The European market for frozen potatoes continues to be dominated by the UK, which remains the largest one for this type of produce, with over 90 per cent of the population acquiring frozen potatoes for their households.
In 2011, market value was worth GBP580m, having increased by 8% from the previous year, according to information provided by Leatherhead Food Research. The same source identifies the fact that during this time, volume sales rose only very marginally to 473,000 tons, or 7.6 kg per capita. The leader of the UK market for frozen potato products is McCain Foods, which processes up to 5 million tons of potatoes per annum. McCain’s UK range now features the Red Tractor logo to demonstrate its commitment to buying potatoes from British farmers, whilst it has made significant reductions in salt and fat levels over the last few years. In 2011, UK sales of the McCain brand amounted to GBP275m, whilst its range was extended with Rustic Baked Jackets at the start of 2012. Its newly-rebranded Home Chips represent the UK’s leading brand of frozen oven chips with an 18% share. In Ireland, meanwhile, McCain accounts for 44% of the frozen potato products market, a figure which rises to over two-thirds (68%) of the frozen chips sector.
Varieties and specialties
According to the latest data by research company Mintel, the value sales in fresh potatoes were in line with overall fruit and vegetables over 2009-11, while frozen and chilled potatoes remain upbeat. Premium lines such as Rooster (by Albert Bartlett) remain popular but trade sources report strong demand for economy lines. Growing slightly ahead of frozen potatoes and chips is chilled potatoes. Although just 2% of the £1.8 billion potato market, chilled potatoes is a hotbed of branded innovation. Since 2008, it has left canned and dehydrated potatoes in its wake and is well positioned to capitalize on consumers’ migration to convenience-led chilled produce. According to Mintel’s research one in ten consumers buys prepared fresh potatoes, such as chilled mashed potatoes or ready to roast diced potatoes, compared to 40% who buy frozen potatoes or chips and 11% who buy canned potatoes, therefore showing significant potential for growth. Canned potatoes are in long-term decline, their sales falling by almost 11% in the last year (from 2010 to 2011). There has been very little innovation in this sector and it would benefit from a new approach perhaps incorporating Mediterranean or ethnic flavors, such as seen in Geo Organics Organic Bombay Potatoes (chunks of potato cooked with onion, tomato and a blend of aromatic spices) launched in 2010. Dehydrated potatoes are struggling to assert their role in the modern diet. There is however scope to develop its young, male user base with flavor and recipe combinations to make them more of a substantial snack eg an alternative to Pot Noodle, Mug Shot etc. Aldi introduced a Roast Onion Mash Snack Pot in March 2011 and Betty Crocker launched a gluten-free mix in December 2011. Claims such as ‘made with real potatoes’ and ‘free from artificial ingredients’ could help drive the market forward.
McCain leads most European markets
Leatherhead Food Research states that the Irish market for frozen potato products is considerably smaller, estimated to be worth EUR70m at the retail level in 2011. Volume sales during this time were worth 28,000 tons, or 6.8 kg per capita. Market trends are similar to the UK, examples of which include growing demand for healthier products, plus rising consumer interest in more novel varieties such as seasoned wedges. In the year ending March 2012, the German market for frozen potato products amounted to more than 224,000 tons, following data provided by Leatherhead Food Research. Of this figure, oven chips accounted for a leading 55% share, compared with 12% for croquettes, potato puffs for 7%, wedges for 6%, frying chips for 5%, „rostis” for 4% and others for 11%. In value terms, the market is worth up to EUR340m at the retail level, of which McCain accounts for a quarter. During the second half of 2012, McCain acquired Lutosa, the Belgian-based potato processor owned by Pinguin Lutosa, thereby increasing its share of the European market for potato products. Sales for the acquired business were worth EUR225m and the deal increases McCain’s share of the European market for frozen potato products to 27%. In Spain as well, McCain is the leading supplier of frozen potato products, with volume sales worth 63,000 tons. This compares with 35,000 tons for Lutosa, which was in third place at the time of its acquisition by McCain, trailing Lamb Weston (40,000 tons). In France, the acquisition of Lutosa increases McCain’s share of the retail market to 38%, ahead of Findus (16%) but trailing the own-label sector (45%). Microwaveable products account for just 6% of the French market for frozen potato products, but sales grew by 13% in 2011-2012. McCain accounts for over half (53%) of this sector, ahead of Findus (42%).
Room for image improvement
While potatoes are a regular purchase for the vast majority of consumers (96%), there is quite a sharp drop between fresh potatoes and the next ‘convenience’ level which is frozen processed potatoes (40%), though the latter also carries associations with unhealthiness, which leading brands have looked to tackle in recent years, according to Mintel. Twice as many people buy fresh ready-to-cook vegetables as those who buy ready to cook potatoes. However, unlike vegetables, potatoes arguably become a lot unhealthier when processed, for instance typically butter, cream, or a sauce may be added to side dishes, such as potatoes „dauphinoise” or „parmentier”, or for mashed potatoes. However, recent NPD in ready-cut wedges and crisps for oven-baking goes some way to address this.