Chipperbec U

Chipperbec U is a virtual learning experience that communicates the story of Chipperbec potatoes. Learn about the product’s history, growth, viability and uses as well as the value in the lifestyle brand that comes with our product. Wade in…the water’s nice.

History

Chipperbec potatoes have been developed over the past 40 years by America’s most experienced potato farmers to meet all of the demands of today’s restaurant chefs.

While Chipperbecs are the worlds greatest frying and chipping potato, they are also a wonderful potato for mashing, potato salads, potato pancakes, shepherd’s pies, and more.

And as for vitamins and minerals, white potatoes are stuffed with vitamins C, B6, niacin, folate, potassium, manganese, magnesium and phosphorus.

Not a Kennebec

The Chipperbec potato is a brand of a white round potato variety, which has been commonly referred to as a “Kennebec” or “Kennebec-style” potatoes in recent years.

The actual Kennebec, a specific variety of white potato, existing today as an heirloom crop, is no longer grown in mass quantities and the word “Kennebec” has incorrectly been used in the industry as a general term for white chipping potatoes.

What factors drive restaurants' choice of frying potatoes?

Many factors come into play.

Quality

Taste & Texture
Cooks up crisp on the outside, fluffy inside, earthy flavor

Size & Shape
Appropriateness for final application (skinny, waffle cut, steak fry)

Appearance
Lack of blemishes.

Freshness
Absence of damage, rot, greening, sprouts.

Plate Longevity
Not a significant factor in choice among fresh potatoes, but is a major factor when choosing between fresh vs. frozen.

Performance
Quality & performance is reliable through the year, with no noticeable difference from new potatoes to storage potatoes, or different growing regions.

Availability
Whether or not the the restaurant’s vendor can guarantee year-round supply.

Consistency

Relationships

Vendor Relationships
Chefs are loyal to vendors who provide great service.

Corporate Contracts
Purchases may be dictated by a purchasing department. Vendors must bid on items or contracts, taking choice out of chef’s hands.

Cost
Does the price make financial sense? A fine dining restaurant may be willing to pay more than a quick-service establishment.

Price

The restaurant must balance quality, consistency, & relationships with price.

Cost as a Factor VS. Other Considerations

Cost is crucial to the decision making process, but must be balanced by quality, consistency, and relationships. Why is cost such a dominant factor? In restaurants that sell french fries, they are usually the category sales leader. As such, they must be high profit. Profitability relies on obtaining a consistent price on potatoes. We can divide restaurants into two categories:

Quality-Driven Restaurants
Quality-driven restaurants distinguish themselves by offering the best possible products with consistency over time. Customers often prioritize high quality over low price. These restaurants typically charge a bit more and can afford to spend more on a higher quality potato.

Quality-driven restaurants want to serve a great product at a good price. They seek out the best possible product, and can pay more for it. These restaurants can charge a premium for their offerings as their clientele prioritizes quality over paying the lowest possible price.

Value-Driven Restaurants
In value-driven restaurants, customers are typically very price-sensitive. Quality must equal that of competitors, but not necessarily rise above. These restaurants are willing to use cheaper, commodity ingredients to increase profit margins.

Value-driven restaurants want to serve a good product at a great price. Their clientele wants value, and doesn’t want to pay a premium for something great.

How Potential Problems Affect Chefs' Decisions

Cost is crucial to the decision making process, but must be balanced by quality, consistency, and relationships. Why is cost such a dominant factor? In restaurants that sell french fries, they are usually the category sales leader. As such, they must be high profit. Profitability relies on obtaining a consistent price on potatoes. We can divide restaurants into two categories:

External Problems

Inconsistent product quality
chefs must switch to a new product or seek out a vendor that carries the desired product. Chefs may compensate in-house with adjusted cooking times, or by hand-sorting potatoes. This can lead to added labor, waste, and stress!

Supply Chain Problems/Seasonal Disruption
Chefs must scramble to locate product. If the product is subject to frequent disruptions, chefs will seek another solution.

Vendor Issues
Mismanagement on the vendor side can result in poor inventory control (leading to shorts or substitutions), or delivery disruptions. The chef may seek out a new vendor if problems persist.

Price Fluctuations
Restaurants must raise prices or accept a lower profit margin on sales.

Internal Problems

Training
Poorly trained cooks can have several negative impacts including diministed quality of finished product, increasedp roduct waste, and inefficiency; leading to increased labor cost.

Inventory control
Raw product. Under-ordering leads to unavailable menu items & customer dissatisfaction. Over-ordering causes spikes in food cost, and/or spoilage.

Inventory Control
Finished product. Chefs mis-manage the prep process for fries, and have too little or too much inventory.

Labor Cost & Profitability of French Fries

Compared to cost of goods, labor is a significant factor for items in the “side dish” category.

CATEGORY COGS LABOR
Main Dishes High Low
Dessert Low High
N/A Beverages Very Low Very Low
Side Dishes Low High
French Fries Very Low High

Exactly how much labor goes into an order of fresh-cut fries?

It can take up to 10 hours (includes inactive time) for a prep cook to process 6 cases of potatoes (300 lbs raw). That’s about 700 orders of large fries at McDonalds.

At the national average cook wage of $12.14/hour (source: indeed.com), the labor cost per portion is about $0.17

In major cities, restaurants are paying more, up to $20/hour. This raises the labor cost per portion to $0.29.

Fully loaded labor cost to the employer could be up to 40% higher, driving the labor cost per portion as high as $0.40.

At $30/case, COGS for the same portion is $0.26.

Labor and goods contribute roughly equally to the cost of an order of fresh cut fries.

Restaurants love french fries because the COGS is low vs. other vegetables and starches, fries have nearly universal popularity, easily executable for the kitchen and simple preparation alleviates allergen concerns.

Of the food items, main dishes are the largest portion, with expensive ingredients such as meat driving the COGS up. The menu price is high, so labor is proportionally low.

Desserts and side dishes are smaller portions, and tend to use lower cost ingredients. The menu price is also lower. They require about the same amount of labor as the main dishes, making labor proportionally high. Non-alcoholic beverages come with a high mark-up and require almost no labor.

Profitability of Fries vs. Similar Menu Items
Restaurants rely on side dishes to increase profitability.

  • Low cost items translate to high profit
  • Lower overall COGS helps the restaurant hit budget
  • Side dishes are an important way of increasing revenue. A customer will order one entree, but may order multiple side dishes
  • Side dish sales raise check average, increasing profitability

Extra revenue from side dishes can push a transaction from break-even to profitable.

Comparing french fries to other side dishes – Fresh cut fries generally have a much lower COGS than other popular side dishes, but require more labor.

COGS vs Fresh Cut French Fries Labor vs Fresh Cut French Fries
App, Mozzarella Sticks, FRZ Much Higher Much Lower
App, Popcorn Lower Much Lower
Bread, Rolls or Biscuits Equal Lower
Pasta, Mac & Cheese Much Higher Lower
Potato, Baked Equal Lower
Potato, Baked Equal Lower
Potato, Hash Brown Lower Lower
Potato, Mashed Mucher Higher Lower
Potato, Tater Tots, FRZ Higher Lower
Veg, Asparagus Much Higher Lower
Veg, Green Salad Higher Much Lower
Veg, Mushrooms Much Higher Lower

Improving Overall COGS

How Chipperbec can improve overall COGS vs. simply reducing price of the raw material

Improve Consistency Year-Round
When quality drops due to seasonal changes, chefs must adjust processing to compensate for variations in starch content. During the adjustment period they may experience higher waste.

Graded/Sorted Potatoes
Irregular sizing increases waste.

Too large: Potatoes are too wide to fit in the fry cutter. This leads to product loss (discarding potatoes or smashed edges that cannot be served).

Too small: restaurants may discard too small potatoes. Small potatoes do not fill the serving vessel as well as large potatoes. Restaurants compensate by adding more fries to fill the container.

Eliminate Damage
Blemishes, scarring, or bruising increase waste in the kitchen. In addition, damaged product requires more labor to sort damaged potatoes.

How Chipperbec can help streamline prep/labor to increase profitability vs. other products

Fresh Cut Whole Potatoes
Control for potato size results in higher yield & lower labor (no need to sort or trim potatoes in the kitchen). This process ensures high quality to reduce product waste.

Pre-Cut & Soaked Fries
Chefs can eliminate hours of labor vs. cutting & soaking in house. This intermediate step between whole potatoes & frozen fries still requires considerable labor (blanching, cooling, & portioning). Where space & equipment are limited, pre-cut provides a strong option. Pre-cut potatoes are an excellent resource for high-volume outlets where COGS is less of a concern, for example banquets or catering.

Frozen Fries
This option provides maximum labor savings but much higher COGS and is best for quick service restaurants & small spaces.

Fresh Cut VS. Frozen

Considering frozen products vs. fresh from the labor & processing cost perspective

Fresh
As covered in the Labor Cost & Profitability section, we know that labor cost per portion can easily exceed the cost of the raw material. Potatoes are relatively inexpensive, but require considerable processing.

Steps involved in taking fresh potatoes to the plate

  1. Wash/cut whole potatoes
  2. Rinse/Soak/Drain
  3. Blanch
  4. Cool
  5. Contain/Portion for final cook

Frozen
Costs are the inverse of fresh. Frozen product has a much higher COGS, but requires no processing labor. The cook must simply open the bag, cook, and serve. In addition to reducing labor, frozen products can help a restaurant maintain low overhead.

Serving frozen fries vs. fresh cut requires less space and equipment.

Fresh vs. frozen, other considerations

Storage Space
Does the outlet have more dry storage & refrigeration for fresh, or freezers for frozen?

Budget
Processing fresh potatoes requires considerable work space & equipment (fryers, racks, trays, sinks, containers).

Delivery Schedule
How many days/week does the restaurant receive deliveries from the produce vendor or broadliner? Is one choice more practical than the other?

Pricing Potential
How much will the market bear? Should the restaurant go fresh?

Labor Market
If hourly wages are high (major cities, union houses) restaurants may choose frozen.

Cachet
Upscale restaurants may boast “never frozen” while a fast casual concept needs to keep labor lean.

Volume
If a restaurant serves 50 guests per night, fresh cut might be perfectly sustainable. If the same restaurant triples their volume, they may need to choose the more efficient frozen product.