressed in Taiwan, Mexico, Indonesia and the Philippines, while the implementation of the South Korea-United States Free Trade Agreement (FTA) resulted in additional access for US potatoes to that market.

The international marketing program for table-stock potatoes focuses on increasing demand and usage of US potatoes at retail and food service. Increased demand at retail is generated through in-store promotions, expanding the numbers of varieties sold and improved marketing through the adoption of the USPB Best in Class program. By helping the retail outlets improve their handling practices, sales have increased and shrinkage reduced, resulting in increased exports.

In some USPB target markets, potatoes are not considered nutritious, so the international table-stock program focuses on providing positive potato messages. This is done through press releases, advertorials, cooking classes, TV programs, and promotional materials. Over

Salmon Filet on US Mashed Potatoes was introduced as a new menu item in Malaysia using US Russet potatoes.

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1 million consumers have been reached with these positive messages in the three target markets.

In November 2011, the fourth annual International Chef Seminar was held in Malaysia. This two day training and cooking event attracted 27 chefs from Malaysia. The chefs learned about US potatoes, potato nutrition and the use of US table-stock potatoes in different cuisines. Finally, they got to create their own dishes in a black box cooking challenge. Many of these chefs have already put the new dishes on their

menus with more to come. To date 90% of the chefs attending the four seminars have added at least one US potato dish to their menu.

A reverse trade mission brought 13 buyers to the US in October to help importers and distributors in target markets learn more about the US potato industry and see how and why the US is able to provide the best quality and variety of potatoes. This group got to see harvest, storage and packing at state-of-the-art facilities in Idaho. The importers and distributors then traveled to Atlanta to participate in the USPB International Table-Stock Symposium to learn more about the US industry and meet growers and shippers from around the country. The final day of the RTM was spent walking the floor at the Produce Marketing Association (PMA) Fresh Summit.

Market access is the biggest barrier to increased exports of US fresh potatoes. The USPB continues to work on establishing access for US table-stock potatoes to China, Indonesia, the Philippines and Japan while trying to gain increased access to Mexico, Korea, Thailand and elsewhere. The combined efforts of the USPB, NPC and State Potato Organizations has created new opportunities for US growers and is of the highest priority for all of the organizations.

International Frozen Program The goal of the USPB International Marketing Frozen Program is to increase consumption of US potatoes and potato products in export markets through increased market share and the introduction of new products and exploitation of new channels in existing markets.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• Forty-four restaurant chains in the target markets switched

to US frozen potato products from another source

• Six new channels were developed for US frozen potato products

• Thirteen retail chains in the target markets began carrying 17 new US frozen potato products

• Seven market access issues addressed and two resolved in Mexico and Korea

• Forty-seven positive messages about potatoes distributed to the trade and consumers in the target markets

• Thirty new items featuring US frozen potato products added to restaurant chain menus

• “Why Buy US” Frozen Fries program launched in all markets

The frozen program is the largest USPB International Marketing program as frozen potato products account for roughly 62% of total US potato exports. This program focuses not only on fries, but also promotes all other frozen potato products available from the US. This approach spurs new growth opportunities for US potatoes by increasing usage of and creating new channels for US frozen potatoes.

Vietnam was added as a target market to the international market-

RTM participants learned about US table-stock potatoes during field visits in Idaho.

Retail promotions are conducted to provide consumers with a taste of US potatoes, along with recipes and nutrition information.

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ing program for frozen potatoes in FY 2010. A new representative was hired to cover this fast growing market. Central America and the Dominican Republic were added to the inter-national frozen program in FY 2009. The program there has been very successful, with strong growth in export sales and a number of restaurant chains switching to US products.

In July 2010 an ambitious research project was undertaken to determine which factors restaurant chains in foreign markets utilize to make their purchasing decisions for frozen fries, as well as determining which attributes of US fries make them a more desirable choice. This research culminated in July 2011 with a set of recommendations for improved messaging as to why these companies should buy US. The “Why Buy US” program has since been refined and launched in all target markets.

The development of new channels for US frozen potato products has expanded demand and created net new sales beyond the traditional food service sector. These new channels include prepared products at supermarket delis, bulk sales at supermarkets, mini-marts at gas stations, pizza delivery chains, online shopping, wholesale public markets, kiosks and street vendors and food manufacturing.

A positive image for potatoes is important for continued sales growth of US frozen potatoes in target markets. The international program uses seminars and trainings for trade, consumer cooking classes, paid publicity, menu promotions, media events, websites, press releases and newsletters to create a positive potato profile in these markets.

The QSR market for frozen fries and other potato products is very competitive, with processors around the globe vying for the business. The international marketing program gives the US processors a distinct advantage in this process by providing value added services to those restaurants purchasing US frozen products. These services include cooperative promotional support focused on the launch of new products, as well as the addition of second or multiple fry items to menus. Employee training in proper storage, handling and preparation is provided, with roughly 1,000 outlets trained each year. The “Why Buy US” research confirmed the value added services from the US are one of the main reasons foreign restaurants remain loyal to the often times higher priced US products.

International Chip-Stock ProgramThe goal of the International Chip-Stock Program is to educate chip manufacturers in targeted foreign markets and build greater understanding of US chip-stock varieties, their characteristics and the technical requirements for import.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• One new foreign buyer began importing US

chipping potatoes in Vietnam, a new market for US potatoes

• Seven sample shipments were sent to chip processors in Thailand, Central America, Vietnam and Malaysia

• A trade mission with four US shippers went to Vietnam to learn about this new market and met with processors

• Market access barriers in Korea, Mexico and Taiwan were addressed, while barriers in Japan were overcome. The implementation of the South Korea-United States FTA resulted in increased access for US chipping potatoes

The potato chip industry is growing around the world, especially in Asia. However, foreign chip manufacturers are unfamiliar with US chipping potatoes—the varieties grown in the US, the year-round supply capabilities and the high quality. Many believe the longer ship-ping times and the use of storage potatoes make US potatoes inferior to freshly harvested potatoes. There are also a number of countries which are closed or have limited market access, such as Mexico, China, Thailand, Indonesia and Japan.

The USPB continues to work with snack food manufacturers in Asia and Central America. Educational and promotional materials were

John Toaspern, USPB Vice President of International Marketing demonstrates and trains USPB international representatives regarding the value of US XLF fries when compared to competitor fries, as revealed during the “Why Buy US” research project.

USPB chip-stock sample shipment upon arrival in Guatemala.

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provided as part of one-on-one meet-ings to determine their needs and interest in US chipping potatoes. Samples were sent to those companies that had not previ-ously tested them.

In December 2011 the USPB staff led a trade mission to

Vietnam for US growers and shippers to learn more about this new market and meet with processors. The team saw the domestic growing area of Dalat and visited processing plants. The US is currently ship-ping to two of the three processors in this market.

Exports of chipping potatoes to Japan began in 2006 and have since grown significantly with the expansion of demand and improved access. The USPB hosted a required visit by a Japanese Ministry of Agricul-ture official to Nevada and Montana to get these two states on the approved shipping list. Nevada began shipping in February 2012, and growers will now be able to purchase seed from Montana to use for commercial production of potatoes destined for Japan. The USPB and NPC continue to work with USDA-APHIS and FAS to improve ac-cess for US chipping potatoes to Japan, most importantly, allowing the US potatoes to be transported inland in Japan and processed at plants not located at a port.

In addition to the proactive market expansion efforts, the USPB and National Potato Council (NPC), in conjunction with State Potato Organizations, continue to work on overcoming market access barriers in Mexico, China, Indonesia and Taiwan. Gaining access to new mar-kets or overcoming barriers in current markets will result in significant increases in US exports.

International Dehydrated Potato ProgramThe goal of the USPB International Dehydrated Potato (Dehy) Pro-gram is to increase the use of US dehy in both commercial and food assistance programs throughout the world.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• Forty-six new

products made with US dehy were launched by foreign food manufacturers and restaurants

• One hundred and three new products made with US dehy are under develop-ment in target markets

• Three research studies were conducted to identify new uses or applications for US dehy in target markets

• Four new importer/ distributors in Malaysia, Japan and the Philippines began carrying US dehydrated potatoes or new US dehy products for the first time

• One purchase of 250 MT (35,831 cwt fresh weight equivalent) of dehy was made by the US government for the McGovern-Dole International School Feeding Program to be implemented in the Congo

• Market access barriers in Indonesia, Hong Kong, Thailand, and Taiwan were addressed, while the free-trade agreement with South Korea was implemented

The USPB continues to build a foundation of technical knowledge and information regarding the benefits of utilizing US dehy in a variety of applications. In FY 2012, consumer research on mashed potato attitudes and awareness were completed in Korea and Mexico, while messaging on the results of fish ball studies in the Philippines and croquettes in Japan was developed.

The results of these studies and other information were provided to the targeted audience through 40 one-on-one technical meetings and 17 seminars and trade shows. Additionally, materials were developed and distributed to provide details on the use of dehy in baking, food manufacturing and foodservice.

US growers visited growing areas in Vietnam during a USPB organized chip-stock trade mission.

Japanese Ministry of Agriculture Inspector visited Nevada to see the growing area.

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532012 Potato Statistical Yearbook · May 2012

The result has been more and more new products made with US dehy launched in the target markets including soups, donuts, croquettes, pizza, sandwich filling, ensaimadas (a pastry product from Spain), mashed potato side dishes and various bread products. Another impor-tant success was the introduction and resulting use of US dehy in new channels in target markets. These include: institutional food service sector, food manufacturing, convenience stores, retail and more.

As foreign manufacturers’ and bakeries’ demand for dehy grows so must the availability of US dehy in the target markets. In FY 2011, the USPB provided training to importers and distributors in the US, which also allowed them to meet with the US processors they represent. The USPB also conducts train-ings in target markets for the importers and their customers to help them better understand the properties and many uses of dehy.

The USPB develops and disseminates information to private voluntary organizations (PVOs) and US governmental agencies working to expand the use of dehy in US government international food-aid programs. The most effective marketing efforts are individual trainings and “demonstration projects” in the food-aid recipient countries with the PVO’s who distribute dehy in food-aid settings. Two PVO employee trainings are held each year; one for foreign based employees, often times foreign nationals, and the second for US based employees. With the constant turnover in personnel in these organizations, it is crucial to keep training the new people about dehy. Projects using dehydrated potato products are demonstrated, and the results are measured to determine how these might apply in food assistance settings.

International Seed Potato MarketingThe goal of the International Seed Potato Marketing Program is to increase demand for US seed potatoes in world markets.

MaXIMIZING rEtUrN oN GroWEr INVEStMENt!• Sixty international and US participants attended the USPB

International Seed Symposium

• Twenty-seven international importers and growers participated in the reverse trade mission to US seed growing areas

• Three new US seed potato varieties were grown in the target markets

• US seed potato variety trials are underway in Egypt, Burkina Faso, Nicaragua, Sri Lanka and the Congo

• New cut seed trials were continued in the Dominican Republic, Nicaragua and Sri Lanka

• In conjunction with US growers, maintenance program activities were conducted in Uruguay

• Market access issues were addressed in Egypt, Dominican Republic, Brazil, and Uruguay

The strategy for the seed program is to increase the knowledge of US seed potato availability, safety, quality and varieties among government officials, importers and growers. This is done by conducting a combina-tion of the activities listed below in each of our target markets: Nicara-gua, Sri Lanka, Brazil and Egypt. The USPB also carries out mainte-nance programs in the established markets of Honduras, Uruguay and Dominican Republic.

Another new initiative is to introduce the use of cut seed to target markets. The current use of single drop seed in most markets increases the cost of the seed and limits the supply available from the US. If cut seed is used, US growers will be able to meet demand in these markets better.

Variety TrialsUS seed potatoes are sent to target mar-kets to be planted and grown to show the viability and adaptability of US seed potato varieties to the local growing conditions and climate. Variety trials are an essential step in determining which US varieties will thrive in foreign markets. Results of these trials are also needed for the variety registration process in each country. The results are also used to promote US seed potatoes in the market. Seeing is believing!

The USPB works with international growers in Sri Lanka to educate them on cutting US seed potato varieties.

Individual trainings and “demonstration projects” in the food-aid recipient countries with the PVO’s who distribute dehy in food-aid settings are the most effective marketing efforts.

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Market DevelopmentThe international seed program makes regular visits to foreign markets to evaluate the variety trials, establish relation-ships with importers and growers and work on access issues. In FY 2012 teams went to Nicaragua, Burkina Faso, Sri Lanka, Egypt and Brazil.

Reverse Trade Mission The international depart-ment organizes a Seed Tour and Symposium every other year to show-case US seed potato

production practices and establish commercial relationships. During the Seed Tour, the USPB brings growers and importers from target markets

to visit US seed growing regions to get a firsthand look at US growing practices, seed certification, breeding and inspections. The Reverse Trade Mission (RTM) and International Seed Symposium held in August 2011 were the largest ever and resulted in a number of new sales of US seed potatoes.

Market Access Addressing market access issues is a key compo-nent of this strategy. The international department works with the NPC and state grower organizations to overcome these barriers. Most of the work is done with USDA-APHIS and FAS officials in the US and in foreign markets. The international department also works with importers to help them negotiate with their government from within.

US Potato Board variety trials planted in Egypt to determine adaptability of US varieties.

Reverse Trade Mission participants see US growing practices first hand in California.

International growers and importers learn about US seed at the USPB International Seed Potato Symposium.

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552012 Potato Statistical Yearbook · May 2012

USPB StaffPresident/CEo officeTim O’Connor President & CEO toconnor@uspotatoes.com

Robin Vest Angelo Executive Administrator rvest@uspotatoes.com

Debra Crane Administrative Assistant debra.crane@uspotatoes.com

Finance & Information technologyDiana LeDoux Vice President, Finance & Information Technology diana@uspotatoes.com

Pamela Lee Compliance Investigator leepamela@uspotatoes.com

Terri Boyd-Snell Audit Analyst terri.boyd@uspotatoes.com

Melissa Guzman Accounting & Compliance Administrator melissa.guzman@uspotatoes.com

Helga Cole Compliance Assistant helga.cole@uspotatoes.com

Industry Communications & Policy David Fraser Vice President, Industry Communications & Policy david.fraser@uspotatoes.com

David Fairbourn Manager, Industry Communications & Policy david.fairbourn@uspotatoes.com

Alexandra Imhof Asst. Manager, Industry Communications & Policy agrimm@uspotatoes.com

domestic Marketing Kathleen Triou Vice President, Domestic Marketing KTriou@uspotatoes.com

Meredith Myers Manager, Public Relations meredithm@uspotatoes.com

Beth Ayn Rognmoe Administrative Assistant BethAyn.Rognmoe@uspotatoes.com

International MarketingJohn Toaspern Vice President, International Marketing johnt@uspotatoes.com

Dinah Tobey International Marketing Program Coordinator dinah@uspotatoes.com

Teresa “T.K.” Kuwahara Manager, International Marketing (Dehy) teresak@uspotatoes.com

Sarah Mahler Manager, International Marketing (Chip-Stock, Asia Table-Stock, Seed, Market Access Program) sarah@uspotatoes.com

Susan Weller Manager, International Marketing (Frozen) susanw@uspotatoes.com

2010/2011 Board MembersCALIFORNIAKevin Johnston Kevin.bluejay@gmail.com

Brian Kirschenmann brian@kirschenmann.com

Sid Staunton sid@cot.net

COLORADOKen Burback burbackk@hughes.net

Roger Christensen neptune1992@gmail.com

Kurt Holland kurt@amigo.net

Rodney Lenz lenzfarms@pctelcom.coop

Monty Smith monty265@msn.com

FLORIDAPrim Parker Parker33@windstream.net

IDAHOCarl Ball carlball@ida.net

Dewey Crane cranefarmsllc@RTCI.net

Ryan Cranney ryan@safelink.net

Steve Elfering selferin@potandon.com

Jared Fielding fieldingjared@gmail.com

Jeff Gibson jeffgibson2@yahoo.com

Karlene Hardy hardy1@pmt.org

John Harper john@flyinghfarms.net

James Hoff idahjames@aol.com

Brett Jensen brettjensenfarms@gmail.com

Bevan Jeppesen bevan_michelle@yahoo.com

Brian Jones brian@sunvalleypotatoes.com

Rick Likes melanielikes@hotmail.com

Ray Matsuura rrfarm@srv.net

Wyatt Penfold spuds@buypotatoseed.com

Doug Ruff rufftimes@gmail.com

Craig Searle csearle@pmt.org

Garth Steed egsteed@yahoo.com

Brent Stoker bstoker@safelink.net

Alex Tiede Alextd9@hotmail.com

Ritchey Toevs wrtoevs@juno.com

Chris Wada chris@wadafarms.com

Jared Wattenbarger wattje@cableone.net

Lynn Wilcox lynn@wilcoxfresh.com

MAINEKeith Doyen wcdoyen@ainop.com

Keith Labrie kjlabrie@ainop.com

Alan Moir amoir@maine.rr.com

Bruce Roope roopefarms@ainop.com

MICHIGANAdam Culler adam@lennardag.com

Diane Hanson hansfarm@up.net

Shari Kitchen shari.kitchen@gmail.com

MINNESOTAJustin Dagen jdagen@wiktel.com

Pete Ewing ewingfarms@sherbtel.net

Lonnie Spokely lspokely@rrv.net

Thomas Wingard tcwingard@aol.com

MONTANASteve Cottom spudman44@hotmail.com

NEBRASKAJoe Thompson jthompson@bbc.net

NEW JERSEYMike Brooks Mbrooks7033@aol.com

NEW YORKJohn Meyer jmeyer8008@aol.com

NORTH CAROLINAEric James jamesbrosinc@embargmail.com

NORTH DAKOTATom Campbell tom@tricampbellfarms.com

Eric Halverson erich@blackgoldpotato.com

Carl Hoverson choverson@rdoffutt.com

Mitch Jorde qualityseed@gondtc.com

Ben Tucker tucker5@polarcomm.com

OHIOLaura Huddle jhs@henry-net.com

OKLAHOMAChris Slagell cslagell@yahoo.com

OREGONWayne (Skeeter) Amstad skeeteramstad@gmail.com

Lon Baley lonbaley@btfspuds.com

Dan Chin wongspud@centurytel.net

Marty Myers mmyers@rdoffutt.com

PENNSYLVANIANolan Masser nmasser@hughes.net

TEXASBruce Barrett barrettfarms@gmail.com

VIRGINIABruce Richardson ecapeville@aol.com

WASHINGTONKathy Blasdel kathy@kiskafarms.com

Rex Calloway rcalloway14@gmail.com

Molly Connors molly@basingold.com

Rob Davis robdavisfarms@centurytel.net

Jody Easterday jody@easterdayfarms.com

Greg Ebe greg@ebefarms.com

Larry Jensen lrayjensen@hotmail.com

Stacy Kniveton kniveton@eltopia.com

Diana Martinez svf51@hotmail.com

Randy Mullen RRMX3@aol.com

Chris Olsen twoos@cbnn.net

Mike Pink pinkfarm.md@gmail.com

Doug Poe doug.poe@centurytel.net

Reid Reimann reid.reimann@blackberry.net

Albert Stahl Albertstahl16@yahoo.com

Ted Tschirky tschirky@centurytel.net

Kevin Weber Kevin_weberfarms@me.com

Marvin Wollman marvin@whborg.com

WEST VIRGINIAJohn Grose jgrose_01@hotmail.com

WISCONSINShawn Bula Bula9696@yahoo.com

Mike Carter mikec@bushmansinc.com

Gary Hansen gary.hansen@rpespud.com

Rick Kantner rick.kantner@alsum.com

Ron Mach rmach7@gmail.com

Dick Okray dick@okray.com

IMPORTERSEd Barnhill barnhill.ed@cavendishfarms.com

Sanjiv Kakkar himalya@erols.com

Vernon Thomas Canada vmthomas@mccain.ca

PUBLIC REPRESENTATIVEMary DeMers mary.demers@syngenta.com