How Will Nacho Fries Affect the Potato Supply?

Published online: Jan 12, 2018 Articles Chris Campbell
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Source: The Food Institute

When ordering tacos from a foodservice outlet, the last thing you might expect would be this phrase: "Would you like fries with that?"

Yet, on Jan. 25, across the nation, diners at Taco Bell will be presented with that question when the chain launches Nacho Fries. However, at the Food Institute, another question is on our minds: How will this affect the prices of French fries for the industry?

Let's do some quick math: If each of Taco Bell's approximately 6,600 units sells just 100 pounds of Nacho Fries each day, the company's total annual usage would be about 240 million pounds. This number represents roughly 1.5 percent of the 15.7 billion pounds of frozenfrench fries produced annually. For reference, McDonald's units sell an average of 250 pounds of french fries per unit every day, as reported by Bloomberg (April 19, 2012).

In 2014, Americans consumed 112.1 pounds of potatoes per person, according to the National Potato Council. Of that total, 33.5 pounds were fresh potatoes, with the remaining 78.5 pounds processed. According to USDA, the majority of processed potatoes Americans eat are french fries (reported by CNN on June 14, 2017).

When throwing this question around the office, I found that most us believe that the 100 pounds per day number we used in the hypothetical situation above is likely below what will actually be encountered, especially in the opening days of the product's availability. However, to compound matters, Taco Bell already sells a similar product with its Cheesy Fiesta Potatoes. Will the new product cannibalize sales from the the old favorite, or will the two coexist?

Certainly, a lot remains to be seen regarding french fry pricing in the U.S. in the wake of Taco Bell's new product.