North America Potato Processing Market Report and Forecast 2024-2032

North America Potato Processing Market Outlook

The North America potato processing market size was valued at USD 9.05 billion in 2023. The market is further projected to grow at a CAGR of 4.40% between 2024 and 2032, reaching a value of USD 13.45 billion by 2032.

Key Takeaways

Potato processing involves transforming potatoes into various food products and by-products. This industry plays a crucial role in meeting the global demand for potato-based foods, such as potato chips, French fries, mashed potatoes, frozen, and dehydrated potato products. The process includes activities such as cleaning, peeling, cutting, blanching, frying, freezing, and packaging.

As per statistics, more than 50% of the potatoes cultivated worldwide are consumed after their processing, which is expanding the overall value of potato processing market in North America. The market is experiencing robust growth driven by increasing consumer demand for processed potato products, including frozen fries, chips, and dehydrated potatoes. Factors such as the rising popularity of convenience foods and a growing trend towards snacking, contribute to the positive North America potato processing market outlook.

Key Trends and Developments

Rising sustainable packaging practices, adoption of new farming techniques, and increasing demand for frozen snacks are propelling the market growth

North American Potato Processing Market Trends

Sustainable packaging practices, such as biodegradable materials, play a significant role in increasing the North American potato processing market share. These practices, along with sustainable sourcing, eco-friendly production methods, and sustainable potato farming, contribute to a more environmentally friendly and sustainable food supply chain.

PepsiCo, a leading chip manufacturer, has committed to sourcing 100% of its North American potatoes sustainably, which includes using a unique variety of potatoes and having direct relationships with farmers. This ensures that the potatoes are grown using environmentally friendly methods and supports local farmers, thereby increasing the North America potato processing market growth.

Market Segmentation

North America Potato Processing Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Potato processing for frozen snacks is dominating the market as they are preferred by households for their less cooking time

As per North America potato processing market analysis, the frozen segment is expected to hold a significant share in the market due to rising popularity of frozen snacks by consumers. As a result of busier lifestyles, people now need quick and simple meal options and frozen potatoes provide a quick and easy solution. Additionally, frozen potatoes have a longer shelf life than fresh potato products, which makes them a viable choice for customers who want to stock up on essentials. These factors contribute to increasing demand for frozen foods in North America potato processing market. In 2023, McCain Foods launched a new frozen snack called Baby Hasselbacks, catering to the growing demand for frozen food category.

Dehydrated potatoes are also popular in the potato processing industry as they have a longer shelf life and are easier to store than fresh potatoes. Additionally, dehydrated potatoes are lightweight and easy to transport, making them a great option for emergency food stockpiles and locations with limited access to fresh produce. They are also versatile and can be used in a variety of culinary applications, such as mashed potatoes, soups, stews, casseroles, and crispy snacks. Furthermore, dehydrated potatoes retain the same nutrients as fresh potatoes, such as potassium, vitamin C, and fibre. Overall, dehydrating potatoes is a useful and practical way to preserve potatoes for later use and is thus positively impacting the potato processing market in North America.

Food service channel holds a significant market share due to the expansion of quick service restaurants

The growth of the food service channel is rising in potato processing market in North America due to an increasing demand for potato products by quick-service restaurant chains. Restaurants rely on processed potato products for a variety of items such as French fries, salads, and snacks. Additionally, the convenience and time-saving benefits offered by processed potato products make them an attractive option for food service establishments, as they are already partially prepared, requiring only a fraction of the time to produce dishes. Furthermore, the increasing penetration of online food delivery services has also contributed to the demand for these products in the food service sector, as these services often rely on pre-processed ingredients for their offerings.

However, the retail channel for potato processing products is also growing due to consumer’s rising disposable income. As consumers have more disposable income, they are more likely to purchase processed potato products for home consumption. Also, the growth of urban areas has led to an increase in the number of supermarkets and grocery stores, making it easier for consumers to access processed potato products, accelerating the North America potato processing market development. The increasing penetration of online food delivery services has also contributed to the growth of the retail distribution channel for potato processing products, as consumers can easily order processed potato products for home delivery.

Competitive Landscape

Established players and emerging startups in the market are actively engaged in producing new products with advanced processing technology

Other key players in the North America potato processing market include Farm Frites International B.V., Lamb Weston Holdings, Inc., J.R. Simplot Company, J.R. Short Milling Company, Idahoan Foods, LLC, AVIKO B.V., Alaska Chip Company, and Keystone Potato Products, LLC, among others.

North America Potato Processing Market Analysis by Country

United States is the leading country due to the rising popularity of ready-to-cook meals

United States accounts for a substantial North America potato processing market share due to rising numbers of consumers opting for ready-to-cook meals and frozen products. In the U.S., 40% of grown potatoes are utilised for frozen processing, followed by fresh processing at 25%, chip processing at 23%, and dehydrated processing at 7%. This provides availability of a wider range of potato processing products that contributes to the market expansion.

Meanwhile, as per North America potato processing market report, Canada's total potato production has been on the rise, reaching 5.7 million metric tons in 2021. In terms of processed potatoes, Canada's processed potatoes exports have shown significant growth, with a notable focus on frozen French fries. The country's exports of frozen potatoes have been on the rise, reaching a value of USD 2.35 billion in 2022. This growth reflects the increasing demand for Canadian potato products, particularly in the United States, where Canadian potato exports rose by 20.8% between 2020 and 2022. Furthermore, due to abundant availability of potatoes, manufacturers are introducing new potato-based food items, which in turn, increases the potato processing market growth in North America.

Key Highlights of the Report