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Potato chips market on the rise

10:27 SGT June 12, 2017
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It is expected that consumers’ spending on food in the Middle East will reach $110 billion by 2020.

The global potato chips market is expected grow at a CAGR of 4.42% during the forecast period, according to Technavio’s latest report, which covers the market outlook and growth prospects of the global potato chips market for 2016-2020.

Based on distribution channels, the potato chips market is divided into various segments: Supermarket or hypermarket; convenience store; independent retailer; and others.

Technavio’s research study also segments the global potato chips market into the four regions: Americas, Asia-Pacific, Europe, Middle East and Africa.

Americas: Largest market for potato chips

The potato chips market in the Americas is growing steadily. The acceptance of quick meals such as burgers and sandwiches is one of the major factors driving the market in the Americas.

Chips are widely accepted and consumed as a favourite combination with burgers and sandwiches. Also, the busy lifestyle of people leads to the demand for snacks such as potato chips in the region. Supermarkets and hypermarkets accounted for 77% of the total sales of potato chips in the US in 2015.

Some potato chips are available in flavours unique to Canada, such as ketchup and “all-dressed” flavours. Canadian consumers prefer BBQ-flavoured hickory sticks and potato chips.

One of the popular brands and flavours launched in 2015 is Ruffles all-dressed flavour, which has garnered consumer interest in the Americas for its unique Canadian flavour. In April 2014, Lay’s Canada announced the return of its Do Us a Flavour contest, which invited fans across the country to submit their flavour ideas to be the next great potato chip flavour.

“The rising number of flavours and increasing demand for quick snacks are expected to contribute to the market demand during the forecast period,” says Arushi Thakur, one of Technavio’s industry experts for research on food sector.

Potato chips market in Europe

In Europe, countries such as the UK and the Netherlands are the major contributors to the potato chips market in terms of imports and consumptions. The savoury snacks market in Europe was valued at US$26.77 billion in 2015 and is expected to reach $34.62 billion by 2020. The consumption of savoury snacks, including potato chips, varies from country to country in Europe.
The savoury snacks market in the UK was valued at around $5.65 billion in 2015. There is a growing demand for frozen potato chips, private labels and numerous varieties from the UK, boosting the overall potato chips market in Europe. Private labels accounted for 22% of the packaged food market in Europe in 2015.

Potato chips market in Asia-Pacific

The market in Asia-Pacific, valued at $35.04 billion in 2015, has been experiencing strong growth over the past few years, and the same growth is expected to continue during the forecast period as well. By 2020, it is expected to reach $43.29 billion, according to Technavio’s Global Savory Snacks Market 2015-2019 report.

India, China and South Korea are the major contributors to the growth of the market in the region. An increase in disposable income and busy lifestyle are the two factors driving the market.

“In addition, the potato chips market in APAC has benefited from localisation of flavours in Japan as consumers prefer buying local flavours available in their country. However, compared to cookies and candy, Chinese still consume a relatively small amount of potato chips. Therefore, there is huge potential for market growth in China,” states Arushi.

Potato chips market in Middle East and Africa (MEA)

An increase in disposable income and busy lifestyle are the major two factors boosting the potato chips market in MEA. It is expected that consumers’ spending on food in the Middle East will reach $110 billion by 2020.

Consumers’ spending on food in the UAE alone was $21.3 billion in 2013 and is expected to increase to $25.1 billion by 2016.

In countries such as Saudi Arabia, Egypt, Turkey, Jordan, Bahrain and Qatar, PepsiCo’s Frito-Lay division holds the major share of the market.

The top vendors in the global potato chips market highlighted in the report are: Calbee Foods, Herr, PepsiCo, Intersnack Group, Snyder’s-Lance and UTZ Quality Foods. It is expected that consumers’ spending on food in the Middle East will reach $110 billion by 2020.

Notion Group, a snacks manufacturer, expanded its manufacturing facilities in Dubai and Saudi Arabia in 2013 to fulfil the rising demand for chips and chocolates. The company is experiencing a huge demand for its products from other Muslim countries because its products have Halal certification.