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The global dehydrated potato market size was valued at USD 5.71 billion in 2022 and is anticipated to grow from USD 6.02 billion in 2023 to USD 9.68 billion by 2030, exhibiting a CAGR of 7.03% growth during 2023-2030.
Dehydrated potatoes offer great flavor, versatility, and nutrition of natural, fresh potatoes and thus are used in soups and salads to ready-to-eat meals and desserts. The market growth is primarily driven by various factors, such as the rise in the popularity of these products for their longer shelf-life and all seasonal availability. Furthermore, an increase in the preference toward convenience food products and the rising demand for processed food products are expected to propel the demand for the product in the market. Several food service operators worldwide purchase these products due to their wide applications in snacks, general foods, bakeries, and commercial food service operations, which is anticipated to support the steady growth of the market.
Rise in Sales of Processed Foods Propelled the Market Growth Amid COVID-19 Pandemic
The COVID-19 pandemic had a moderate impact on the global market. The restrictions on dining experiences at restaurants, mass-feeding operations, and grocery stores have experienced a run on food items. The food supply chain, availability of various processed food products, and business activities have been suspended due to restrictions on food production facilities, financial restrictions, and travel bans. Furthermore, the lockdown increased the demand for processed and frozen foods such as frozen fries, instant mashed potatoes, and others, owing to their longer shelf life.
The outbreak also increased sales of processed products through e-commerce and online grocery platforms. However, supply chain disruptions and raw material shortages created a demand and supply gap affecting the global market.
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Increasing Demand for Plant-based Products to Propel the Market Growth
Growing preferences toward plant-based and flexitarian diets have contributed to the growth of the market. According to the International Food Information Council (PBFA), plant-based food sales grew three times faster than retail food sales in 2021, stating high demand for plant-based foods. Therefore, potatoes provide the perfect solution for the vegan population. They provide several applications to serve delicious sides and creative entrees across all-day parts, formats, and cuisines. Furthermore, the rising consumer awareness related to potatoes' healthy fiber and starch content is also set to fuel the demand for the product.
Rising Demand for Potato-based Body Building Foods to Create Newer Growth Opportunities
Increasing usage of whole potatoes & flakes in baking nutritional protein bars and rising demand for energy boosting products among fitness seekers is creating newer market growth opportunities globally. As per the ‘Food & Health’ survey conducted by International Food Information Council (IFIC) in 2021, 60% of U.S. respondents prefer bars containing protein ingredients to build their health. In addition, growing consumption of on-the-go, bite-sized frozen diced potato snacks among youngsters is accelerating the demand for such foods. Besides, increasing usage of potato gel-based solutions in producing sports drinks favors global market growth.
Increasing Demand for Ready-To-Eat Products to Drive the Market for Convenience Foods
The increasing demand for ready-to-eat (RTE) food products led to the rise of convenience foods. Convenience foods help consumers save time and effort in food activities such as meal preparation and cooking and post-meal activities. Growing gross Household Disposable Income (GHDI) of consumers and rapid urbanization have enhanced the expenditure toward processed and ready-to-eat food products. The change in consumer taste, improving consumer lifestyle, long working hours, and the COVID-19 outbreak led to an increased demand for convenience foods.
The rising demand for these food products is further driving the product demand. Therefore, producers of potato products perform various business operations, which help expand the market. For instance, in May 2022, Iscon Balaji Foods planned to double its contract farming activities in Gujarat (India) to increase the production of dehydrated flakes and other potato products. The company introduced three new varieties of European potatoes and tried to serve the increasing demand for such products from the HoReCa segment.
Rising Applications in the Processed Food Industry to Fuel Product Demand
The market has shown significant growth due to the rise in demand for their applications in baked products, sauces, soups, and other processed food products. These dried potatoes possess various properties that are useful for culinary purposes. For instance, dehydrated potato flakes or granules form a good thickener base for the preparation of soups and gravies. These potatoes help replace gluten-containing ingredients and benefit people with celiac disease or another gluten-related disorder.
The burgeoning demand for the product is mainly from the processed potatoes industry, owing to its longer shelf life and availability throughout every season. In recent years, consumers are actively consuming nutrition-laden processed foods, which is also supporting the steady growth of the market. According to the Food and Agriculture Organization (FAO) data, less than 50% of potatoes are consumed fresh, and the rest are processed into value-added products and dried food products. The increasing demand for dehydrated & processed potatoes in the global processed food & beverage industry is expected to create significant market opportunities.
Price Fluctuations and Supply Chain Bottlenecks to Impede Market Growth
This market experiences tight supplies from labor, logistics issues, and raw product shortages, affecting the market growth. Additionally, the fluctuating prices of raw materials lead to supply chain bottlenecks, negatively impacting the market. Furthermore, health-conscious people avoid consuming high-calorie and additive-laden processed foods and look for nutritious alternatives, which also hinders market growth.
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Powder Form to Lead Owing to its High Demand in Food Services
The global dehydrated potato market analysis can be conducted based on various product forms such as flakes, powders, dice, shades, and others. The powder segment is expected to lead the global market. Potato powder is widely used in various food preparations, such as bakery products, ready-to-eat meals, and other dishes, as a thickening agent. Ready-to-cook products and convenience foods have gained considerable significance in recent times. In this context, potato powder will become popular as a product of mass consumption and find a good place. Therefore, this product has considerable potential and scope in the emerging food scenario. It also forms a great alternative to gluten-free flour in contrast to wheat flour. Its use at present is mainly in the food service industry, but acceptance in households is growing due to its inclusion in various food dishes such as soups, gravies, and curries.
The potato flakes segment is expected to grow at a considerable CAGR in the coming years. Potato flakes are used to manufacture texturized potato products, potato chips, snack pellets, and others. They are also gaining demand as an alternative to wheat flour and cornstarch, which adds volume to stews, sauces, soups, and broths. Thus, the segment will witness considerable growth over the forecast period.
Conventional Potatoes to Hold the Bulk of Market Share Owing to Affordability
The wide range of applications of the product led commercial vendors to provide dehydrated potatoes in their purest forms. The conventional segment is expected to hold a significant share of the global market. Conventional foods are more affordable than organic foods, making them more preferred by consumers. Conventional potatoes are majorly used in commercial food service operations, and thus, purchased in bulk. The retail price of organic potatoes is comparatively higher than conventional ones, propelling the growth of the conventional segment.
The organic segment is expected to grow at a high CAGR in the forecast period. The concept of organic farming has hugely impacted farming practices, which is a major reason for the fast growth of dehydrated organic potatoes. According to the U.S. Department of Agriculture survey, in the U.S. the certified organic potatoes reported commodity sales of USD 183 million in 2021. Consumers have become more concerned with the environmental effects of food production activities and expect exponential market growth in the global organic foods market in the forecast period.
Food Services to Hold the Largest Market Share Owing to all Seasonal Availability of the Product
The food services segment is expected to account for a significant share of the market. The food services segment includes hotels, restaurants, fast food outlets, cafeterias, and others. The demand for products is gaining importance within the food service segment due to the expansion of food delivery channels. The increasing popularity of full service and quick service restaurants with rising national and international brands propels the demand for the product. Modern trade, usage in commercial and industrial applications, and other retail formats also provide easy access to dehydrated products, which helps the growth of the market.
Asia Pacific Dehydrated Potato Market Size, 2022 (USD Billion)
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Based on geography, the market has been studied across Asia Pacific, North America, Europe, South America, and the Middle East & Africa.
Asia Pacific is expected to hold a significant share of the global market. The region is expected to be a significant contributor to instant potato manufacturers. China and India are expected to hold the region's largest market share. Potato is an important vegetable grown in these countries as a staple food and as a source of income, especially for farmers in mountainous areas with poor soil conditions. Dehydrated potato flakes are used in retail mashed potato products as snack ingredients, and potato flour is used to bind meat mixtures and thicken gravies and soups. The increasing use of potato starch as a thickener for sauces and stews and a binding agent in the dough, biscuits, and cake mixes fuels the demand for the product in the region.
North America is expected to grow at a high CAGR in the forecast period. The processed food industry in the U.S. is growing rapidly, which, in turn, aids regional market growth. The U.S. holds the largest market share in the region as the consumption of instant soups and salads is growing. The processors adopt advanced methods, technologies, and stringent standards to maintain fresh-potato texture and flavor in the rehydrated product. The U.S. potato manufacturers produce a variety of clean-label dehydrated options for the consumer's heightened concerns about ingredients.
For instance, the Emsland Group, an internationally operating company, offers dehydrated potato products such as flakes, granules, and others. These products are clean-label and non-GMO verified and used in various foods such as soups, gravies, snacks, sauces, and pasta. According to the International Food Information Council (IFIC) 2021 Food and Health Survey, 22% of U.S. consumers stated they regularly purchase foods and beverages as they advertised on the label as having clean ingredients. Furthermore, increased demand for applications in snack foods and ready meals is expected to propel the North Americaan market growth.
The Europe market is expected to record proliferation during the forecast period. The U.K. is expected to be the leading country owing to the growing demand for ready meals and snacks and the growth of the fast-food industry in the region. The rise in the working population has propelled the demand for convenience foods aiding the market expansion in this region. The rise in bakery product demand, including whole grain, high fiber, and gluten-free foods, increases the market potential for products in the region.
KEY INDUSTRY PLAYERS
Key Players Focus on Digital Advancements to Increase the Market Reach
Robust growth of the food processing industries helps fuel the demand for the product. Manufacturers also invest in the newest technologies to increase their clientele base and branding. For instance, in July 2022, Keystone Potato Products, LLC launched a new website for Hegins, PA-based partner Keystone Potato Products, LLC. The company created a unique and engaging website by partnering with a tech-enabled digital marketing company, WebFX. The new website targets food manufacturers, commercial/institutional food service companies, and restaurants for fresh-cut potato products and may also include fine dehydrated potato products. The technology helps in engaging potential customers and creates sales opportunities.
An Infographic Representation of Dehydrated Potato Market
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The report provides qualitative and quantitative market insights and the growth rate for all possible segments in the market. The market outlooks elaborative industry analysis of different country markets. It provides various key insights: the overview of related markets, market dynamics, SWOT analysis, recent industry developments such as mergers & acquisitions, regulatory scenario in key countries, key dehydrated potato market trends, and the competitive landscape. The market research report provides detailed analysis on industry supply chain and regulatory aspects of the industry.
CAGR of 7.03% during 2023-2030
Value (USD Billion)
By Distribution Channel
Fortune Business Insights says that the global market value was USD 5.71 billion in 2022.
Growing at a CAGR of 7.03%, the market is forecasted to grow during (2023-2030).
The powder segment is expected to be the leading segment in the global market.
The exponential growth of convenience food products is predicted to drive the growth of the global market.
McCain Foods, Basic American Foods, Lamb Weston, Idahoan Foods, and Pacific Valley Foods are a few of the major players in the global market.
Asia Pacific is expected to hold the highest market share globally.
The food service distribution channel is expected to showcase the fastest growth in the global market.
Increasing demand for plant-based products is the key trend driving market growth.
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