Germany’s love of potatoes is deeply rooted in tradition, but in the 21st century the crop is at the heart of a rapidly growing industry. As global demand for frozen and processed potato products increases, Germany has become a crucial hub in the European potato processing chain. While our eastern neighbours are not experiencing rapid growth, the sector is certainly not sitting still.
Ask an insider to analyze the European potato processing industry and chances are he or she will immediately point to the growth figures of France or Belgium. Germany is not the first name most people in the sector mention. But that does not mean that nothing is happening, far from it. Germany holds one of the biggest trump cards of the potato industry.
A growing market
The numbers speak for themselves. According to data from Grand View Research, the German market for processed potato products is expected to grow from $4,8 million (€4,19 million) in 2024 to $6,9 million (€6,03 million) in 2030, with a compound annual growth rate of 6,1%. The largest and fastest growing segment is frozen potato products, with French fries taking the lead. Of all European countries, Germany has the highest growth rate and a market share of 32% within Europe.
This growth is driven by an increasing demand for fast food in both the retail and hospitality sectors. Due to busy lifestyles and the expansion of fast food restaurants, German consumers are increasingly opting for ready-made and easy-to-prepare products. Frozen French fries have therefore become a permanent fixture in both households and restaurant kitchens.
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Exports slow down
Not only domestic consumption plays a role. Germany also plays an important role in the export market. In the second half of last year, the export of frozen fries slowed down, although the previous years were favorable. In November and December, more than 48.000 and 47.500 tons were exported respectively. In September 2023, a record was even set with 73.512 tons, compared to 43.305 tons in the same month a year earlier.
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Shift to industry
The year 2012 marked a low point in Germany’s recent potato history, when the area of ware potatoes fell to 157.700 hectares. Since then, the sector has gradually shifted towards industrial potatoes and away from table potatoes. A trend that is also visible in other European countries such as France. In 2023, the area will reach a record high of 217.900 hectares, an increase of 27% in ten years. The growing demand from potato processors in Germany and neighbouring countries is the main driver behind this.
Key players
This growth is based on global players who have significantly expanded their presence in the German market. One example is Aviko, which strengthened its position in Germany with, among other things, the acquisition of the Dolli Werk factory from manufacturer Amberger in 2017, and the collaboration with Unilever in 2020 around the Stavenhagen factory, which now produces frozen potato products for retail and catering.
Other international giants such as Lamb Weston and McCain Foods serve the German market from neighbouring European countries. Last summer, there was a rumour that the Canadian McCain had advanced plans for a production site in Peine, northern Germany. Although it went quiet after that, insiders suspect that the plans are still there. The switch from overcrowded growing areas in Belgium and northern France to northern Germany makes sense. The temperate climate is favourable for potato cultivation and there is less competition.
Local players
In addition to the multinationals, Germany also has a robust group of local players that play an important role. One of the largest is the family business Agrarfrost from Aldrup in Lower Saxony. Together with local growers, the company cultivates more than 11.000 hectares of potatoes. Agrarfrost specializes in frozen fries, potato croquettes, rösti and other specialties.
Another established name is Wernsing Feinkost from Essen (Oldenburg), active in the QSR segment. Other players in this sector include Friweika eG (Weidensdorf, Saxony) and Pahmeyer (Werther, Westphalia). Friweika focuses primarily on supermarkets and catering suppliers in eastern and central Germany.
Investments and expansion
Over the past five years, investments in the German potato processing industry have increased significantly. Both domestic and foreign companies have invested capital in new plants, modernizations and R&D programs. Local medium-sized processors have started to automate in order to remain competitive. Despite the growth path, there are also challenges. Potato yields are under pressure due to extreme weather conditions. Drought, heat waves and long periods of rain make stable potato production difficult. Staff shortages in the food industry also cause friction, which encourages companies to automate further. This increases efficiency, but also raises questions about employment in rural production centres.
Looking forward
The German potato processing sector is at a turning point. With strong consumer demand, significant investments and a focus on technological progress, the sector is poised for further growth. Exports, especially of French fries, have been growing steadily in recent years, albeit at a slower pace than in France or Belgium. But with those countries under pressure in terms of production capacity, Germany may well hold the best cards for the coming years.