A Melbourne inventor has worked out how to melt down potatoes like cheese, and has spent the past 12 years creating a range of food substitutes with liquid potato.

Potato Magic's Andrew Dyhin believes his invention could shake-up the food processing sector, creating a believable, plant based alternative to cheese, milk, custard and ice cream.

A commercialised product would also provide a home for the hundreds of thousands of Australian potatoes that never make it to the supermarket, or to the dining table.

"When we look at the world today, and we see how important food security is, and getting the maximum amount of food from a hectare of land, having a way of using potato in all its current forms and all the by-product from potato processing and stuff that's left in the paddock, the stuff that gets thrown in the dump. This can do that.

"We can use almost 100 per cent of the potato that comes into the process and get a useable product out of the end."

Mr Dyhin is tight lipped about the secret process, but said he discovered a way to liquefy potatoes by observing advancements in laboratory equipment.

Since 2004, he's been perfecting the range of uses for the product and is currently looking for investors to come on board and scale up production.

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Once liquefied, the raw potato can be formed into blocks, suitable for use in kitchens, where it can be cubed and put in salads, or shaved and used in mash or to make gnocchi.

Once dried out again it can be used in snack foods.

Using essences and salt, the potato can be transformed into a range of dairy analogues; like cheeses, custard and even ice cream that contain levels of 96 per cent potato and more.

Mr Dyhin said his product was also suitable for use in meals dropped into disaster zones and even for use by the military.

"We can make potato shelf-stable, so depending on the packaging that can sit on your shelf ready to use without refrigeration," he said.

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Mr Dyhin said he was often challenged by consumer perceptions of a "liquid potato", with many associating the notion with either eating too many carbohydrates or with the rotting process potatoes go through.

"I can really only get people to trust the product when they can actually taste it, feel it and look at it."

But Melburnians approached by ABC Rural today did not need convincing.

"Cheese and potato are my two favourite foods, so think about what this means for poutine (a Canadian dish made with French fries and cheese), it's an incredible idea," a woman in her early 20s said.

Her friend agreed remarking, "I'm not a vegan, but it sounds like a great idea for them".

Perhaps a generation comfortable with food hybrids like the cronut, the cruffin and rainbow lattes are more easily impressed by new food innovation than their parents.

One mother asked whether she would be keen to try melting potato said it might be more appealing to her teenage son, who might incorporate it into toasted sandwiches.

But her friend simply said "it makes me feel fat".