FRENCH FRIES EVOLUTION - Potato Business
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FRENCH FRIES EVOLUTION PB whitepaper Volume 3-2019 French fries cover almost 63% of the total market for frozen potatoes in terms of both volume and value, including both oven (28%) and classic French fries (35%). This does not include diverse specialties, which can be quite similar in the eyes of the consumer, such as wedges.
FRENCH FRIES
MARKET
Remains Driven by
Expanding Fast Food Chains
The global frozen potato market reached just over USD15.71bn in
2017 in North America, Europe and the BRIC countries.
ccording to data from Alternatively, according to analyst Jonathan
A
research firm Food Thomas, global sales of French fries and
for Thought, the total chips are worth more than USD20bn at
global market grew, in present, with the market growing by
terms of volume, by around 4% per annum. Much of this growth
an annual 0.9% and is is coming from less well-developed
forecasted to economies in regions such as Asia and
accelerate to an annual 2% up to 2020. Africa, where diets are becoming
Out of this segment, which has grown increasingly Westernized and the fast food
more diverse in the last few years, industry is expanding at a rapid rate.
French fries emerge as the dominant In countries such as the UK, greater
sub-category. demand for street foods – especially among
Within frozen French Fries, oven French younger age groups such as Millennials –
fries have started to become an has been put forward as a reason for static
important product, now taking up around growth within the UK market for fish and
28% of the total frozen potato market, chips (or French fries). The other main
with classic French fries grabbing 35%. challenge facing the sector is the ongoing
The landscape for this classic frozen pressure from the health lobby, since
product, French fries, is changing French fries have often been linked to poor
gradually. Manufacturers, aiming to diets and rising obesity rates.
reduce cooking time and to offer Manufacturers have therefore been forced
products that can be part of a healthy to innovate and experiment, although this
diet, are focusing on developing frozen has not always been successful. It seems
French fries in a format which can allow likely that companies will continue to seek
them to be either cooked in hot oil or to out ways to reformulate their products via
be prepared quickly in the oven. Over the lowering of fat and caloric levels, as well
the next 5 years, almost 80% of these as addressing more specific health trends
frozen French fries will become multi- such as the growing popularity of gluten-
purpose, enabling either way of cooking free foods. Although health remains a major
with the same product. Oven cooking is driver of NPD, manufacturers of chips and
considered as a healthy version of French fries are still developing new flavors
preparing French fries and is also a more and shapes as consumers tastes become
economical way to enjoy a tasty meal. more complex.
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10-11
kg is the annual per
capita consumption
of French Fries in
the UK/U.S.
N
French fries cover almost
63% of the total market for
frozen potatoes in terms of
both volume and value,
including oven (28%) and
classic French fries (35%).
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BRITS AND AMERICANS market. With annual per capita
CONSUME THE MOST consumption at 0.2 kg and 0.3 kg
The market is split in the extreme respectively the potential is clearly huge,
between high per capita consumption even if these figures are pulled down by
countries (11 kgs annually) and very low huge populations. Both these countries
or non-existent consumption (0.2 kgs are among the biggest producers of the
annually). In the higher consumption fresh potatoes at a global level. Pushed by
countries, the future lies in product rising income levels and increasing
diversification towards higher value urbanization, 2012-2017 annual percent
options. Conversely, in the lower volume growth reached a promising 4.7%
consumption countries with sometimes to 5.1%. Note that in the U.S. the
huge potential, intense marketing of apparently severe drop in total market
lower-priced products is no doubt the volume arises from a modest drop of less
way to go. There are relatively few than 1% annually in the market.
countries in-between. Southern European countries Greece,
Top consumers in terms of kilograms per Italy, Spain and Portugal fall back to 2.7-
capita are Ireland, U.S. and UK, with 3.6 kg per capita leaving some room to
quantities reaching 10-11 kg annually per develop. Some 12 countries, including
capita. The gastronomical profile of these most Eastern European countries,
countries strongly supports high register less than 3 kg per capita
consumption of frozen potato and consumption growth, leaving clear
especially of French fries. France is one of opportunities to develop markets. The
the champions of Western Europe in overall 2017-2020 annual forecast
terms of consumption with around 8.8 continues the positive trend of the
kg/capita at year level, followed closely by previous period at a real annual 3.3% by
the Netherlands and Switzerland. At the value. With few exceptions, most
other end of the scale, China and India are countries have a positive outlook.
steadily growing in the frozen potato While consumption is high in the region,
North America’s position as one of the
world’s leading suppliers of French fries
and other frozen potato products has
been steadily eroded, notes analyst
Jonathan Thomas. The continent’s share of
global exports has dropped from 62% at
the turn of the millennium to around 38%
in 2017. North American producers have
lost share to European and Chinese rivals
in recent years, with many preferring to
focus upon modernization of their facilities
to cope with rising domestic demand.
Nevertheless, North America continues to
boast a consumption amounting to more
than USD5m tons per annum. In the U.S.,
N
frozen French fries account for 55% of
total domestic potato utilization, ahead of
chips shoestrings (21%), dehydrated
potatoes (17%) and other frozen potato
Exports of processed and preserved products (4%). Per capita consumption of
potatoes were worth USD2.2bn and French fries in the U.S. remains high,
USD2bn in the Netherlands and Belgium currently estimated at around 13kg. Much
in 2017 respectively. of this is due to strong demand from the
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Europe’s more northernly countries such
as the UK, Germany and the Belenux
nations are amongst the leading
consumers of French fries. In 2018, UK
sales of frozen chips (French fries) were
worth USD575m, or 63% of the total
market for frozen potato products. The
enduring popularity of meals such as fish
and chips means that sales are also very
high via foodservice channels.
Expenditure via fish and chips shops is
worth around USD1.49bn per year, with
382m portion served. It is estimated that
80% of UK consumers visit a fish and
chips shop at least once in a typical year.
According to data from USDA, Chinese
production of frozen French fries is set to
increase from 250,000 tons to 290,000
tons in 2018/2019, equivalent to growth
20bn
U.S. foodservice industry – for example, of 15%. Rising demand at the consumer
7% of the country potato crop is used to level has led many Chinese companies to
produce French fries for McDonalds. invest increasing capacity, although fresh
According to data from the National varieties account for a sizable 60% of all
USD is the potatoes eaten in the country. At
estimated Center of Health Statistics, 37% of U.S.
adults consume fast food on any given present, sales of frozen French fries are
global experiencing strong growth via retail
day, which equates to a daily consumer
market base of around 85m people. At 45%, this channels, such as supermarkets and
value for figure is highest for those aged 20-39, convenience stores.
French Fries with males slightly more likely to consume
and chips. fast food than their female counterparts. CONSUMPTION IS DRIVEN
Elsewhere, exports of processed and BY CONVENIENCE
preserved potatoes were worth Past development of frozen potato has
USD2.2bn and USD2bn from the focused on potato origin, the freezing
Netherlands and Belgium in 2017 process and packaging. Now of high interest
respectively. The Belenux countries to manufacturers are developing new frozen
remain two of the world’s leading potato types which require less cooking time
suppliers of frozen potato products, and are easy-to-cook in the oven.
although exports are from other European Regarding French fries, trying to establish
nations such as Spain, Austria and Spain a specific trend for them is quite tricky, as
are also growing. The hot summer this product category has been a stable
weather caused shortages in EU potato product for years.
output during 2018, with crop losses of Factors impacting the future development
up to 20% experienced for the overall of the product include:
region. It has been suggested that exports •Strong urbanization at a global level.
of French fries from the EU countries •The fast-growing fast food sector.
could also be adversely affected by the •New and fast-developing retail
decision taken by Colombia towards the channels such as gas stations and other
end of 2018 to impose tariffs as an anti- small shops catering to “emergency”
dumping measure, joining the likes of shopping. Dedicated freezers with
Brazil and South Africa, which has voiced packs of frozen fries or wedges have
similar concerns. been making their appearance.
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N
44% of consumers in the UK claim that which present a more “hodemade”
portion sizes at fish and chips shops are appearance. Neither is their appeal
usually too large. confined to visual aesthetics – McCain’s
UK range, for example, includes Skin-On
•A tendency of big retailers to place Rustic Chips, which are promoted as
frozen potato in the frozen food area to having 3% fat content. Late in 2018, KFC
exploit the large traffic they create, not announced plans for thicker, skin-on type
to mention the high margins they often of French fry for its UK outlets to present
obtain with this appealing product. a more natural and rustic appearance.
These multiple influences are pushing Manufacturers also appear keen to
frozen potato producers to develop and experiment with seasoned products, using
multiply their assortments and various herbs (e.g. rosemary and garlic), as
continuously review differing sales channel well as salt and pepper and varieties based
opportunities. Joining this trend, farmers on certain cuisines (e.g. Cajun). McCain
and major potato growers are paying much UK’s range, for example, includes Season
more attention to the potato types best & Savor Triple Cooked Chips, which also
suited to the frozen potato industry. allow consumers to add the seasoning
themselves during the cooking process, as
FRENCH FRIES GET well as Shake Shake Fries. These chilled
A “HEALTHY” MAKEOVER products are available in Smoked Paprika
One product trend which has been and Sea Salt & Cracked Black Pepper,
evident within both retail and foodservice while the range has recently been
markets has been the emergence of extended with Shake Shake Sweet Potato
French fries and chips described as rustic, Fries, which have a Sea Salt and Three
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75m
Pepper flavor. In the Australian market, its to a large extent in this sector, having
Shake Shake Fries are available in Salt & trialed Bacon & Cheese Basket of Fries in
Vinegar, Cheese & Onion and Chicken. In 2017. The company is believed to be
USD is the the U.S., Simplot’s range includes about to introduce cheesy bacon fries in
sales value Rosemary Julienne and Cracked Pepper the U.S. market, which are described as
flavored fries. French fries topped with cheddar cheese
of frozen Staying in the U.S., Lamb Weston has sauce and smoked bacon pieces.
chips in been experimenting with new process Early in 2019, Taco Bell announced it was
the UK. technologies aimed at providing bringing back its Nacho Fries, one year
consumers with crispier fries. While the on from their debut as a limited edition.
company’s basic French fries will remain According to the company, these met
crunchy for about five minutes, the firm with instant success when launched,
has recently unveiled a new variety with having feature in more than 53m orders
a special batter than can keep them during their limited time on the market.
crispy for close to an hour. The new During this period around 25% of food
method was developed at the company’s orders at Taco Bell outlets including
Richland laboratory. Nacho Fries. They feature a spicy
Another trend evident within the seasoning and are served with a side
foodservice industry has been the portion of nacho cheese.
emergence of chips and French fries As mentioned above, health concerns are
featuring some form of topping – these also driving new developments in this
are often referred to as “loaded” fries. meal category. The global market for
Although bacon/or cheese appear to be French fries and chips remains under
the most popular, other toppings include pressure from various health concerns
sour cream, chilli con carne, pulled pork, which are shaping people’s diets across
etc. McDonalds has been leading the way much of the world. These products still
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37%
tend to be associated with poor diets, health and food waste. According to
although operators in both the retail and research carried out recently by these two
foodservice industries continue to develop organizations covering more than 600
of U.S. varieties carrying some form of health establishments, 44% of consumers in the
claims. These have met with varying levels UK claim that portion sizes at fish and
adults
of success – for example, Burger King chips shops are usually too big.
consume launched Satisfries in the U.S. during Furthermore, a third would be interested
fast food 2013, which had a lower calorie count in being offered the option of a smaller
on any than regular fries and were also positioned portion, while 21% admit to throwing
given day, as lower in fat. away leftover because the portion sizes
which However, these were discounted a year are somewhat excessive.
equates to later, despite company claims that around With this in mind, McCain UK announced
a daily 100m of its customers have tried them. the forthcoming launch of Lighter Home
consumer Many manufacturers have been Chips during February 2019. These
reformulating to take account of these contain 30% less fat than their standard
base of
health concerns. Examples have included counterparts, having been in
around removing hydrogenated oils and artificial development over the last three years.
85m additives, as well as cooking products in The same company supplies Healthy
people. healthier oils and making conscious efforts Choice Chips (which are marketed as
to lower calories and levels of saturated 97% fat-free) in the Australian market.
fats. It should also be noted that the Manufacturers have also been
nutritional qualities of French fries vary developing French fries made from
according to type – for example – skin-on sweet potatoes in regions such as Europe
products of the type mentioned previously and the U.S., examples of which include
are generally regarded as healthier, whilst McCain, Lamb Weston, Ore-Ida and
larger products (e.g. Steak Fries) have a Nomad Foods (via the Aunt Bessie’s
smaller surface area to volume ratio and range). Sweet potatoes are generally
therefore absorb less fat. viewed as the healthier alternative to
In the UK, the fish and chips industry has regular white potatoes, since they
recommended adopting a selection of contain fewer calories and have higher
standard portion sizes to address the wide fiber content.
variances which often exist across the
country, in the light of concerns over diet, ROOM TO GROW STILL EXISTS
Overall, French fries should continue
their significant market growth in coming
years. In well-established markets, the
trend will be bent towards product
diversification and development of new
sales channels. In little-developed
markets with large populations, which
include China, India, Mexico, Poland and
Russia, the potential for market
N
development is more than considerable.
Factors contributing to this positive
outlook include on-going urbanization,
multiplying fast-food outlets, the trend
The global market for French fries remains towards snacking and even the more
under pressure from various health positive nutritionist outlook.
concerns which are shaping people’s diets This article is based on information data from Food for
across much of the world. Thought and analyst Jonathan Thomas.
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