Benelux Bumper Crop Relaxes Prices,
After Sky-high Levels the Year Before
A From-the-Field Report By JOHN M. SAULNIER QFFI, Chief Editor & Publisher

Aviko’s Steam Fresh line of potato products has been well received as an alternative to french fries by a number of UK school foodservice operators, reports Dick Van der Aart, marketing manager of the Dutch company.

A return to “normalcy,” whatever that may mean these days, is welcomed alike by processors and buyers of finished potato products. Expanding markets, both in Europe and in the developing world, are increasingly hungry for value-added spuds ranging from fries to mash.

What a difference a year can make in the potato business world!

The Benelux tuber crop of 2007 was robust in terms of volume and overall quality, resulting in lower prices for both raw materials and finished products.

“It was the reverse situation of 2006, when a very big increase in potato costs came in October. For deliveries made during the following January to March period, buyers paid more than 30 cents a kilo. At the moment, the price is approximately 10 cents lower,” Guy Van den Broeke, managing director of Leuze-en-Hainaut, Belgium-headquartered Van den Broeke-Lutosa, told Quick Frozen Foods International (QFFI) on November 26.

One would not know that end-user prices had fallen, however, when settling the bill for a quick meal taken at a roadside Friteur in Flanders or elsewhere in Belgium, where menu prices for a serving of pommes frites never seem to drop. But to be fair, perhaps the fry cuisine proprietors are serving up larger portions of spuds these days. Belgium’s native class of original fast food operators, after all, perfected the practice of super-sizing french fry orders long before marketing maestros under the Golden Arches began promoting the value-for-money concept.

Mr. Van den Broeke estimated that the overall supply of processing-grade tubers in northern Europe was up by between three and four percent. “There are more than enough potatoes on the market,” he informed QFFI. “Tonnage yield per hectare for the Bintje was especially good, as was size and dry matter content. Production of other varieties in France, Germany and the Netherlands was also on the upswing.”

Dick Van der Aart, marketing manager of Steenderen, Holland-headquartered Aviko NV, confirmed that the Dutch harvest was abundant and generally of good quality.

“The potatoes are of the right size for production of long-length fries demanded by the market,” he told QFFI on December 5. “But the texture of some potatoes is both hard and soft simultaneously, which means that we have to pay extra attention when processing to assure the best possible finished products.”

For those who do not read the Cyrillic alphabet, Griboyed is the pronunciation of this new Aviko product distributed in the Russian market. Translated literally as “Mushroom Eater,” the popular ethnic dish features potatoes, mushrooms and other ingredients.

The increase in supply, fortunately, is coming at a time when demand appears to be on the rise as well.
“It’s not a booming market, but consumption is increasing again,” stated Mr. Van der Aart. “It is up perhaps two percent in Europe overall, driven by favorable economic conditions across the EU in general, and strong demand in central and eastern Europe. It starts at the cafeteria, then extends to quick service outlets, and beyond to family restaurants and fine dining establishments. And as Aviko is largely a foodservice-oriented company – with about 70% of our business generated among restaurant, catering and institutional clients – when that sector performs well we are walking on the sunny side of the street. With a rising economy, fortunately, there is again room for most everybody in the supply chain to earn a bit of money.”

In the United Kingdom, however, apparently the sun is not shining as brightly for french fry producers as it is across the channel on the continent. In Britain the market for fried potato products is estimated to be off by more than five percent. This has been attributed in large part to a shift in buying among school foodservice operators, whose downsizing or even near banishment of fried food portions on menus means that chips are now typically offered to students no more than once weekly.

“We try to fill that gap with our chilled Steam Fresh assortment, which ranges from classic potato halves and quarters to mini baby and sauté potatoes. They can be oven-prepared quickly, and are much easier for kitchen personnel to manage than cooking from scratch,” said the marketing manager. “But, no doubt, we have lost plate presence in UK schools to pasta and rice. School foodservice providers have also lost out, as youngsters increasingly go outside the cafeteria for lunch. Let’s hope their choice is something more nutritious than candy bars.”

Perhaps the academic “food police,” in their zealous quest to slim down overweight pupils, should take a different approach to regulating campus cuisine. Why not offer students fries and other products that they like to eat, but which have been prepared in ways deemed to be more “healthy” by nutritionists?

Japanese consumers eat with their eyes as well as with chopsticks, and this Pom’Pin potato specialty from Lutosa is as eye appealing as it is tasty.

Aviko has been active in a number of markets with its Fridéale chips, which contain 33% less fat after frying and markedly less saturated fat than traditionally prepared french fried potatoes. Sales doubled last year, and in 2008 the company will extend the line.

Further accentuating and building upon product ranges beyond fries and like offerings, the company continues to broaden its presence in the meal component and ready meals sectors. Last year success was achieved in Holland with its Stamppot range of homestyle mashed potatoes with vegetables and cheese. Distribution among Dutch retailers is now nearly 80%.

“The challenge is to maximize sales during the cold weather months, as these dishes are consumed primarily during the autumn and winter,” said Mr. Van der Aart. “We have boosted television advertising and in-store promotions to heat up demand.”

But that’s not all that is on the front burner. This February will see the launch of three new value-added dishes featuring potatoes, grilled vegetables and cheese. The assortment will be positioned along with other ready meals in supermarket reach-in cabinets, rather than in open island frozen food cases where fried potato products and other snacks are typically merchandised in the Netherlands.

Looking eastward, the Aviko brand extension in Poland continues to be profiled on products other than potatoes. “While consumption is still growing in restaurants, we see the market for french fries leveling off,” said Mr. Van der Aart. “When dining at home people tend to prefer more familiar kinds of carbohydrates, such as pierogies.”

As such, Aviko has introduced a number of the dumpling products in 450-gram retail packs. Shaped in half-circular form, they are stuffed with savory ingredients that include meat, cabbage and potatoes, as well as feature sweet strawberry and blueberry fillings.

Meanwhile, a specialty dish called Griboyed, was recently introduced to the Russian market. The name literally translates as “Mushroom Eater,” which is apropos as mushrooms account for 30% of the potato-based ready meal.

“Mushrooms, which are as popular in Russia as are peas and carrots here in Holland, go well with potatoes,” said the marketing manger. “This recipe appeals to local tradition, much the way that pierogis appeal to Polish consumers.”

Far East Potato Feast

Lutosa’s Patat’Zoo offering of formed potatoes is as popular with the children of Japan as it is with youngsters in Europe and other markets around the world.

Van den Broeke-Lutosa has also made the long march east. The trail reaches well beyond the Urals, and does not end in China, where the company has operated from a Shanghai office for some time now.
Japan is a country in which Lutosa has done business since 1981, when its first container of Pom Parisiennes was received. By 2007 volume neared 5,500 tons, and expectations are for a surge in shipments in 2008 that will top 8,000 tons.

Handled as a direct sales market since 2004, in 2005 Lutosa established a subsidiary in association with Bernard Delecourt, a Belgian national with more than 20 years of business experience in Japan.
“It was set up to approach customers and potential clients, including restaurants and mass retailers,” explained Mr. Delecourt. “Today we have around 10 major customers, primarily restaurant chains, distributors and supermarkets. We sell mostly french fries, but interest in specialties is increasing.”

While Japanese customers initially asked for Russet variety potatoes, which was a challenge for Lutosa to supply, in recent years they have become familiar with and more accepting of the Bintje. In 2008, the proportion of Bintje sales by Lutosa in Japan is expected to reach 80%.

“All of our efforts of the last few years are paying off, and we see more customers coming to us,” said Françoise Saint-Ghislain, marketing manager. “Many customers want CIPC-free products, which require better planning and storage. They also want to know everything about the farmers and the fields from which raw materials are sourced.”

Lutosa says that one advantage it has over North American competitors in Japan is flexibility for making products on demand at the company’s factories in Belgium. The necessity for great attention to detail goes without saying for anybody exporting to the exacting buyers of the Pacific island nation.

“Japanese customers insist that everything must be perfect,” said Ms. Saint-Ghislain. “For example, they request specific validity dates for each shipment, and their tolerance for broken or damaged cartons is zero. The number of claims from Japan is higher than from any other market. When a problem arises, they expect immediate explanation and solution. We can only succeed here through full commitment of the entire company.”

As Lutosa, which became a member of the Pinguin Group last September, prepares to mark its 30th year in business in 2008, it will also use the occasion to celebrate two other major milestones: doubling annual volume to over 300,000 tons of finished products during the past decade, and doubling the number of countries to which it exports to 87 in the last six years. Indeed, Lutosa potato products are now available in A to Z nations around the globe – from Australia to Zambia.

Another Belgian producer of frozen potatoes that is increasingly penetrating far-away export markets is Mouscron-based Mydibel. The private label specialist packs about 105,000 tons of finished products a year, which go to retail, foodservice and industrial buyers in 62 countries.

“The 2007 harvest was very good, compared to the disastrous crop the year before,” Philip Scheirlynck, sales manager, told Quick Frozen Foods International. “And thanks to the availability of cheaper processing potatoes, we can export more despite competitive pressure caused the weaker dollar.”

Mydibel distributes Puree Complete potato granules in 2.5-kilogram boxes as well as in smaller 125-gram retail packs.

While buyers are currently paying less for finished products, the price is above levels charged four or five years ago. Meanwhile, the rising cost of everything from energy and cooking oil to packaging materials and labor means that end-users are likely to see higher prices again next autumn – if a bumper crop across most of Europe’s potato belt does not flood the market with cheap raw material.

In business since 1988, the family-owned company’s frozen and chilled product line runs the gamut from 6/6 Shoestrings, 9/9, 11/11 and 14/14 Pommes Frites to 10/20 Steakhouse Frites and Crinkle Cuts. Spicy Wedges are also offered.

In recent years, production of flakes have been stepped up in the unit where frozen puree specialties such as Potato Croquettes, Potato Noisettes, Pommes Ardennaises and other products are made.
A third operation, the Gramybel unit, runs lines that turn out granules and flakes – good for 24,000 tons of finished product per annum. Mashed potatoes are packed in retail boxes, foodservice pouches and industrial bulk bags.

Looking ahead to prospects in 2008, Mr. Scheirlynck expressed optimism. “We are confident that demand for our Bintje-based products will continue to grow internationally, and our team is prepared to fill orders precisely according to customer specifications.”