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Steady growth for Belgian potatoe industry but rising costs cast a shadow

The Belgian potato processing industry processed more than 6.2 million tons of potatoes last year. The sector thus sharpens its own record from 2019 by no less than 18%. Employment in the sector is rising accordingly, with the limit of 6,000 employees in sight.

Christophe Vermeulen, CEO of Belgapom, the federation for the Belgian potato industry and trade: “These figures testify to the resilience, flexibility and strength of our sector. The difficult corona years have been digested and despite a few summers with difficult harvests due to the extreme weather, the potato sector has managed to strengthen its international leading position. Belgium is the country of the potato and fries are king. The sector also confirms its social and socio-economic importance in times when our agriculture is constantly under attack.”

The numbers speak for themselves:

• More than 6.2 million tons of potatoes, processed into fries, puree products, crisps, flakes and granules or pre-cooked potatoes.

• 2.8 million tons of frozen fries: no less than 25% more than the previous record from 2019 and 31% higher than in the first corona year 2020.

• 257,345 tons of refrigerated fries: also a record. 12% more than reference year 2019 and no less than 57% more than in corona year 2020.

• Chips, mashed potatoes, croquettes and other specialties: 700,000 tons.

• 5912 employees. That is 41% more than in 2020 (a year with a strong decrease), but also, more significantly, 18% more than reference year 2019.

• Business investments: +300 million euros.

• Export destination (world): 3,022,473 tons or 82% of production. That is 12% more than in 2019.

• Destination Belgium: 608,690 tonnes or 18% of production.

Vermeulen: “As a sector, we can present fantastic growth figures and we are proud of that. The picture is not complete however without mentioning the rise in production costs in 2022. The Ukraine crisis caused a shortage of sunflower oil and extortionate prices for the alternatives. Moreover, making frozen fries is extremely energy-intensive, which reflected in a high energy bill. In addition, the costs for other raw materials and packaging rose more than sharply, which means that, in addition to record processing and turnover, we can also present record costs: the sector spent more than three-quarters of a billion euros on oil, energy and packaging alone. Add to that the increased costs of the potatoes themselves and the indexation of wages and you can imagine that all that glitters is not all gold.”

Predictions for 2023 are still a bit premature. Exports are doing well and domestic consumption remains stable. The extreme costs of energy and transport seem to be behind us for the time being. Inflation remains a concern despite forecasts pointing towards a stabilisation. There are also concerns about finding employees. Ambitious, growing companies need good people with the right skills, but they are increasingly difficult to find. New taxes, such as the litter tax, are also placing an increasing burden on the processing industry. The sector has the most headaches about its raw material, the Belgian potato.

Christophe Vermeulen: “The evolution in agriculture naturally causes us great concern. We want a sustainable agricultural sector with investment security and prospects for the farmer and the agro-food industry. We strongly believe in the sector's own innovative power. We believe in cooperation with all actors, something we proved during the negotiations on the manure action plan. The files are piling up: nitrogen, MAP (manure action plan – red), erosion legislation, nature restoration law, phasing out crop protection, the water problem... The impact on arable farming and therefore our industry is enormous. Where can and may we still grow potatoes within 5 years? We hope that, as in other European countries, our policymakers will finally fully defend the crown jewels of their food industry. In France, Spain or Italy this is self-evident. Here, however, it remains silent and that is incomprehensible.”