Seasonings and Spices Market is Expected to Reach US$16.6 bn by 2019, Expanding at a CAGR of 4.8% between 2013 & 2019
Globalization and changing demographics have been the key drivers of the global seasonings and spices market. The rising globalization has attracted consumers from around the world towards ethnic cuisines. While this considerably fuelled the use of ethnic seasonings and spices in western food it also construes the robust expansion of the market worldwide. For instance, despite its smaller size compared to the other countries in Europe, the U.K. accounts for approximately 30% of the annual turmeric imports in the European Union, connoting the popularity of Indian cuisines in the country.
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Furthermore, Indian and Chinese cuisines hold top slots in the takeaway food category of the U.K., surpassing other European foods, including Italian. According to Transparency Market Research (TMR), a curry restaurant in the U.K. serves over 2.5 million customers weekly, of whom majority are from the U.K.
As per TMR, the global seasonings and spices market is poised to expand at a CAGR of 4.8% between 2013 and 2019, to reach US$16.6 bn by the end of 2019. The market was valued at US$12.7 bn in 2012.
Q: How does the fragmented nature of the global seasonings and spices market effect its trajectory?
A: With the top six companies holding a meager 15% share in the market in 2012, the global seasonings and spices market exhibits a highly fragmented vendor landscape. The intensity of rivalry is expected to remain medium to high in the industry, thereby providing little scope for the entry of new players. While this ascertains moderate competition in the market, it leads to marginal threat of new entrants, which could have adverse impact as well.
Currently, companies such as Ajinomoto and Nestle boasting large scale operations enjoy stronghold in the market. Besides this, the market also encompasses myriad regional players paving their way towards sustainable growth. The situation will keep the level of competition medium over the forthcoming years and will restrict the entry of new players, which could hamper the market’s expansion goals in the long run.
Nevertheless, absence of brand image and low switching cost eases the bottlenecks for the entry of new players. The market being price-sensitive and not brand-sensitive, it creates enough opportunities for the entry of new players in the market.
Q: What are the key strategies that leading players focus on to expand their footprint?
A: the leading players are acquiring prominent regional players or entering into strategic collaborations to expand their footprint in the global seasonings and spices market For instance, recently in September 2016, B&G Foods Inc., announced partnering with ACH Food Companies Inc., a leading supplier of seasonings and spices. Besides this, the companies are exploring opportunities across North American and European countries such as the U.S., Germany, France, and the U.K., where the spices and seasonings market is yet to pick up.
The seasonings and spices market in countries such as India and China is already well established. Hence to strengthen their footprint, companies operating in the market are focusing on product differentiation. They are also investing in innovative promotional strategies to gain traction.
Such strategies adopted by leading players are bound to have strong impact on the global seasonings and spices market, thus influencing its trajectory between 2013 and 2019.