The processing of potatoes in India started growing with the openings of large-scale organized processing by multinationals and indigenous players.
The pattern of the potato industry in India suggests that the demand for potatoes for processing purposes is expected to rise rapidly over the next 40 years for French fries (11.6% ACGR) followed by potato flakes/powder (7.6%) and potato chips (4.5%). The demand for processing quality potatoes is expected to rise to 25 million tons by 2050. This is similar to what we earlier reported for other regions.
Rapid Expansion
Potato processing is carried out by the organized and unorganized sectors, according to the Indian Council of Agricultural Research (ICAR)-Central Potato Research Institute (CPRI). The organized sector mainly involves large manufactures with brand names, whereas small manufactures that are preparing processed potato products for the local market without any brand name are defined as the unorganized sector. The organized sector mainly prepares French fries, Aloo Bhujia, potato flakes, and flour. Potato chips are prepared by both organized and unorganized sectors. Along with potato chips, dehydrated potato products such as potato shreds and potato chips are also made by the unorganized sector.
Potato chips have been considerably popularized by large potato chip manufacturing companies. With increasing popularity among all the sections of society, potato chips comprise 85% of the Rs. 2500 crore salty snack business in India. The sector is still increasing with the production of potato chips from 0.38 mt in 2006-2007 to 0.61 mt in 2010-2011 and is expected to increase further to 3.55 mt by the year 2050.
French Fries
In India, McCain is the largest French fry company. Approximately 0.6% of potato production was used for the preparation of French fries in the past, but this figure has since grown considerably. Although India has huge French fry manufacturing capacities, at present its actual processing is quite low. The limited number of outlets serving the product is one of the major reasons for its low utility and high price. However, the demand for French fries is increasing gradually. Generally, frozen French fries (par-fries) are prepared and sold.
Dehydrated potato products are the most common processed potato product in the rural and semi-urban areas in India. Solar dehydration of potatoes is very popular in several states like Maharashtra, Gujarat, U.P., and M.P. and remains a viable alternative to expensive and sophisticated potato processing technology. Companies such as Potato King, Merino Industries Ltd., and Satnam Agri are leading in the manufacturing of potato flakes and flour. Such products are preferred in small towns or rural areas because they are much less expensive.
Sectors: Organized vs. Unorganized
Potato chip production by the organized sector increased rapidly after the introduction of the liberalization policy of the government of India. The organized sector produces over 30,000 tons of potato chips per year. The popularization of potato chips by companies such as Frito Lay India has led to fast incremental growth in potato chip manufacturing capacities. Frito Lay India and ITC retained approximately 31.55% share of the potato chips market during 2010-2011 and today remains the leading foreign player. Some other organized players at national and regional levels include Haldiram, Kishlay, Balaji, Uncle Chips, etc.
Potatoes are processed at a small scale in rural India. Potato chips produced by the unorganized sector costs Rs. 150 to Rs. 200 per kg. Approximately 377,000 tons of potato chips are prepared by the unorganized sector. In Kolkata alone, about 200 small units are producing processed products. Small scale potato processors are found in almost all cities and towns in India and they produce a variety of products: potato chips, potato lachha, potato bhujia, potato pops, potato papads, dehydrated chips, as well as many other variants resulting from the potato processing chain.
