Potato Head Kids was a component of the 1986 anthology series, My Little Pony 'n' Friends, along with the Glo Friends & Moondreamers. Perhaps Hasbro over-reached a tad, along with Sunbow & Marvel Productions, by expanding on the Mr. Potato Head franchise. In effect, they created their own modern day version of Hanna-Barbera's Flintstone Kids, which premiered the same year, and had some of the same actors working on both shows (i.e. Kenneth Mars).
Since I was working during the day, I never watched the show, and I'm only looking at this for the first time. Check out the episode, "Potatolympics":
Marvel/Sunbow also did a Mr. Potato Head series, but this was taking the idea a step too far.