Market Monitoring Frozen Potato Products: 2023 developments

Mathieu Geuskens
Published on
May 2, 2024

In this monthly Frozen Potato Products update, our analysts will share valuable insights about the Frozen Potato Products industry. Frozen potato product consumption increased by 2.9% in 2023, with clear signs that supply was unable to meet demand. Trade prices increase by 24% year-over-year, whilst the traded volume contracted slightly, showing that producers favored higher priced domestic and export markets. Looking ahead, we expect consumption growth of 3.5% per year.

Market monitoring of frozen potato products

Market monitoring helps agrifood companies to objectively evaluate their current position within the market and the development of that position. Furthermore, it helps to spot new growth opportunities and whether the market is saturated.

For the A-INSIGHTS Market Monitor, we analyze the global trade in frozen potato products on a monthly basis. Derived from local customs agencies and statistics offices, the data gives us insight into monthly trade volumes and prices for all major importers and exporters. Combined with our sector expertise, we can provide you with an up-to-date view of the developments in the global frozen potato market.  

Frozen potato consumption increased by 2.9% in 2023

In 2023, global frozen potato consumption increased by 2.9% compared to 2022, reaching 17.3 million tonnes. Consumption increase was driven by the out-of-home segments, whilst retail consumption declined slightly as the last pandemic effects were lapsed. Despite this, retail consumption continues to show growth compared to pre-pandemic levels.

Figure 1. Global frozen potato consumption in th. tonnes

Consumption increase was visible in most geographies, but some markets incurred a pressured supply due to below-average 2022 crops in key consumption regions in North-America.

Between 2018 and 2023, the global consumption of frozen potatoes exhibited steady growth, with an annual increase of 2.4%. The Middle East, Asia, and Latin America emerged as rapidly growing regions in the consumption of frozen potatoes. This growth was primarily propelled by increasing GDP per capita, leading to higher consumption per capita. Despite this upward trend, these regions still lag significantly behind Europe and North America in terms of absolute consumption volumes. Conversely, Oceania experienced a notable decline in consumption during the same period, remaining unable to return to pre-pandemic levels. The primary cause for this decline was poor crop years resulting in supply shortages, hampering the region's ability to recover.

Figure 2. Frozen potato consumption volume in th. Tonnes during 2023, and 2018-2023 CAGR

Supply was unable to meet demand: prices increased by 24% and trade volumes flattened out

The inability of supply to meet demand is illustrated by trade developments: prices increased by 23.8% year-over-year, whilst volumes remained almost flat compared to 2022 (-0.6%). Volume decline was concentrated in the US, the Netherlands, and Argentina, with the former 2 experiencing bad crops and the latter a drop in decline from key export destination Brazil as local production was ramped up. The average price increased from €1.05/kg in 2022 to €1.30/kg in 2023, with prices seeing substantial increases throughout 2023 but stabilization towards the end of the year. In particular, prices decreased from €1.35/kg in October to €1.31/kg in December, representing a decrease of approximately 3%, signaling the positive effect of the good 2023 crop on global frozen potato product supply.

Figure 2. Global frozen potato trade volume in th. tonnes and price in €/kg for the period ending December 2023, year-over-year comparison

During these raw-induced shortages, producers clearly favored the higher priced domestic and exports markets, with less product available to markets that were unable or unwilling to pay the global price increases. This led to consumption decline in markets like South Korea and Malaysia, as well as smaller markets in Latin America.

Outlook: Continued demand growth and capacity expansions to match

Over the next five years, we anticipate an annual growth rate of 3.5% in the global consumption of frozen potato products, primarily driven by increased consumption per capita in emerging markets in Latin America, the Middle East, and Asia. While these regions show higher growth rates in the coming years, in terms of absolute volume, Europe and North America show similar growth.

To meet the increasing global demand, processors are expanding capacity in Europe and North America, which currently serve as the most significant exporters worldwide. However, a notable trend is emerging in high growth countries like India and Brazil, where local players are intensifying efforts to enhance capacity and secure local supplies. This could present challenges for European and North American players, as export growth may not match consumption growth beyond these regions. Consequently, this could result in lower global traded volumes and increased competition for raw material supplies, thereby affecting prices. Already in January 2024, we are observing increased potato prices and declining traded volumes.

Curious how A-INSIGHTS can help you to incorporate objective insights into your decision-making processes and how our Market Monitor will empower your perspective? Schedule a call.

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