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Business, Financials
AP  
November 2, 2010

Farmers try to boost sales by landing on big menus

Illinois, USA — TED Higginbottom was happy to see a dish heavy on peanuts this week on the menu at an Asian chain restaurant, but he said the Mandarin Kung Pao didn’t land there by chance.

The 60-year-old Texas peanut farmer said his industry has pushed hard to get peanuts onto menus at restaurants like Pei Wei — a national, 163-location chain owned by P F Chang’s. Whether its peanuts, cranberries, oats or other products, producers have found that successfully marketing to national outlets can pay off with big sales.

“If not for organisations like the (National) Peanut Board, there would not be as many peanut farmers in the US,” Higginbottom said. “Some of them wouldn’t be in business.”

Some note that successfully wooing big chains can lead to pressure to reduce prices, but Higgenbottom said that wasn’t a concern for the peanut board. The organisation started as a decades-old quota system that set peanut farmers’ production levels and prices was about to end in 2000, throwing growers for the first time into a free market.

The board needed buyers — any buyers — and fast.

“All the sudden it became very important to that farmer to market his peanuts,” said Higginbottom, who farms near the West Texas town of Seminole and was a past chairman of the board.

The board raised fees from farmers, then began spending several million dollars a year promoting cooking with peanuts or derivatives such as peanut flour. The result is the number of top 500 US restaurant chains that have dishes with peanuts on their menus has increased by 39 per cent in the past four years and peanut butter almost 50 per cent, according to food industry data firm Technomic.

The organisation also works with universities to get peanuts onto their campus menus, Bob Coyle, a marketing team leader with the board, said.

“It helps obviously to increase the use of peanuts, but it also helps us in not just education, but in feeding a consumer that is going to become a bigger consumer in their lives,” he said.

Growers of some commodities, such as Canadian oats, don’t have such a sophisticated marketing arm.

“It’s something we need to get more involved with,” said Manitoba oat farmer Bill Wilton, president of Prairie Oat Growers.

But Canada’s oat farmers — who grow most oats sold in the United States — have benefited since the 1990s from research indicating that oats can help reduce the risk of heart disease. Canadian oat exports have more than doubled since the mid-1990s, according to the Canadian government.

“Basically when you realised that oats can lower cholesterol, that was really why oats jumped,” said Randy Strychar of Oat Insight, a trade publication.

Oats’ healthy reputation has won it spots on menus at restaurants such as Starbucks. Next year, it will likely snare farmers a giant new customer: McDonald’s plans to add oatmeal to its menus across the United States.

McDonald’s won’t say how much oatmeal it hopes to sell, but Wade Thoma, the company’s vice-president of US menu management, said it plans to buy a lot of oats. Sales in test markets have been good, and not just during wintry weather, he said.

“Despite having one of the hottest summers on record, we actually did really well continuing to sell oatmeal through the summer,” he said.

With 14,000 US locations, it’s a big deal to farmers when McDonald’s adds their product to its menu.

Almost 40 years ago, McDonald’s helped transform the egg business, introducing the Egg McMuffin.

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