Are High French Fry Orders a Positive Sign for the U.S. Economy?

Are High French Fry Orders a Positive Sign for the U.S. Economy?

French fries, a favorite classic in the world of fast food, have been making waves beyond the realm of taste buds. According to Lamb Weston Holdings, a major frozen potato supplier, the "fry attachment rate" – the percentage of customers ordering fries with their fast-food meals – has remained higher than pre-pandemic levels.

This seemingly simple statistic actually holds significant economic implications. Let's see why steady demand for french fries is considered a positive sign for the U.S. economy.

One might wonder why something as humble as french fry orders could be a sign of economic health. Well, it all comes down to consumer behavior. When faced with rising prices and inflation, people tend to cut back on discretionary spending.

However, the fact that consumers are still splurging on fries indicates a certain level of financial resilience. Even as inflation pinches pockets and economic uncertainties loom, this enduring love for a side of crispy fries suggests that consumers are willing to maintain their spending habits.

What is the Impact of Inflation on French Fries Business?

Inflation doesn't just affect fry sales; it impacts businesses in various ways. Lamb Weston, for instance, has felt the pinch in terms of rising potato contract prices due to inflation. Despite these challenges, the company remains optimistic about the resilience of its potato offerings in the face of an economic slowdown.

While restaurant traffic trends may remain unpredictable due to high interest rates, inflation, and lingering uncertainties, one thing is clear: french fries, and frozen potato demand in general, have shown remarkable resilience during tough economic times.

The global category for frozen potatoes remains solid, and businesses like Lamb Weston see long-term growth prospects despite the current economic landscape. This consistency in consumer preferences for fries offers a small but heartening glimpse into the broader economic picture.

As a testament to this positive outlook, Lamb Weston's stock saw a significant boost, jumping more than 9% during a recent trading session. While the economic landscape may be uncertain, the enduring love for french fries seems to be here to stay.

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How Big Is The French Fries Market?

The global French fries market is substantial, with a size of approximately USD 25.5 billion in 2022. It is expected to witness steady growth at a compound annual growth rate (CAGR) of 6.40% from 2023 to 2028, reaching a projected value of about USD 36.7 billion by 2028.

This market's growth is driven by factors such as the well-established fast-food sector in North America, where consumers have a preference for quick-service meals. The demand for French fries is also propelled by the convenience of frozen foods and an increase in disposable income, alongside the growth of online shopping and home delivery services. As a result, North America is expected to play a significant role in the market's value throughout this period.

Why Do Americans Call It French Fries?

The origin of the term "French fries" has its complexities. While many people, including Americans, have traditionally associated fries with France, the consensus points to their Belgian roots. Evidence suggests that french fries date back to the late 1600s in what later became Belgium. Potatoes were introduced to France later, in the 1770s, by doctor Antoine-Augustin Parmentier. However, potatoes weren't widely consumed in France until 1795 due to a famine.

As for the "French" in "French fries," one theory suggests it may have originated from old Irish, where "to french" meant "cut into pieces," and Irish immigrants brought the term to the United States. Another theory links it to World War I when Anglo-Saxon soldiers, encountering French-speaking soldiers eating fries, attributed the delicious potato sticks to France.

Despite these theories, the exact origin of the term remains somewhat unclear, but what's certain is that the popularity of "French fries" increased significantly with the rise of fast-food culture in the United States and beyond