Potato chip consumption up despite focus on healthy foods

by Ron Sterk
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WASHINGTON — Per capita potato chip consumption has risen almost 70% since 1960 despite the country’s interest in more healthful foods, the U.S. Department of Agriculture said in its latest Vegetables and Melons Outlook.

Potato chip consumption averaged 19.3 lbs per person in 2007, up from 11.4 lbs in 1960, the U.S.D.A. said.

Per capita disappearance of potatoes used to make traditional potato chips averaged 18.1 lbs annually during the 2005-07 period, up 12% from a decade earlier, the U.S.D.A. said.

"Chip consumers seem to be varied in demographics with the greatest share residing in the southern U.S. and earning middle incomes with mid-education levels," the U.S.D.A. said, citing Nielsen Homescan data.

The data showed 38% of potato chip consumers live in the South, about 23% each in the East and West and about 17% in the Central region. Per household share of chip consumption was highest in the East, though, the data showed.

Fifty per cent of chip consumers were in middle income households (between $30,000 and $69,999 annually), with 25% each in upper income and lower income ranges.

"Conventional thought hypothesizes lower income, less educated households are more likely to purchase potato chips," the U.S.D.A. said. But the Nielsen data showed most consuming households had middle income and mid-education levels. "Roughly 61% of chip consumers had some college, or a college degree, whereas only 11% of chip households held graduate degrees and 28% had high school education or less."

Racial composition of chip consumption showed 73% were Caucasian, 14% African-American, 4% Asian, 3% Hispanic and 6% "other," the Nielsen data showed. The U.S.D.A. noted that Census Bureau data show Hispanics make up 13% of the U.S. population.

"With Hispanics being one of the fastest growing segments of the U.S. population, that segment has valuable market potential for chip producers," the U.S.D.A. said.

The U.S.D.A. said retail prices for potato chips have averaged $3.41 a lb since 2000, compared with 45c a lb for fresh potatoes and $1.05 for french fries. The agency notedfrying oil was an expensive component of potato chip production, with oil content of chips ranging from 30% to 40%. It takes about 4 lbs of raw potatoes to make 1 lb of chips.

Currently, prices paid to growers for processing potatoes (both fry and chip type) averaged $6.25 per cwt in February, up from $6.17 in January and from $6.04 a year ago, the U.S.D.A. said. The average price paid for all of 2007 was $5.86 a cwt, down from $5.90 the previous year but 10% above the most recent five-year average of $5.32.

Fresh market potato prices have been even stronger, the U.S.D.A. said, running just below the previous year’s high and 20% above the previous five-year average.

Potato demand has been bolstered by strong exports. Shipments abroad of all potatoes in January-February totaled 4.1 million cwts, up 12% from the same period last year, the U.S.D.A. said. Frozen french fry shipments were up 10% for the two-month period. Potato imports were 5.3 million cwts, down from 5.5 million in January-February of 2007, with potato chip imports down 75%, to 29,000 cwts.

Preliminary estimates indicate total per capita potato consumption in 2007 was 126 lbs, up 2% from 2006, the U.S.D.A. said. Consumption of both fresh and processing potatoes increased.

"A slight decline in per capita use is expected in 2008 due partly to expectations for a smaller crop this fall," the U.S.D.A. said.

March 2008 shipments of chipping potatoes totaled 4 million cwts, down 7% from 4.3 million a year ago, the U.S.D.A. said.

"January-February shipments also fell below 2007’s pace, perhaps reflecting processor attempts to stretch 2007 fryer supplies in preparation for possible supply gaps in 2008’s crop," the U.S.D.A. said.

Still, "contingent on yields performing at expected levels," processors expect to have enough potato supply to make it "comfortably" through the 2008 processing year, the U.S.D.A. said.

This article can also be found in the digital edition of Food Business News, April 29, 2008, starting on Page 23. Click here to search that archive.

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