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With the potato chip industry continuing to consolidate, a University of Idaho agricultural economics professor thinks micro-chipperies could help save potato farms too small to

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Potato Expert Sees a Future in 'Microchips'

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With the potato chip industry continuing to consolidate, a University of Idaho agricultural economics professor thinks micro-chipperies could help save potato farms too small to deal with international conglomerates.

"The good thing is, as you give consumers more choices, the total demand increases," says Joseph Guenthner, who spoke at this month's National Potato Expo, the industry's leading annual conference.

Guenthner likens the current state of the potato industry to the beer scene in the 1980s. American beer was then defined by Budweiser, which dominated the industry much the way Frito-Lay owns the chip industry today. Frito-Lay controls a 59 percent share of the chip market, making its chips - and "whiter is better" philosophy - king of the salty snack aisle.

While microbreweries haven't toppled Anheuser-Busch, craft beers have helped stoke consumer interest and provided an unprecedented outlet for ale artistry. Guenthner thinks eaters would be similarly drawn to small, regional brands of potato chips.

"Microbreweries are doing well because people like choices," Guenthner says. "Some people like dark potato chips, some people like thicker potato chips, some people like potato chips with more oil or in flavors Frito-Lay doesn't offer."

Frito-Lay once bought potatoes from as many as 600 different potato farms. Now, its supplier list includes just 60 names, leaving many growers without a buyer. Guenthner would like those growers to have the option of selling to smaller companies.

After Frito-Lay, the next biggest player in the chip industry is Proctor & Gamble, which makes Pringles, accounting for about 7 percent of the chip market. Cape Cod -- a small-batch facility in Massachusetts -- and Utz -- a nearly century-old Pennsylvania operation -- each control a 3 percent share.

"If it works in New England, why wouldn't it work in the Pacific Northwest?," Guenthner says.

The cost of launching a chip manufacturing plant is relatively low, Guenthner says. He recently traveled to Malawi, where a co-op of impoverished farmers has begun making chips. ("Potato chips are going to be an increasingly important food in poor countries," he says, citing the attractiveness of a high-calorie count in a malnourished society.)

According to Guenthner, the ideal "microchip" maker would be someone who "knows and likes chips." Previous potato experience might not matter, he says.

"It's like beer," he says. "Chips are something eaten for recreation and satisfaction."

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