There are a lot of potatoes this year, they are cheap and it seems that you can’t find a buyer for them? There are buyers!
Immediately 26 well-known retail chains became participants in the Contact Exchange, which took place on January 25 as part of the exhibition “Potatoes and Vegetables Agrotech” at the stand of the Potato Union. Vegetable purchasing department specialists gathered in the cozy hall of the Potato House to find responsible suppliers of quality products for their stores.
Wanted: large, tasty and safe
What kind of potatoes were retail chains looking for? Of course, the one that will be in demand among buyers.
“In our region, the best sold white potatoes are caliber 6+, beautiful, smooth, without external defects,” says a representative of the Samara retail chains Pelikan and Almond. Sergey Gudkov.
The VkusVill chain had fewer requirements for the appearance of its products. “We purchase from manufacturers quite large potatoes, 55+, and not dirty, which have undergone a dry cleaning procedure,” the product manager highlights the main selection criteria Nikolay Malakhov. This retailer pays much more attention to the taste of the product. “Potatoes should be moderately starchy, moderately dense, moderately boiled,” shares information Nikolay Malakhov. “Our office has a huge kitchen, and this allows us to try all the products that we plan to sell,” continues the specialist, “we will boil potatoes from a potential supplier, taste them, see what happened to the tubers after heat treatment and whether they have any "some internal defects."
An equally important product quality parameter for VkusVilla is safety, so all samples are tested in three different laboratories for residual content of harmful substances that could be used during cultivation.
Bulk or packaged?
Each product has its own buyer - representatives of retail chains are unanimous in this opinion. There should always be a choice in the store, even if there is not much space on the shelf. “We cannot afford a very wide range of products, because the average size of VkusVill stores is only 80-100 square meters. m. But we always offer potatoes by weight and potatoes in “house” packaging, in 2,5 kg packaging,” comments Nikolay Malakhov. – When the grilling season begins, we offer our customers baby potatoes in vacuum packaging, which are easy to bake outdoors. The frozen section always has potato wedges with various spices, which is also very convenient and in demand.”
In hypermarkets there are no problems with space, but there are certain difficulties with the assortment - the segment of packaged products in a number of regions is not sufficiently developed. Reason: reluctance of farmers to invest in equipment for washing, filling and packaging.
“There is a growing demand in stores for packaged washed potatoes,” notes the purchasing and development manager at Lenta. Alexander Kokush, – people are willing to pay for quality, variety of types of packaging and characteristics of the product itself. But at the moment, the needs of customers for premium products are completely covered only in the large cities of Central Russia, but in the south, and especially in the Urals and Siberia, much remains to be done.”
The expert is confident that agricultural producers who today sell potatoes only in bulk are missing a real opportunity to make money. “My message to farmers: we need to develop, introduce new products, offer, for example, more types of packaging. This will make it possible to compensate for the loss of margin from the sale of the shaft,” says Alexander Kokush. – If the consumer wants to get inexpensive potatoes in bulk, let him buy inexpensive ones. Expresses a desire to pay for beautiful packaging and clean hands, give him this opportunity. Everyone benefits from this. And the manufacturer needs to be flexible and respond to market demands so that the retailer works with him directly, rather than turning to traders.”
The company's results in expanding the packaged products segment are already very impressive. “Our stores offer five articles of private potato brands, and these are not temporary packaging, but brand names,” informs the specialist, “we cover the needs of customers for potatoes for boiling, frying and baking; We offer Farmer’s Select White and Farmer’s Select Red.”
And more about the lack of equipment
The Russian chain of fast food cafes “Kroshka-Kartoshka” (which took part in the Contact Exchange together with retail chains) is also ready to communicate with manufacturers directly. Every day she uses about 10 tons of potatoes, but only large tubers are needed for cooking, and this often becomes an obstacle to cooperation. “All farmers are interested in the full-scale sale of what they have grown. We only accept tubers weighing from 300 to 500 g, and this requires certain labor costs for the manufacturer,” states the director of the purchasing and logistics department of the Kroshka-Kartoshka Group of Companies. Alina Akisheva. – If the farm has automated calibration lines installed, it is not difficult to make a selection. Otherwise you have to calibrate manually.”
Today, the Kroshka-Kartoshka Group of Companies more often works with resellers who offer products of the required fraction, but by the end of the storage season (and in lean years even earlier), the network faces interruptions in supplies, and therefore is open to offers from those who need a distribution channel very large potatoes.
Variety as a brand
When going to the store to buy potatoes for dinner, the buyer rarely thinks about what type of crop he would like to purchase. Does this mean that it doesn’t matter to the trading network what varieties the agricultural producer supplies it with?
“For a retailer acting as an aggregator, the grade is really not important,” explains Alexander Kokush, - but the retail chain can highlight certain varietal features of products, advertise them and thus turn the variety into a brand. As an example, we can recall Sineglazka, very popular in the Soviet years.” According to the expert, in the same way now it is possible to promote some promising modern variety, and many retailers are already beginning to practice such solutions, because it is very important for the store that people come back for a specific product. But success can only be achieved with the joint interest of the manufacturer and the network. The variety that is advertised must be constantly available for sale.
The head of the Potato Union staff also spoke at the meeting about the importance of promoting individual varieties - domestic selection Tatiana Gubina. “The current situation requires producers to reorient themselves towards Russian varieties,” she emphasized, “but there are many of these varieties, but few seeds. Among the entire list, you need to select the “stars” that seed growers will propagate, and for this you need to understand what will be in demand. We want to dedicate this year to this work. We will position Russian varieties as a product with increased value, because we believe that our native product should sell better. We will work together with retail chains to highlight the products on the shelf - and we hope that we will attract the attention of buyers.”
Geography of supplies
According to the Kommersant publication, prices for cargo transportation in Russia increased by 2023% in 40, and most likely the growth will continue. In such conditions, retailers are forced to limit the range of suppliers, taking into account the remoteness of certain enterprises.
As noted by Alexander KokushOf course, all retail chains strive to purchase goods in their regions. This rule is broken if local becomes insufficient.
“We meet a significant share of the needs of the Almond and Pelican stores with products grown in the Samara region,” says Sergey Gudkov, - but there are periods when the entire volume of local potatoes is taken over by federal networks. In order not to be left with empty shelves, we communicate with suppliers from other regions, and not always the closest ones geographically. Now, for example, we are working with potato producers from Chuvashia, and in this case, the quality of the product and the attitude of our partner towards their work more than compensate for transport costs.”
The VkusVill retail chain is ready to start working with a supplier from a remote region if this allows them to supplement the line with a special product. “At this session, a potato producer from Karachay-Cherkessia contacted us; the farm’s fields are located at an altitude of 2,5 thousand m, the products are grown in a virus-free environment, practically without PPP treatments,” he gives an example Nikolay Malakhov, “and we see potential in these potatoes; we can offer them to customers as a premium product.”
Many retailers traditionally incur additional costs annually for the delivery of early potatoes from the southern regions (Krasnodar Territory, Astrakhan Region). At the same time, no one undertakes to supply the products of the autumn harvest from the storage facilities of Central Russia to the south, where potatoes are stored worse, and already in the spring there is a certain shortage. This niche - in the absence of government subsidies for transportation - is filled by imports.
Secrets of cooperation
However, retail chains expect to receive the bulk of potatoes from Russian suppliers and are committed to establishing long-term, mutually beneficial partnerships.
“Prices for potatoes and vegetables change every year, today there are cheap potatoes on the market, but expensive cabbage, and in a year everything could be the other way around,” he says Sergey Gudkov, – our task is to provide customers with quality products in any circumstances. And we are determined to negotiate with the manufacturer so that he is interested in working with us.”
“For a retailer today it is very important to work directly with the manufacturer, this guarantees the necessary volumes and quality of goods,” I agree with him Alexander Kokush“That’s why all retail chains are opening departments to work with farmers, introducing preferences for them, and launching agricultural contracts.”
In 2024, Lenta also plans to offer agricultural producers to grow products to order; the terms of the agricultural contract have been carefully worked out so that they are beneficial to all participants. “What is the essence of the agricultural contract? – Explains the purchasing and network development manager. – The retailer invests money to obtain goods of the required quality and volume at an inexpensive price. At the same time, the manufacturer acquires a sales guarantee and an understanding of what profit he can count on. It is very important that the amount ultimately earned is not below the market, that is, less than what farms that are not bound by contractual obligations earned by selling the product throughout the season. An agricultural contract should not be a one-sided game.”
“Agricultural producers may have negative experiences interacting with retail,” continues Alexander Kokush, – circumstances are different, and the human factor sometimes works. But it is important to understand that not a single retail chain is interested in strangling its supplier.”
For those who once failed to find a common language with networks, the specialist recommends that they objectively assess the situation, perhaps work on mistakes and start again. Sometimes this is a difficult step. “When a manufacturer gets up every day at 4 am and goes to work in the field, he loves his product like a child, and it is difficult for him to convey that these products are not of network quality. – The expert comments. – For parents, children are not bad, but the chain focuses on the needs of customers. When a buyer sees that a product is mechanical, the store will not sell it and will suffer losses.”
The trading network will not donate money to the manufacturer, this is not a charitable foundation, emphasizes Alexander Kokush, but it will provide an opportunity to earn it, it is ready to rebuild, taking into account the interests of farmers
“You can work with networks,” he is convinced, “those who want to, work.”