Title: Gujarat: Emerging as a Global Powerhouse in the Potato Market
Gujarat’s ascendancy in the global potato market is a remarkable journey from local cultivation to becoming a significant exporter of potato products. This evolution has transformed not only the regional economy but also impacted the global landscape of potato production and export. Nearly two decades ago, McDonald’s introduced French fries to Gujarat, delighting locals with their crunch. Today, Gujarat’s potatoes are making their presence felt far beyond its borders.
One of the significant milestones in this journey was Prime Minister Narendra Modi’s inauguration of the state-of-the-art potato processing plant by Banas Dairy in Deodar. This event marked the beginning of a new era where Gujarat’s potato products, particularly French fries, began to be exported to major markets such as the United States and Canada. These countries are home to global fast-food giants like McDonald’s and McCain, which speaks volumes about the quality and potential of Gujarat’s potato produce.
This remarkable transformation is supported by homegrown companies such as Amul, which has been instrumental in processing and exporting frozen potato snacks. As India’s largest food product organisation, Amul procures high-quality Santana potatoes from its dairy farmers in Banaskantha, reflecting a significant integration of agricultural and industrial processes. The company has equipped its plant with advanced machinery from the Netherlands’ M/S Kiremko, a leader in potato processing equipment. This infrastructure allows Amul to process 50 metric tonnes per day, contributing to the state’s export capabilities.
Although Gujarat contributes only 6.3% of India’s total potato production, it has been pivotal in transforming the country from a French fries importer to a significant exporter. The state’s favourable climate supports the cultivation of several potato varieties suited for manufacturing frozen products, which has attracted substantial investments from major companies. HyFun Foods, McCain Foods, and Iscon Balaji Foods, three of the biggest manufacturers of frozen potato-based products, have set up substantial operations in Gujarat. Their combined investment, which exceeds Rs 1,500 crore, signifies confidence in the state’s agricultural and industrial ecosystem.
Iscon Balaji Foods, for instance, has carved a niche as Asia’s largest dehydrated potato flakes manufacturer. The company began its journey in 2012 by addressing challenges faced by farmers, who relied on just a few potato varieties and struggled under market fluctuations. By introducing new European potato varieties and engaging in contract farming, Iscon Balaji has expanded its farming operations across 19,000 acres, with plans to grow this to 25,000 acres across Gujarat, Punjab, Madhya Pradesh, and Rajasthan.
Similarly, Hyfun Foods, which already operates a facility in Mehsana, has invested hugely to increase its processing capacity. Their new plant will double their current capability.
These expansions highlight a broader strategy adopted by manufacturers to meet the growing demand for frozen potato products from the HoReCa (hotel, restaurant, and catering) segment and quick service restaurants. This growth strategy is not limited to local production but also includes expanding sourcing networks and diversifying product offerings.
Additionally, equipment manufacturers from countries such as the Netherlands and Belgium are eyeing Gujarat as a potential base for their operations, further strengthening the state’s position in the global potato market. Experts believe that India could become a leading exporter of frozen potato snacks in Asia, a region currently reliant on imports from Europe and the US.
Contract farming has played a crucial role in transforming the lives of many farmers in Gujarat. By providing stability against market fluctuations, it has enhanced farmers’ livelihoods despite challenges such as variable weather conditions. For example, Shailesh Patel, a farmer from Iqbalgadh village, noted that while unfavourable weather may impact the production in many cases, contract farming offered a semblance of financial security through fixed pricing.
Banaskantha, known as the largest producer of Santana potatoes globally, is at the forefront of this agricultural renaissance. The superior quality of Santana potatoes, due to their oblong shape and golden hue, makes them a preferred choice for French fries production over the second-grade, white-coloured Frysona variety.
Gujarat’s journey from a net importer to a strong exporter of French fries is nothing short of impressive. In 2007, India imported 6,000 metric tonnes of French fries; while the export volume of french fries in 2023 stands at approximately 30,000 metric tons with an estimated export value of USD 20-25 million. This success story is a testament to the synergy between local innovation, international quality standards, and strategic agricultural practices.
As the global market for frozen French fries continues to grow – estimated at around $16 billion USD in 2023 with an estimated CAGR of 5-6%– Gujarat’s role is expected to expand further. With major players like McCain, Hyfun, and Iscon Balaji leading the charge, the state is well-positioned to capitalise on its strategic investments and market insight, ensuring that its potatoes remain a big fry in the global food industry.
