Across Regions

Rising potato prices may pressure fry deals

In the past two years, restaurant brands have turned French fries into a battlefield, offering deals and new twists to lure in customers. But price pressures from a poor recent potato crop in Europe may soon complicate that strategy.

“Europe is having one of the worst potato crops in 40 years,” said Akshay Jagdale, packaged food analyst with Jefferies Inc., on a webinar Wednesday. “The harvest is now complete. And the shortage in Europe is likely to start playing through in the export markets pretty soon.”

Belgian open-market potato prices are 11 times higher than this time a year ago, for example, according to analyst Cedric Porter, editor of the United Kingdom-based World Potato Markets. And those price hikes are expected to ripple through the global markets.

For quick-service brands, especially, fries are not only a staple side item and a fixture on their value menus but they have become an area where companies can offer special marketing promotions and menu creativity.

While large restaurant brands’ commodities contracts can insulate them from large swings in prices, the European potato shortage will likely impact promotions and pricing. 

Read the full report on Nation’s Restaurant News