Sauces, Dressings, and Condiments Market Overview
The sauces, dressings, and condiments market reached $115.3 billion in 2017, and is expected to advance at a CAGR of 3.8% during the forecast period. Launch of innovative and new flavors, introduction of low-fat substitutes, rise in use of natural and organic ingredients, and consumer willingness to try international cuisines are some of the factors driving the market of sauces, dressings, and condiments, globally.
GLOBAL SAUCES, DRESSINGS, AND CONDIMENTS MARKET, BY TYPE, $M (2013-2023)
On the basis of type, the sauces, dressings, and condiments market has been categorized into tables sauces, cooking ingredients, dips, pickled products, pastes and purees, and others. Of these, table sauces was the largest category, contributing more than 30% revenue in the market in 2017. Of the various table sauces, mayonnaise and tomato sauce enjoy the highest patronage by consumers, as they are used as instant accompaniments with fast food and snacks.
Cooking ingredients was the second largest category in the sauces, dressings, and condiments market, contributing more than 30% revenue in 2017. The preference for home-cooked meals among consumers is driving the demand for cooking ingredients, globally. Also, millennials are turning to home-based cooking due to growing interest in healthy eating and as a measure of cost saving, thus giving impetus to the demand of the category.
Globally, Asia-Pacific (APAC) was the largest market in 2017.The young generation in region is increasingly experimenting with international cuisines such as Chinese and Mexican. As the preparation of these cuisines relies on extensive use of various sauces, dressings, and condiments, the sales of these products are increasing in the region.
Of all countries, Japan led the APAC sauces, dressings, and condiments market in terms of size, with a contribution of nearly 40% in 2017. This can majorly be ascribed to the substantial use of sauces in the traditional cuisine of the country, such as soy sauce and teriyaki sauce. However, during the forecast period, the APAC market is expected to observe the fastest growth in India, attributed to the growing inclination of people in the country toward fast food.
Sauces, Dressings, and Condiments Market Dynamics
One of the major trends shaping the sauces, dressings, and condiments market is the increasing demand for gluten-free and organic sauces. People are increasingly becoming health-conscious and therefore, avoid consuming food that adversely affects their health. Driven by a health-focused approach, people are also adopting a gluten-free diet and avoiding consumption of artificial additives and genetically modified organisms (GMOs). Sauce and snack companies whose sauce variants initially had gluten in them are launching gluten-free variants in the market. For example, Del Monte’s canned tomato sauce, tomato sauce with basil, and no-salt-added tomato sauce are gluten-free variants, with gluten content below 20 parts per million.
Growing popularity of international cuisines, rising disposable income, and busy lifestyle of people are some of the major factors positively impacting the growth of the sauces, dressings, and condiments market, globally.
The sauces, dressings, and condiments market is being majorly powered by the growing popularity of international cuisines among consumers across the world. The growing cross-cultural interaction and awareness is leading to a substantial increase in the demand for international cuisines, which in turn is resulting in the growing use of sauces, dressings, and condiments.
One of the major factors restraining the growth of the sauces, dressings, and condiments market is increasing raw material costs. Vendors in the market are facing challenges because of continuous fluctuations in raw material prices. In addition, any hike in the transportation cost affects the shipping cost of raw materials, which not only increases the manufacturing cost but also reduces the profit margin for vendors. Besides, constant pressure to remain competitive in the market compels the vendors to use low-cost substitutes of raw materials, which often leads to decreased product quality.
Governments of some countries have started providing subsidies on import of sauces, which can be viewed as an area of opportunity for the players operating in the sauces, dressings, and condiments market. For example, under the Korea-Australia Free Trade Agreement (KAFTA), tariff on both tomato ketchup and prepared mustard (used in mustard sauce preparation) was reduced from 4.5% in 2016 to 3.4% in 2017, and shall be eliminated by 2020. Tariff on tomato sauce was also reduced from 36% in 2016 to 33% in 2017 and is expected to be eliminated by the end of 2018. These tariff-cuts are providing favorable business opportunities to Australian exporters to enter the South Korean market.
Sauces, Dressings, and Condiments Market - Competitive Landscape
There is a moderate number of regional and international players operating in this market, which makes the intensity of rivalry moderate. Some of the key players in the sauces, dressings, and condiments market are Nestle SA, Kikkoman Corporation, Tas Gourmet Sauce Co., McCormick & Company Incorporated, Unilever Group, The Kraft Heinz Company, General Mills Inc., Bolton Group, Conagra Brands Inc., and Del Monte Foods Inc.
As part of business strategy, major market players are focusing on acquisitions to increase their revenue share in the coming years. For instance, in August 2017, McCormick & Company Incorporated acquired Reckitt Benckiser’s food division from Reckitt Benckiser Group PLC for $4.2 billion, to strengthen its position in the condiments and hot sauce categories. The acquired brands, including Frank’s RedHot sauce, French’s mustard, and Cattlemen’s BBQ sauce, will be integrated in the consumer and industrial segments of the company.