March 2009
Fast Food Fries

At the Potato Expo meeting in San Antonio in January, one of the presenters brought up an interesting point about the future of potato products at quick-service restaurants.

Jeff DeLapp, president of Lamb Weston U.S., presented the state of the processing industry at the conference. More than 90 percent of frozen potato products go to foodservice customers, so that portion of the industry is tied to how well the restaurant industry is doing. Growth in the foodservice segment was strong in 2008, but dropped off in September, and the outlook for 2009 is for no growth in 2009 for quick service and a decline in sales for casual and fine dining restaurants.

DeLapp pointed out an interesting thing to happen on fast food menus. Over the last few years, nearly every chain has adopted a value menu” that allows customers to pick out cheaper items. He said these value menus hurt potato processors because customers are choosing to buy another $1 hamburger instead of $1 fries.

Combo meals, which traditionally have always come with a sandwich, fries and drink, are now being offered with alternatives to fries. Customers can substitute a salad or fruit item instead.

Frozen processors and their grower suppliers have relied on the traditional model of fast food purchases to support their businesses. It may be time to start looking at alternative opportunity or ways to encourage customers to buy French fries with their meals.

Young males, in particular, are more likely to see the “value” in buying second (or third or fourth) hamburger and no fries. Processors need to work with their chain buyers to promote fries or risk losing a share of the largest frozen market.

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