Impacts of foreign direct investment and advertising on the export demand for US frozen potatoes
✍ Scribed by D. Kent Lanclos; Stephen Devadoss; Joseph Guenthner
- Publisher
- John Wiley and Sons
- Year
- 1997
- Tongue
- English
- Weight
- 219 KB
- Volume
- 13
- Category
- Article
- ISSN
- 0742-4477
No coin nor oath required. For personal study only.
✦ Synopsis
Import demand for US frozen potatoes is estimated for Japan, Mexico, Philippines, and Thailand. Each country represents a different tier of import volume and market development (Japan-largest, most developed; Thailand-smallest, least developed). Import demand in Japan is primarily influenced by own-price and income. In the three smaller and newer markets, however, potato industry advertising and foreign investments by the US food service industry are found to be significant factors influencing import demand. Results suggest substantial growth potential exists in the export market for US frozen potatoes. ᭧ 1997 John Wiley & Sons, Inc. The US frozen potato industry has grown rapidly. In 1963, frozen potato production totaled 0.9 billion pounds; by 1993, it had increased to 7.3 billion pounds. 1 The primary frozen potato product is french fries, which has accounted for about 83% of frozen pack in recent years. 1 Products such as hash browns and tater tots comprise the remainder. The driving force behind the increase in frozen potato production has been the growth of the food service industry, particularly fast food restaurants. Aggregate revenues of the fast food sector increased by 1196% to $80.24 billion between 1970 and 1993, reflecting US consumers' desire for greater convenience and time-saving in meal preparation. The frozen potato industry has benefited greatly from this expansion-approximately 90% of US frozen french fry production is destined for the food service market. There is growing evidence, however, that the domestic food service market is maturing, with the result that future growth opportunities will be limited. For example, annual growth in aggregate revenues of the fast food sector has averaged 5.50% since 1989, considerably lower than the 13.67% average growth between 1970 and 1988. 2 As a result, many food service firms are looking abroad for new markets. McDonald's, in particular, has been at the forefront of foreign expansion by food service firms