Potato is probably the most popular food item in the Indian diet and India is one of the largest producers of potato. It is grown all over the country with Uttar Pradesh growing the maximum quantity. Globally, potatoes stand out as the most popular tuber crop. Potato processing is among the fastest-growing industries. It is not surprising that world market analysts suggest that the current potato processing market has a value of approximately 40 billion US dollars.
Potato is a very rich source of starch. It also contains phosphorus, calcium, iron and some vitamin C & A. The protein calorie ratio is high. Boiling potatoes increases their protein content and almost doubles their calcium content. It is vastly consumed as a vegetable and is also used in various forms such as starch, flour, alcohol, and dextrin and livestock fodder.Besides being used as a daily food item in various vegetable preparations, potato today increasingly finds use in the form of chips or wafers as snacks food. The potato chips and wafers are popular processed food items that give considerable value addition to potatoes.
The rise of the 'snacking' phenomenon is now fairly well documented on an international scale, although the rate and extent of development do vary from country to country. With the breakdown of formal meals, consumers are increasingly tending to eat a number of smaller snacks during the day rather than three full meals. Furthermore, in an increasingly fast paced financially well-off society there is growing demand for snacks that are easy to buy, store and eat, with an increasing number being eaten 'on the move'. With this background, the potato wafers and chips market seems to hold good growth prospects.
According to global snack market analysis, potato chips account for an average of 35% of the total savory snacks market. The main consumers of potato chips and wafers are families especially in urban and semi-urban areas. Besides, hotels, restaurants, canteens, army establishments require potato chips in significant quantities.
Potato is a highly nutritive food and the crop can be produced in 90 to 100 days. Its wide adaptability in planting and harvesting makes it an ideal crop to grow between two major crops. India's potato production has seen a phenomenal increase since the 1950s, mainly due to strong demand from the processing industry and remunerative returns. According to the Central Potato Research Institute (CPRI), the area under potato rose by almost 547% since the 50s, while yield rose by 267% and overall output jumped by 146%. In 2008-09, potato production (which is a rabi or winter crop) is estimated to be around 28 million tonne as against 25 million tonne achieved last year. India' potato output is likely to rise by 5.1 percent to a record 32.7 million tonnes in 2009/10.
India ranks third contributing around 7.5% to the world’s production. Production wise India has always remained in the top ten since last twenty years. The states of Uttar Pradesh, West Bengal, and Bihar accounting for more than 75 percent of area under cultivation and about 80 percent of total production; Europe is the largest per capita consumer, followed by North America and Latin America. Fresh potatoes are exported to Sri Lanka, UAE, Mauritius, Nepal, Singapore, Maldives, Kuwait etc.
The overall size of the snack food market is estimated at Rs 45 to Rs 50 billion. The market is reported to be growing at 7 to 8 % annually. Potato chips is estimated to constitute nearly 85% of India’s total salty snack food market of about Rs 2,500 crore. In the Rs 19 billion branded(organized )snacks market, constituting over 40% of the market by value, Frito-Lay is estimated to command a market share of 45%, followed by Haldiram at 27% and ITC at 16%. The branded snacks market accounted for 16% by value and 12% by volume sales in 2007. According to a projection by Euromonitor International, the branded snacks market would reach a value of Rs 35 billion by 2012.
The organized snacks category is sub-divided into the traditional segment (bhujia, chanachur and the like), Western segment (potato chips, cheese balls etc.) and the newly established finger snacks segment, which is an adaptation of traditional offerings in the western format.
The leading brands in the market are Lays, Bennie’s, Uncle Chips, Ruffles, Bingos and others.
Looking to the estimated demand of nearly 50 million tonne of potato by 2020, for a nearly 1.3 million population, the production and productivity will keep rising. According to a study by McKinsey & Co, the Indian food market will grow two fold by 2025 with the rapidly growing Indian economy and improving lifestyles of Indians contributing in a big way to this growth. The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4.1 per cent according to market survey. With a growing population and rising per capita income with different lifestyles consumers are willing to pay a premium for both value-added private and branded products, creating immense opportunities for manufacturers and retailers in this sector.
In this article, you will read about several aspects of the potato and potato products industry. These include:
- How to set up a potato processing business plan
- How to prepare a project report on potato onion flakes
- Small scale business idea in potato flakes manufacturing project
- Case study - potato and potato-based products industry
How to set up a Potato Processing Business Plan?
Are you planning to start processing potatoes into various potato-based products? If your answer is yes, you will find the guidelines below helpful in setting up a potato processing business plan.
1. Review target market potential
One advantage you will have as a manufacturer of potato products is market availability. The global demand for potato chips or crisps is very high. You should know that you are about to enter a market already inhabited by several well-established manufacturers.
2. Legal Obligations
As you set up your business plan, you should consider all applicable statutory requirements. These include getting clearance from the registrar of companies, environmental management authorities, and trade licensing.
If you intend to invest in potato flour production or any other food product at all, you should also consider clearance by the Food Safety and Standards Authority. Find out what other legal obligations in your country relating to potato product and potato chips processing.
3. Site Selection
Whenever you think of the ideal location for a small scale manufacturing business in the potato industry, these two factors should ring in your mind:
- The nearness of the factory to potato-farming zones, including accessibility by road
- Proximity to the targeted market
4. Supply of Fresh Potatoes
Consider the number of potatoes produced in your country or site locality. Find out the number of existing manufacturers and their demand for potatoes. Similarly, consider availability and affordability of cooking oil, food additives and preservatives, and packaging materials.
5. Machines and Equipment
Some of the machines you need to consider as you work on a business plan include:
- Potato washing, peeling, and chopping machines
- Blanding machine
- Packaging and sealing machines
6. Manufacturing process
Do some research and identify an ideal cost-effective manufacturing process and technology relevant to your desired product.
7. Marketing Strategy
When scaling a small business, it is essential to decide on the mode of selling your product.
Small-scale business idea in Potato Flakes Manufacturing
When planning for small-scale business ideas, one thing that will hardly cross most would-be investors is manufacturing. Many look at it as expensive to invest in manufacturing projects.
However, many small manufacturing business ideas do not require heavy machinery or financial inputs. Simple manufacturing business ideas such as potato flakes manufacturing need minimal inputs to start.
I will give you just a few profitable small-scale business ideas in potato flakes processing that you might want to consider:
1. Supply of fresh potatoes
Potato flakes industries rely heavily on a steady supply of potatoes. The global demand for potato flakes is on the rise. At the same time, potato production is on a declining path in most continents.
With the above factors in mind, sourcing for potatoes is becoming a tedious task for potato flake manufacturers. They would instead outsource this service.
2. Supply of Potato Flakes
You do not need to manufacture potato flakes to trade in this precious commodity. You can be that link between the manufacturers and consumers. Potential consumers for potato flakes include various food processing firms that use potato flakes to prepare assorted snacks.
3. Baking Industry
Bakeries worldwide are increasingly adopting potato flakes in baking pancakes, biscuits, bread, and waffles. Bakeries are among the types of small-scale business options with very low starting capital.
How to prepare a Project Report on Potato Onion Flakes?
Are you thinking of potato flakes as a possible business idea? If you intend to start a potato flakes manufacturing project, one of the preliminary steps is to prepare a business project report. Here are some tips to guide you in preparing a project report on potato onion flakes.
1. Establish availability of fresh potatoes
Fresh potatoes are the raw materials for potato flakes. Your report needs to establish a steady, sustainable supply of potatoes.
2. Survey your Market
As you explore your market potential for potato flakes, the report should focus on the following:
- Demand for fast foods like cutlets, burgers, and assorted processed meats
- The current level of production of potato flakes
- Current retail prices
- Usages of potato flakes in the local community
- Project description
Describe the properties and characteristics of your potato flakes. How different or unique are they going to be? What process and technology are you going to use?
3. Infrastructure and Equipment
Identify the basic facilities and machines you will require and their costs.
Case study – Potato and Potato-based Products Industry
A case study on potato and potato-based industry provides you with the relevant details of the industry that prospective profitable small-scale industries need to know. Here is an overview of the global potato and potato-based products industry.
1. Market Potential
Because of the global popularity of fast foods, potato production and processing are among the fastest-growing sectors.
Over one hundred countries in the world do commercial potato production. The largest producers are China and India. Other notable global suppliers of potatoes are Russia, the US, and Ukraine. Increasing global demand for processed food drives the demand for fresh potatoes. Other consumers of potatoes are animal feeds, adhesives, and organic fuel manufacturers.
Owing to its market potential, potato production is one of the best manufacturing business ideas.
2. Current Industry Status
There are over 420,000 industries in the global food-processing sector. This sector has a market value exceeding 2.2 trillion US dollars. These industries rely on a steady supply of either fresh potatoes or potato products e.g., potato flakes, powder, starch, or flour.
Key players in the industry are fast-food chains and restaurants, frozen potato production, and chips and potato pellets industries. There are more potato-processing factories in Europe and North America than in other contents. These include both small-scale manufacturing industries and the large dominant players.
3. Key Challenges
The major constraints that will shape existing companies’ operations and new manufacturing business ideas are as follows:
- Growing health concerns about the consumption of fast foods, e.g., obesity and diabetes
- High potato storage and transport costs
Despite these challenges, the trends for consumption and demand for fast foods in on the rise. We expect these trends to continue rising over the next decades, providing unlimited options for small scale manufacturing business ideas.
