Chips are down for Dutch potato sector as demand for French fries plummets amid foodservice closures
03 Apr 2020 --- As restaurants, snack bars and fast food outlets remain on lockdown to contain the ongoing coronavirus outbreak, the Dutch out-of-home and foodservice markets have seen a sudden and steep decline in demand for fries. The majority of potatoes grown in the Netherlands are prepared by processors such as McCain, Lamb Weston, Aviko and Farm Frites. Amid the pandemic, the value of potatoes has dropped. Industry executives tell FoodIngredientsFirst how potato growers are facing huge losses and a dire forecast of a one million metric ton surplus of French fries.
“The value of potatoes has suddenly declined from 15 to 20 cents per kilo to basically zero. This means a negative impact of 150 to 200 million euros (US$160 to 213 million). Potatoes are stuck now at the growers’ potato barns and have no destination anymore,” André Hoogendijk, Director-General of Dutch agricultural organization Brancheorganisatie (BO) Akkerbouw explains.
“We work on using as many potatoes as possibly, preferably by human consumption. Also, considering the unusual circumstances, we’ve asked the Dutch government for financial aid. These potatoes were grown in 2019 and all costs have already been made. Growers have no way to mitigate these costs. However, a form of financial aid can help the growers get through these difficult circumstances,” Hoogendijk continues.
BO Akkerbouw has now launched a campaign to mitigate the predicted losses and reinvigorate the potato sector. In order to combat large-scale food waste, it is necessary to eat potatoes right now and to reduce the acute surplus, it stresses. Throughout April, the organization is encouraging more people at home to eat potatoes, especially fries.
The organization also notes how companies that are dependent on potato consumption are being squeezed. FoodIngredientsFirst has reached out to several French fries processors for comment.
Major changes in eating habits
As a result of restaurant lockdowns, restrictions and major changes in eating behavior in these unprecedented times, the consumption of French fries is falling rapidly in a country noted for its potato cultivation. However, neighboring Belgium is also feeling the impact COVID-19 is having on its potato sector.
“Belgium has a similar but smaller and slightly different problem. They also have a surplus, but the surplus is smaller because they are focused less on foodservice and out-of-home channels,” Hoogendijk adds.
“We hope that people will eat more potatoes, not just fries but all kinds, and reduce the large surplus of potatoes. Also, we hope that people will donate potato-based meals to people working in vital industries [such as hospitals]. Growers are not the only ones affected by the pandemic, we are all affected and we must help each other,” he stresses.
Coronavirus is dramatically changing food consumption and spending habits. Consumers have adopted different habits, dealing with reduced choice in retail as stocks run out amid panic buying in some regions. There are gains for online food delivery companies as more people order in and retailers have reported a surge in the number of online grocery delivery orders.
Earlier this week, FoodIngredientsFirst reported that supply chain disruptions could cause major food shortages across Asia. In light of the nationwide lockdowns and border restrictions spanning the Association of Southeast Asian Nations (ASEAN), Asia’s F&B industries are growing increasingly concerned about food security.
Regional associations are now calling upon governments to ensure the unhindered production and supply of food and beverages as each country tries to contain the outbreak of COVID-19. The key role that governments need to play to ensure a stable food supply is ensuring that the manufacturing of food and beverage products, ingredients and other raw materials, as well as distribution by the retail sector, can continue uninterrupted. They also need to ensure that travel restrictions, including border management controls, do not result in the disruption of food supply chains.
As previously covered in FoodIngredientsFirst, COVID-19 concerns contributed to a significant World Food Price dip in February. In Italy, industry reps voiced concerns that food excellence may “fall into the eye of the hurricane.” The closure of entertainment venues and restaurants in affected regions of the world has remained a prominent challenge.
Meanwhile, last week in Europe, industry stakeholders have begun voicing concerns about prolonged trade bottlenecks caused by tightened border control. In the UK, leading food policy experts are warning Britain’s supplies of fresh fruit and vegetables, which predominantly come from Spain and Italy, could be severely disrupted by the coronavirus crisis.
In light of the rapid developments related to COVID-19, FoodIngredientsFirst has launched a new daily news feed for the coronavirus-related information and insights you need to guide your business through this challenging period.
By Gaynor Selby
