Sales of frozen potato products – be it French fries, tater tots, or hash browns remain steady even when consumers are faced with inflationary issue.
For context, it should also be mentioned that foodservice operators have returned to a faster expansion pace, and that will provide further go-to-market opportunities for processors.
The frozen potato industry is likely to continue posting a high growth rate globally; its market value is set to rise from USD67.27bn in 2023 to USD89.51bn by 2029, thus achieving a CAGR of about 5% during the forecast period. Despite this upbeat outlook, the newest figures for the first quarter of 2024 reveal some surprising turns in the short term.
The world’s leading French fry producers exported 1.10 million tons of fries and other frozen potato products to markets outside their respective local trading areas, which is a marginal decrease of 4,082.3 tons or 0.4%, compared to the same period a year earlier. This was essentially because of lower shipments of the large European fryers. The Netherlands, Poland, Germany, and Belgium were all in the red regarding export volumes, which trimmed the EU fryers’ external shipments by 4.4%, to 736,634 tons for the quarter.
Not all countries, however, report the same scenario. Fryers in North America, led by major increases in Canadian offshore sales, shipped 258,275 tons of frozen potato products to offshore markets during Q1 2024, a gain of 6.8% compared to the corresponding period of the previous year. Besides, other minor exporters such as Canada, China, France, New Zealand, and Turkey also reported double-digit sales increases for the quarter.
But what really made the difference was exceptional growth in China, reaching a record 39,643 tons of products shipped outside of greater China, up 13.6% compared with the prior year. This performance underlines the dynamics of the market and the opportunities for emerging players to make remarkable strides.
The competitive scenario is still intense, with key players striving to increase their market shares by way of product innovation, strategic partnerships, and geographic expansion. North America dominates the global market scene at present, with the United States leading the fray. This can be attributed to increasing demand brought about by busy, working consumers and the increasing popularity of convenience food products.
A global outlook
In Europe, Germany is one of the biggest food markets, along with having one of the highest consumer demands for convenience foods. Its market is further driven by the high distribution of domestic and international QSR establishments, which are heavy users of frozen potato products. India can be positioned as the largest player in the frozen potato market in the Asia-Pacific region. A large and young population, fast urbanization of the country, and improving standards of living all act as growth drivers.
The growth of international fast-food chains, coupled with the increasing use of frozen potatoes by local brands and street food vendors, contributed favorably to the market development in India. The product trend clearly indicates that the French fries’ segment is expected to have the maximum share in the market with a growth pace during the forecast period, owing to the globalization of fast-food chains and the convenience factor associated with frozen French fries.
Even the introduction of healthier options, like oven-baked or air-fried varieties, attracted health-conscious consumers. The commercial segment accounts for the largest share by market segmentation and is likely to continue being the fastest growing because it covers restaurants, fast-food chains, and catering services.
Frozen potatoes reduce preparation time and cost in commercial kitchens, adding value for high-volume operations. The global frozen potato market keeps on changing, and the dynamics of these changes, as they will play out across different regional markets, are very interesting to note when key players do all they can to stay competitive in this growth industry.