The Potato Processing Market is growing at a significant rate owing to the rapid growth and recovery of restaurants and fast-food chains from the COVID-19 pandemic. The growth in the sector resulted in a substantial rise in the consumption of frozen French fry products such as fries, diced potatoes, potato granules, and shoe strings. For instance, according to Restaurants Canada estimates, Annual sales at Canadian commercial foodservice establishments increased from $54.9 billion in 2020 to $61.4 billion in 2021. The market is expected to reach pre-pandemic levels by 2023 when the industry will reach $78.6 billion. The growth is further augmented by the increasing penetration of online food delivery services as they enable such restaurants to deliver food products even when restrictions are placed owing to the COVID-19 pandemic. For instance, food delivery service provider Uber Eats witnessed a 20% increase in the number of restaurant contracts in Japan during April 2020 owing to the rising COVID-19 restrictions. This resulted in an increase in the number of restaurants using Uber Eats from 17,000 to 20,000. In addition, Demae-can Co., one of Japan’s major food delivery operators, saw orders increase by 300,000 during March of 2020.
Potato processing typically involves numerous steps such as cleaning, peeling, washing, slicing, and blanching of fresh potatoes to create products such as French fries, chips, flakes, and starch. Processed potato products provide greater convenience in making popular foods such as French fries and potato snacks as the preparation time is greatly reduced. This allows restaurants, cafeterias, and catering companies to prepare large volumes of potato products in a short time. In addition, processed products such as potato starch are used for various applications in the dairy, paper, and oil & gas industries. In addition, as potato starch is 100% biodegradable, they are being used as a substitute for plastics such as polystyrene. Therefore, processed potato starch is being increasingly used in the manufacturing of biodegradable plates, dishes, and knives.
The Asia Pacific held the largest share of the Potato Processing market owing to the increasing penetration of quick-service restaurants and high potato production in the region. For instance, according to the United States Department of Agriculture (USDA), China’s fresh potato production was estimated to be around 99 million metric tons (MMT) in 2020. This was a 3% increase from the previous year owing to the expanding acreage. Meanwhile, according to the Indian agricultural minister, potato production increased by 51% over the previous decade. Besides, the potato output is anticipated to grow by 3% every year till 2050. The rising cultivation of potatoes helps ensure that processing facilities do not face a shortage of raw materials during production. Moreover, the rising potato cultivation also decreases the risk of shortages in the market, thereby ensuring prices of potato and potato products remain low. This not only increases consumer demand but also significantly raises the profit margins of the processing companies as raw material acquisition costs are reduced. The South American segment is also projected to witness lucrative growth during the forecast period owing to the increasing consumer demand for healthy and convenient food options during the COVID-19 pandemic. This is increasing the consumption of ready to cook potato products in the urban regions of major South American countries such as Brazil, Argentina, and Chile.
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Global Potato Processing Market Drivers
Increasing Popularity Of Vegetarian And Vegan Food Products In Developed Regions Is Anticipated To Fuel Market Growth:
The growing adoption of vegetarian and vegan food items in developed regions owing to the growing health consciousness and increasing concern towards animal wellbeing is anticipated to drive the demand for processed potato products during the forecast period. Moreover, ready to cook potato products such as fries, soups, and snacks are being labeled and marketed with labels such as ‘vegan’ or ‘organic’ to boost sales. It is estimated that around 1.5 billion people or 22% of the global population are vegetarians in 2022. Besides, the number of people following a vegetarian diet increased by 1.19 million in Germany between 2014 and 2021. Moreover, the high prevalence of vegetarians in emerging economies such as India is projected to further contribute to the growth of the market as the growing disposable income and urbanization are leading to rising demand for vegetarian ready-to-cook meals. Around 25% of the Indian population followed a vegetarian diet in 2021.
The Rise In Demand For Snacking Options During The COVID-19 Pandemic, Boosted Market Expansion:
The changing food consumption behavior of consumers during the COVID-19 pandemic is a major factor contributing to the growth of products such as ready-to-cook potato products. The increased willingness to spend on such food, combined with a lack of time to make the entire process to cook at home owing to the adoption of the work from the home system is the primary factor driving demand for ready-to-cook food. Consumers are looking for authentic and natural snack options with health and wellness attribute as a result of changing lifestyles, which is influencing per capita expenditure in savory snacks products, including potato chips. Moreover, as eating out in restaurants has declined owing to government restrictions, customers are looking for unique and intriguing flavors in the aftermath of the pandemic. During the forecast period, the emergence of innovative flavors in the midst of the pandemic crisis will drive the growth of the processed potato market.
In February 2021, McCain Foods Limited purchased a minority stake in Fiddlehead Technology, a data science firm situated in New Brunswick. Fiddlehead develops answers to some of the most complicated problems in the fast-moving consumer products business using machine learning. The investment is anticipated to boost the company’s supply chain management and procurement processes, thereby reducing costs and maximizing revenue.
The Major Players in this Market Include
The major companies in the Global Potato Processing Market include Agarfrost, Mc Cain, Idohoan foods LLC, Aviko BV, Lamb Weston Holdings Inc, AGRANA Beteiligungs-AG, Ore Ida, JR Simplot Company, Farm Frites, and Emsland Group.
Over the years, companies have mainly focused on procuring high-quality and processing-friendly potato variants from farms to produce processed potato products that provide superior taste and texture. They are then delivered to food service, or retail sector, from where they reach the consumers. However, the growing application of processed potato products in the manufacturing sector owing to their binding properties and increasing demand for French fries in fast food chains is causing processing companies to ramp up production. Therefore, business expansion is the primary activity being undertaken by the key players during the forecast period.
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