Consumers, North America, Promotion/Marketing, Retail, Trade/Markets/Prices, Trends

U.S. potato sales strong in marketing year ‘unlike any other ever experienced’

The marketing year that ended in June 2021 was unlike any year the potato industry has ever experienced, says Potatoes USA in a news release issued today. “With pandemic restrictions ebbing and flowing from June 2020 to July 2021, sales at foodservice fluctuated while retail purchases remained extremely strong throughout the year,” the industry body says in the release.

To help the industry understand the demand for domestically produced potatoes and better understand the sales in the domestic market, Potatoes USA conducts an annual sales and utilization study. This study utilizes retail data from IRI, estimated foodservice sales from Technomics, and import and export data to provide additional clarity of domestically produced potatoes.

The results showed an overall decline of U.S. potato use for the July 2020 – June 2021 marketing year. To be more specific, there was a 6% decrease in the fresh weight equivalent volume. This decrease was due to an 8% decline in sales to foodservice and the leveling of retail sales from the peak panic buying at the end of the previous marketing year. This year’s tight supplies of U.S. potatoes, particularly frozen products, were made up for with a 12% increase in total imports.

Despite the uncertainties in the international markets and the extreme problems with international shipping, U.S. potato exports increased by 4% for the marketing year. The rebound in exports was led by a 9% increase in fresh potatoes, a 10% increase in potato chips, and a 2% increase in frozen exports, which accounted for 51% of the total. The only product to decline was dehydrated potatoes, down by 4%.

Forty percent of U.S. grown potatoes were utilized for frozen processing, followed by fresh processing at 25%, chip processing at 23%, and dehydrated processing at 7%. Production of dehydrated potatoes suffered from tight raw product supplies and serious labor issues at the plants.

Looking at sales of potatoes in the domestic market, comprised of domestically produced potatoes as well as imports, retail sales are up compared to three and five years ago, but the declines at foodservice were too great to overcome. For the past 20 years, the trend has been for more and more sales to go through foodservice compared to retail. This trend has been reversed the past two years, but it is expected that foodservice will begin to account for an ever-greater share, though not right away.

Total sales at retail were down less than 1%, primarily caused by a 2% drop in fresh potatoes and chips, as sales in the spring of 2021 did not meet the extreme sales during the panic buying in the spring of 2020. Positively impacting this were sales of frozen products, up by 5%, and sales of refrigerated products, up by 5%.

Foodservice had an 8% decline in total sales, but frozen potato sales were only down by 4%, because the quick-service restaurant sector was able to recover the fastest as consumers continued to order fries as a takeout item. Fresh potato sales were down by 11% as full-service restaurants have suffered greatly from restrictions and now labor shortages. Chip sales were down by 19% as the beyond restaurant sector had the largest decline overall and loose chips from large bags were replaced by the single-serving bags, which contain less volume.

While markets are settling into a new normal, it is very important to remember that demand for potatoes remains strong, and potatoes are the #1 vegetable at retail, the top side dish at restaurants, and America’s favorite vegetable, Potatoes USA says.

Source: Potatoes USA. Original news release here

Editor & Publisher: Lukie Pieterse

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