April 12, 2004
Doing the mashed potato | Mars Hill-based Naturally Potatoes continues to see growth in value-added spuds
By Rebecca Zicarelli
It's been a busy few years for Rodney McCrum and the crew at Naturally Potatoes in Mars Hill. Just two years ago, the company, which makes fresh sliced, diced, shredded and mashed potatoes that are refrigerated instead of frozen, had 55 employees and about $7 million in annual sales. (See "A new potato paradigm," April 15, 2002.) Its products were sold to food service companies, restaurants and retailers along the east coast.
Today, Naturally Potatoes is a $15 million company that employs 77 people, with salaries that range from $25,000 to $100,000. And while overall business has increased about 75% over the last year, McCrum says mashed potato sales are up 435% and still climbing. A $1 million plant expansion that will increase the mashed capacity from 3,000 pounds an hour to nearly 7,000 pounds an hour is just wrapping up. And in November, McCrum's sales territory crossed the Mississippi River for the first time. "We're taking Maine potatoes to the Idaho boys," he says.
McCrum says he and the 13 other farmers who founded the company in 1997 originally envisioned providing an alternative for working moms who don't have time to boil potatoes for dinner. But McCrum soon realized he didn't have enough advertising money to penetrate the grocery store market fast enough to keep up with his debts. He found another ready market in the food service industry, where hospitals, colleges and restaurants are willing to pay for a high-quality product that takes the labor out of serving fresh potatoes and eliminates the grainy texture of frozen products. Today, retail sales are only five percent of the company's total revenues; the food-service industry, including restaurants, institutions and food distributors, accounts for the other 95%. "We're blessed that people are accepting our mashed potatoes over competitors," McCrum says of customers that include Ruby Tuesday, 99 Restaurants and Pizzeria Uno.
A key factor in Naturally Potatoes' success is its approach to the potato, which as a commodity was a mainstay in Aroostook County's economy. "We do not sell a commodity," McCrum says. "We sell a service. Anybody can sell a commodity. We do whatever we can to make [our customers] competitive so that they can return money to their owners."
Building a brand
As part of that approach, Naturally Potatoes develops recipes for chain restaurants, and just hired a chef to develop products like a new oiled and seasoned diced potato the company will introduce in May.
"It takes a high level of customer service and support" to survive in the food service industry, says Steve Schimoler, president of the Research Chef's Association and general manager of culinary business development at Sysco Corp., the Houston, Texas-based food service giant. "That includes culinary support on the development side as well as on the customer side, particularly with value-added food. The restaurant business is moving toward convenience platforms in all categories of their menus ˆ it's how much value [suppliers] can add to products in the back of the house where customers can't see the difference; the customer doesn't necessarily appreciate that an onion in their soup was cut by hand. It's a labor issue, and always will be. Do you want to spend big bucks on a chef and have him peeling potatoes? But [value-added products have to have] a level of quality equal to or better than what the restaurant can do on their own. It has to taste great."
Tim Hobbs, director of development and grower relations for the Maine Potato Board in Presque Isle, says the shift to customer service is catching on throughout Maine's potato industry. "There's been a realization that we really need to find out what customers want and give it to them," he says. "Earlier in the potato industry, when Maine was one of the biggest players, you grew table stock. Today that's not necessarily so. It needs to be the right variety, quality, and tailored to specific uses."
While processors have long worked to meet customer specifications in the frozen categories, making McDonald's French fries or Lean Cuisine's roasted potatoes to each company's specifications, their ability to respond quickly with a fresh product is a relatively recent development. According to Schimoler, fresh, value-added products make up one of the most rapidly growing niches in the food service industry.
To take advantage of that growth, McCrum, a fourth generation potato farmer, spends a third of his time on the road, bringing the word of Naturally Potatoes to restaurants across the country. "The biggest challenge is helping people understand that Maine grows potatoes," he says. "They think there's only one potato and that's from Idaho. But we aren't trying to create a Maine brand, we're trying to create a Naturally Potatoes brand," says McCrum.
His goal for Naturally Potatoes remains unchanged; he'd like to see it become a $50 million company by 2008 or 2009. And with that, he hopes to create a reliable market for Maine potatoes, and good paying jobs for Aroostook County. "People are leaving here in droves because there are no jobs," he says. "We can sit around and cry about it and wait for somebody ˆ wait for a French fry guy to come save us ˆ or do something ourselves."
Today, Naturally Potatoes is a $15 million company that employs 77 people, with salaries that range from $25,000 to $100,000. And while overall business has increased about 75% over the last year, McCrum says mashed potato sales are up 435% and still climbing. A $1 million plant expansion that will increase the mashed capacity from 3,000 pounds an hour to nearly 7,000 pounds an hour is just wrapping up. And in November, McCrum's sales territory crossed the Mississippi River for the first time. "We're taking Maine potatoes to the Idaho boys," he says.
McCrum says he and the 13 other farmers who founded the company in 1997 originally envisioned providing an alternative for working moms who don't have time to boil potatoes for dinner. But McCrum soon realized he didn't have enough advertising money to penetrate the grocery store market fast enough to keep up with his debts. He found another ready market in the food service industry, where hospitals, colleges and restaurants are willing to pay for a high-quality product that takes the labor out of serving fresh potatoes and eliminates the grainy texture of frozen products. Today, retail sales are only five percent of the company's total revenues; the food-service industry, including restaurants, institutions and food distributors, accounts for the other 95%. "We're blessed that people are accepting our mashed potatoes over competitors," McCrum says of customers that include Ruby Tuesday, 99 Restaurants and Pizzeria Uno.
A key factor in Naturally Potatoes' success is its approach to the potato, which as a commodity was a mainstay in Aroostook County's economy. "We do not sell a commodity," McCrum says. "We sell a service. Anybody can sell a commodity. We do whatever we can to make [our customers] competitive so that they can return money to their owners."
Building a brand
As part of that approach, Naturally Potatoes develops recipes for chain restaurants, and just hired a chef to develop products like a new oiled and seasoned diced potato the company will introduce in May.
"It takes a high level of customer service and support" to survive in the food service industry, says Steve Schimoler, president of the Research Chef's Association and general manager of culinary business development at Sysco Corp., the Houston, Texas-based food service giant. "That includes culinary support on the development side as well as on the customer side, particularly with value-added food. The restaurant business is moving toward convenience platforms in all categories of their menus ˆ it's how much value [suppliers] can add to products in the back of the house where customers can't see the difference; the customer doesn't necessarily appreciate that an onion in their soup was cut by hand. It's a labor issue, and always will be. Do you want to spend big bucks on a chef and have him peeling potatoes? But [value-added products have to have] a level of quality equal to or better than what the restaurant can do on their own. It has to taste great."
Tim Hobbs, director of development and grower relations for the Maine Potato Board in Presque Isle, says the shift to customer service is catching on throughout Maine's potato industry. "There's been a realization that we really need to find out what customers want and give it to them," he says. "Earlier in the potato industry, when Maine was one of the biggest players, you grew table stock. Today that's not necessarily so. It needs to be the right variety, quality, and tailored to specific uses."
While processors have long worked to meet customer specifications in the frozen categories, making McDonald's French fries or Lean Cuisine's roasted potatoes to each company's specifications, their ability to respond quickly with a fresh product is a relatively recent development. According to Schimoler, fresh, value-added products make up one of the most rapidly growing niches in the food service industry.
To take advantage of that growth, McCrum, a fourth generation potato farmer, spends a third of his time on the road, bringing the word of Naturally Potatoes to restaurants across the country. "The biggest challenge is helping people understand that Maine grows potatoes," he says. "They think there's only one potato and that's from Idaho. But we aren't trying to create a Maine brand, we're trying to create a Naturally Potatoes brand," says McCrum.
His goal for Naturally Potatoes remains unchanged; he'd like to see it become a $50 million company by 2008 or 2009. And with that, he hopes to create a reliable market for Maine potatoes, and good paying jobs for Aroostook County. "People are leaving here in droves because there are no jobs," he says. "We can sit around and cry about it and wait for somebody ˆ wait for a French fry guy to come save us ˆ or do something ourselves."
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