Turning Waste Potatoes into Profit

Distillique regularly receives inquiries from individuals that want to explore the feasibility of different raw materials for use in producing spirits – mostly because they have easy or cheap access to those raw materials.

This is specifically true for farmers, as fruit and vegetables that do not conform to market standards may still be successfully used for fermentation purposes to make spirits.

One example would be the use of potatoes, and in large enough quantities it can be exceedingly profitable.

Examples of Using Waste Potatoes in Distillation

In the United States, in Steuben County, the Department of Agriculture launched an in-depth study to check the feasibility of utilizing waste potatoes to generate additional income streams for the farmers in the area. What they found was that farmers in the county throw away anywhere from 10 to 40 percent of their potato product because it does not meet the specifications of major potato customers. Similar figures in South Africa seems to be even higher. These waste potatoes are too large, small, or irregularly shaped for potato chips.

To provide an outlet for these “waste potatoes”, the Steuben County Agricultural Economic Development Project along with the American Distilling Institute put together a comprehensive financial feasibility study of developing a craft vodka distillery that used these potatoes. Based on the projections, as much as $500,000 in new revenue could be paid to farmers for the potatoes used for craft vodka production over the first 10 years of operation.

While the direct employment at such a distillery is small, businesses in this industry have a high jobs multiplier. In the case of the distillery, the multiplier is 5.17, meaning that for every job created at the distillery, an additional 4.17 jobs are created elsewhere in the economy. By year 10, nearly 19 indirect jobs could be created in addition to the 4.5 jobs created at the distillery.

Is it Financially Feasible to use Waste Potatoes as Raw Material?

Recent calculations we have made during some feasibility studies have indicated that, depending on the conversion ratio of the carbohydrates contained within the potatoes (and this is again influenced greatly by the cultivar) it is possible to achieve nett profit rates between R7 000 and R14 000 per ton of potatoes. If we compare that to an average market price for potatoes of R3 000 per ton, we can clearly see the benefit to potato growers and bulk purchasers.

Global Vodka Production

Vodka Factoid: Less than 1%of global vodka production utilizes potatoes as distillation feedstock. There is a common misconception that most, if not all, vodkas are made from potatoes. In fact, 99% of vodkas in the world are distilled from grain – corn, wheat, or rye – using the least costly grain available.