Dehydrated Potato Products Market Size, Share & Industry Analysis, By Form (Flakes, Powder, Dices, Shreds, and Others), Nature (Organic and Conventional), Distribution Channel (Food Services and Retail Channel), and Regional Forecast, 2024-2032

The global dehydrated potato products market size was valued at USD 7.22 billion in 2023 and is projected to grow from USD 7.72 billion in 2024 to USD 13.49 billion by 2032, exhibiting a CAGR of 7.23% during the forecast period. Asia Pacific dominated the dehydrated potato market with a market share of 61.36% in 2023. Moreover, the dehydrated potato products market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 958.22 million by 2032, driven by significant growth in the processed food industry of the country.

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.

The COVID-19 pandemic had a moderate impact on the global market. 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.

Dehydrated Potato Products Market Trends

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 Good Food Institute, a nonprofit organization that promotes plant- and cell-based alternatives, in 2022, the total U.S. retail plant-based food sales accounted for USD 8 billion. 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.

Dehydrated Potato Products Market Growth Factors

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 dehydrated potato 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 Potatoes USA, in 2020-2021, the imports of potatoes and potato products were up by 9% due to a 15% increase in dehydrated potatoes and an 18% increase in chips. The increasing demand for dehydrated & processed potatoes in the global processed food & beverage industry is expected to create significant market opportunities.

RESTRAINING FACTORS

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.

Dehydrated Potato Products Market Segmentation Analysis

By Form Analysis

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.

By Nature Analysis

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.

By Distribution Channel Analysis

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.

REGIONAL INSIGHTS

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. The increasing product usage led manufacturers to expand their business and solidify their positions in the market. For instance, in November 2023, Goodrich Group of Companies, an Indian business conglomerate, entered the market by setting up an ultra-modern dehydrated potato processing plant in Haryana. The new plant manufactures a range of dehydrated potato products, including potato flakes.

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.

List of Key Companies in Dehydrated Potato Products Market

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.

LIST OF KEY COMPANIES PROFILED:

• McCain Foods (U.S.)


• Basic American Foods (U.S.)


• Lamb Weston (U.S.)


• Idahoan Foods (U.S.)


• Pacific Valley Foods (U.S.)


• Augason Farms (U.S.)


• Idaho Supreme Potatoes (U.S.)


• Birkamidon Rohstoffhandels GmbH (Germany)


• J.R. Short Milling (U.S.)


• Rixona B.V. (Netherlands)

KEY INDUSTRY DEVELOPMENTS:

• January 2023: Emsland Group, an internationally operating company, plans to expand potato flake production in Emlichheim to increase the production capacity of dehydrated potatoes.


• November 2022: Lutosa, a potato processing company acquired by McCain, opened a new flakes facility in Belgium. The new unit comprises an investment of USD 44.7 million by McCain Foods. The new facility would help meet the globally rising dehydrated products demand, improve working conditions, and enhance its product range.


• September 2022: Lamb Weston Holdings, Inc., an American food processing company, announced a capital investment of USD 240 million in an Argentina-based new French fry processing line. The new unit in Mar del Plata would produce over 200 million pounds of frozen French fries and other dehydrated potato products annually. The company is committed to serving the Argentinian and South American markets.


• August 2022: Texas A&M Potato Breeding Program, a multi-state project funded by the U.S. Department of Agriculture National Institute of Food and Agriculture, may introduce two new potato varieties that could enter the French fry market. The breeding center has identified the COTX08063-2Ru variety potato clone as having a high starch and high gravity species. There is increasing demand for French fries in Texas, leading to increased cultivation of high-starch potatoes, which make good French fries. These potatoes also make processed foods such as chips and dehydrated potatoes.


• September 2021: McCain Foods Limited, a Canadian multinational frozen food company, invested USD 20 million in its Béthune plant. The investment would help the company with the modernization of the site, setting up new packaging for French fries, and creating a new packaging line. It would also help the company evolve toward sustainable and modern industrial production.

REPORT COVERAGE

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.

Report Scope & Segmentation