Potato Production in India
The Growth in Potato Production and Inception of Secondary Potato Markets in India
Case Study: McCain India Limited
Potatoes are a staple food crop in most developed and developing nations. The original habitat of South America was discovered by Europeans when Columbus landed on Latin American soil. However, the potato was adapted as a field crop only during the late 16th and early 17th century1. Global potato production reached 324,181,889 metric tons by 20102. Demand for frozen potato products has been increasing steadily in developing nations such as India and China. Rapid economic growth in these nations has also led to expansion of the number of quick service restaurants (QSR’s) like McDonald’s and KFC3.
The global frozen food market is highly fragmented and consists of a large number of small and medium scale manufacturers. In this highly dynamic industry, distribution plays a very important role which leads to success. Most of the industry participants have been relying on third party distributors to reach their target customers. In addition, private labels occupied more than 10% of the market share in 2012 which act as the major challenge for the international players to enter and establish themselves at regional levels in developed countries. Frozen potato products make an important contribution to the growing segment of frozen food sales. In 2010 the global frozen potato market had already reached $7.2 billion and continues to increase at a rate of more than four percent annually4. Domestically, demand for potatoes, primarily in the form of French fries, was forecasted to increase by five percent between July 2011 and June 2012,, raising the market segment beyond 2.5 billion tons of production.
India is the second largest producer of potatoes in the world with an estimated annual production of 34,390,900 m/t5. Using data from 1960 through
Case Study: McCain India Limited
Potatoes are a staple food crop in most developed and developing nations. The original habitat of South America was discovered by Europeans when Columbus landed on Latin American soil. However, the potato was adapted as a field crop only during the late 16th and early 17th century1. Global potato production reached 324,181,889 metric tons by 20102. Demand for frozen potato products has been increasing steadily in developing nations such as India and China. Rapid economic growth in these nations has also led to expansion of the number of quick service restaurants (QSR’s) like McDonald’s and KFC3.
The global frozen food market is highly fragmented and consists of a large number of small and medium scale manufacturers. In this highly dynamic industry, distribution plays a very important role which leads to success. Most of the industry participants have been relying on third party distributors to reach their target customers. In addition, private labels occupied more than 10% of the market share in 2012 which act as the major challenge for the international players to enter and establish themselves at regional levels in developed countries. Frozen potato products make an important contribution to the growing segment of frozen food sales. In 2010 the global frozen potato market had already reached $7.2 billion and continues to increase at a rate of more than four percent annually4. Domestically, demand for potatoes, primarily in the form of French fries, was forecasted to increase by five percent between July 2011 and June 2012,, raising the market segment beyond 2.5 billion tons of production.
India is the second largest producer of potatoes in the world with an estimated annual production of 34,390,900 m/t5. Using data from 1960 through
References: 2 As stated in www.geohive.com (Access date: 18 March, 2014) 3 Journal of Agribusiness 23, 2 (Fall 2005): 133S146 © 2005 Agricultural Economics Association of Georgia Globalization of the Frozen Potato Industry: Shiva S 5 India’s potato production in year 2010 – http://www.top5ofanything.com/index.php?h=01880761 (Access date: 18 March, 2013). 6 http://www.mcdonalsindia.com/aboutus/potato-farming.html (Access date: 12 March, 2014). 7 http://businesstoday.intoday.in/story/from-field-to-fries/1/3909.html (Access date: 13 March, 2014). 8 http://www.thehindubusinessline.com/industry-and-economy/agri-biz/mcdonals-potato-supplier-to-double-crop-area-in-gujrat3931837.ece (Access date: 14 March, 2014). 9 http://articles.economictimes.indiatimes.com/2012-04-02/news/31275543_1_double-business-paneer-new-products (Access date: 15 March, 2014). 10 http://articles.economictimes.indiatimes.com/2013-01-14/news/36331867_1_mccain-foods-foods-industry-outlets (Access date: 17 March, 2014). 11 http://www.science.gc.ca/default.asp?Lang=En&n=C9FF442B-1 (Access date: 18 March, 2014).