The global potato chip market is reported to grow by 36% in the coming years. It remains to be seen whether Dutch growers of potato chips can benefit from this. The growth is mainly in distant markets and chips are not an ideal export product.
Analysts at Research and Markets estimate that the potato chip market will be worth $2028 billion by 43,8. Last year the size was $32,2 billion. The chip market is expected to grow by almost 4% annually until that year. This is mainly because Western eating patterns are increasingly penetrating non-Western parts of the world.
Infrastructure development drives chip consumption
Other factors that influence the growth of the chips market are a growing economy, increasing middle class and urbanization. The rise of entertainment venues (such as cinemas) and the development of infrastructure in developing countries also gives the market a positive boost. Chips are a product par excellence that is consumed at transit locations such as metro stations and airports. It is a quick snack that is easy to take with you.
Potato chips have a large share of the salty snack market worldwide. Consumption levels differ greatly per region. This also has to do with taste preferences. For example, the Dutch love peppers and bolognese, the British prefer Salt & Vinegar and Cheese & Onion and completely different flavors are popular elsewhere in the world.
Asia Pacific largest growth market
The fact is that investments in the chip industry are increasing worldwide, which further fuels the growth of the market. Significantly more chips are expected to be consumed in Southeast Asia and Oceania in particular in the coming years. In countries such as China and India, incomes are rising, the younger population (the largest chip consumers) is increasing in size and the Western lifestyle is gaining popularity.
In that light, it can be concluded that growers of potato chips in the Netherlands will benefit only to a limited extent from the growing chips market. Unlike fries, chips are not easy to transport over long distances. A truck can carry around 22 tons of chips, but 'only' 4 tons of chips, which means that the cost price for export quickly increases. Producers therefore choose to produce locally as much as possible and sell their product within a maximum radius of 500 kilometers around the factory.
Eating more chips due to corona pandemic
Moreover, the market growth, which is predicted between 2020 and 2028, got off to a strong start last year due to the outbreak of the corona pandemic. While the chip market suffered significantly from the lockdowns in large parts of the world, the chip industry benefited of consumers spending significantly more time at home. And that is exactly the place where chips are widely consumed. However, the industry struggled to meet rising demand due to supply chain problems.