Global Processed Potato Market Size, Share, Growth &...

Global Processed Potato Market Size, Share, Growth & Demand 2031

Posted 2024-03-13 11:24:15

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Global processed potato market has reached a value of USD 65.4 billion in 2023, and is anticipated to reach USD 98.11 billion by 2031, projecting a CAGR of 5.2% during the forecast period 2024–2031. The market is experiencing remarkable growth, driven by changing lifestyle, the influence of social media, peer influence, fast-paced life, and a growing emphasis on dynamic culture. Potato processing is a very underrated mechanism and is used by many industries. It has a very large market and is still growing rapidly.

The market is witnessing increasing demand for various types of processed potatoes. Key market players in the industry offer a wide range of options catering to different preferences of the consumers. The availability of various types and forms further fuels the growth of the market. The market is continuously expanding as the brands are innovating and introducing a new range of products to their existing product line and keeping the consumers hooked to their products.

With the increasing demand for processed potato and the introduction of new products comprising processed potato from distinct types and forms, the global processed potato market is anticipated to witness a rise during the forecast period.

Expansion of Quick Service Restaurants and Fast-Food Outlets Drive the Market

The establishment of quick-service restaurants and fast-food franchises has majorly contributed to the demand for the processed potato market. Various potato-based snacks such as potato cutlets and french fries are staples, being served in quick service restaurants and fast-food franchises owing to their popularity and ease in serving and cooking in the fast-food service business models. Potato-based dishes are a mainstay on quick service restaurant menus around the world as there are cheap and easy to prepare. The versatility and universal acceptance have led to the popularity of the potato processing industry. Renowned and very famous quick service restaurant chains like McDonald’s, KFC, and Burger King have all integrated potato-based products into their offerings.

For instance, McDonald’s has incorporated processed potatoes in its menu in the form of Fries and Hash Browns; while KFC offers Fries, Mashed Potatoes, Pot Pies, and Family Meals.

Lamb Weston Holdings, Inc., the world prime brand in producing high quality potato products, along with its European joint venture Meijer Frozen Foods B.V., launched its latest innovation in processed potato market- REALLY Crunchy Fries at the Gulfood held at the Dubai World Trade Center on February 20th, 2023.

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Standardization and High Costs of Transportation May Hinder the Growth

In the quick service industry, the maintenance of taste and standardization is extremely important. The consumers resonate with the fast-food brands due to the taste thus, the maintenance of taste of the products becomes extremely important. It forces the brands to follow pre-defined processes, various quality checks, and import of potato from the source location and during a particular time of the year. For instance, while making of McDonald’s hash browns and fries, it begins with sourcing of fresh potatoes, which are checked at multiple stages to make sure they meet McDonald’s standards. They are cleaned and peeled before being rechecked for blemishes or imperfections.

The chains bear higher transportation costs and ensure proper storage to increase the shelf life of the imported potatoes. Therefore, cost of transporting processed potato products to international markets is high and increases the price of the product. It specially resonates with the products that require cold storages, for instance, frozen potato fries. High freight and storage costs make the processed potato products very less competitive in the market and producers face difficulty in surviving in the markets.

Asia-Pacific Holds Dominance in the Processed Potato Market

Globally, China dominates the processed potato market. Due to its strong agricultural supply network, potatoes are grown in China, which is the largest potato-growing region in the world, followed by Europe.

As per the Food and Agriculture Organization, world’s total potato production amounted to 376 million tons, with China contributing the maximum out of all regions, amounting to 94 million tons followed by India, amounting to 54 million tonnes. Thus, these two nations were the largest producers of potato in 2021, making Asia-Pacific, a leading producer of potatoes worldwide. FAO indicated that, globally the total area harvested in 2021 stood at 18,132,694 hectares.

Following Asia-Pacific, 122 million tonnes of potatoes are farmed throughout Europe, ranking it second in world in potato production. The European Potato Processors’ Association, coined that out of Europe’s total production, 52 million tons of potatoes were produced in the EU, with 37 million tonnes being grown in Belgium, France, Germany, the Netherlands, and the United Kingdom. The value of processed potatoes produced in Europe exceeds 10 billion euros.

Potato being the fourth most vital food crop in the world, it is consumed everywhere around the globe, thus, making the processed potato market a larger market in the world.

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Frozen Potato Holds a Larger Market Share in Terms of Volume

Globally, frozen potato dominates the processed potato industry. As per the World Potato Markets, in 2019, Europe’s exports in totality of processed potato products, flakes, frozen, dehydrated, and flour, including chips, were a whopping USD 1.95 billion. Frozen fries and other frozen potato specialities represented a total of 75% of the overall exports of potato products which amounted to USD 1.46 billion.

According to USDA National Agricultural Statistics Service, in the United States, in 2017, around 170 million cwt of the total potato usage of the United States were used in frozen potato products, including frozen fries, spiral fries, tater tots, home fries, frozen whole potatoes and wedges. It was greater than other usages of potato in the United States, including fresh potatoes, chips, dehydrated, canned, and livestock feed.

In November 2023, McCain expanded its consumer base by launching its new innovated product, Baby Hasselbacks, which is frozen, vegan, and gluten-free. McCain’s Baby Hasselbacks come in a 653g bag with skin-on, pre-sliced whole baby potatoes and a flavour sachet with sea salt and cracked black pepper. Customers can use it to cook the potatoes to their own personal tastes and liking of the seasoning.