Shortages of Processed Potato in APAC and Europe May Influence Fast Food Menus

Top Import Flows of Value Added Potato

Source: Tridge

In 2021, global processed potato imports totaled USD 7.98B, which was a 13.7% increase YoY. The US was the largest importer of processed potatoes, followed by France, the United Kingdom, and Japan. APAC countries imported a significant share of 42%. Behind APAC countries was the EU, where 33.3% of processed potato imports went to France, Germany, and Italy. Among the APAC countries, Japan stands out in imports with a total value of imported potatoes of USD 477.05M and 342,961 MT in 2021. Japan's imports of value-added potato increased by 3.65% YoY in quantity and 7.85% YoY in value for 2021. The Philippines followed Japan with 141,593 MT, Australia with 113,267MT, South Korea with 111,670 MT, and Malaysia with 67,819 MT. The primary consumers of processed potatoes are fast-food restaurant chains such as McDonald's, KFC, and Burger King. The french fries shortage caused changes in the menu. For example, in Japan, Burger King has resorted to replacing French fries with crunchy ramen noodles that the marketing calls the "almost-potato set." McDonald's has been forced to reduce portions. Japan is also attempting to diversify suppliers by importing potatoes from China.

Supply chain bottlenecks reduced domestic production, and COVID-19 regulations have contributed to shortages of processed potatoes. In Japan, the potato shortages were primarily due to US potato production decreases as the US is the number one supplier to Japan, with 248,398 MT delivered in 2021. More on Japanese potato shortages can be found here.

Although Western Europe leads the way in the processed potato sector, Asia-Pacific is expected to be the fastest-growing region in the forecast period, with a 4.73% growth from 2022-27. In the Asia-Pacific region, potato is grown in about 7.3M ha, producing about 121.7M MT of potatoes (average productivity of 16.49 MT/ha). The contribution of the Asia-Pacific region to the world area and production of potatoes is 39.3% and 37.7%, respectively.

It is worth noting that not every type of potato can be used in the processing industry. For example, the best potato variety for French fries is Russet potatoes (Russet Burbank). For chips, it's best to use Maris Piper potatoes. McDonald's officially widened the acceptable varieties to the Clearwater Russet and Blazer Russet, and a total of seven varieties are approved for frozen French fry potatoes.

The extent to which the global economy is connected and the food industry is dependent on trade can be seen in the example in the United Kingdom. Due to the Russia-Ukraine conflict, with the addition of Brexit complications, food processors face shortages of ingredients needed for Britain's fish and chips. The UK depends heavily on importing cooking oil from Russia and Ukraine. At the same time, the necessary fertilizer for potato production mainly comes from Russia, and the price has tripled. The recent heatwaves have also affected domestic potato production, compromising production quantity and quality. Prices of french fries in the UK may also face increases.

The potato processing market sells processed potato products by entities (organizations, partnerships, and sole proprietors) that refer to convenience potato products primarily made by washing, peeling, size reduction, and removing defective matter. These processing steps involve a comprehensive combination of heat treatments, cooling, dehydration, and frying systems or freezing stages.

The lifestyle, tastes, and importance of potato consumption are changing. In the post-COVID period, consumers are returning to old habits, shifting to easy-to-prepare meals and fast foods involving many processed potatoes. The shortage of potatoes is alarming the food processing industry, but a large part of it could have been solved by improved logistics and diversifying suppliers.