Sauces and Condiments Industry Size
The global sauces and condiments industry was valued at 106.1 billion USD in 2015. In the next five years, it grew at a compound annual growth rate (CAGR) of 3.78% per year to reach 123.06 billion USD. Until 2025, it will grow at a 3.36% CAGR and reach 149.83 billion USD.
In 2019, ketchup and tomato sauces accounted for 16% of the total value, while all other sauces – 84% of the total.
Sauces and Condiments Industry Trends
Fueled by growing consumer interest, the global sauces and condiments industry will continue its positive growth over the coming years.
Due to urbanization and busier lifestyles, people have less free time to prepare every part of their meals themselves. Thus, consumers opt to use sauces and condiments as a simple way to add more flavor to their meals.
Consumers prefer sauces and condiments that provide convenience but become more enticed if a product can offer functional health benefits.
People use bought sauces and condiments with a variety of dishes. Yet, the desire for fast and healthy sauces has prompted demand for natural and regional sauces, dressings, and condiments.
Consumers are also more interested to know how what they purchase is made and its origin. As the importance of provenance and transparency continues to grow, companies begin to communicate relevant information on product labels.
Health and Wellness
Consumers actively seek out products that have fewer calories and contain less or no sugar and gluten. To accommodate shifts in consumer preferences, sauce brands focus on the health benefits of the spices they use in their sauces, condiments, and dressings.
Studies on the antioxidant and anticarcinogenic properties of spices have shown probiotic effects on intestinal microorganisms. Those that see extensive use in the production of sauces and condiments include:
- Black cumin seeds;
- Turmeric;
- Ginger;
- Cinnamon;
- Garlic (or cloves);
- And others.
Consumers also desire sauces and condiments without artificial additives. As a result, companies reformulate their recipes to replace or exclude some ingredients.
Thus, manufacturers create better products, which are free from preservatives, excess salt, gluten, sugar, dairy, allergens, and others. To replace them, companies often use:
- Rosemary;
- Basil;
- Chilli;
- Ginger;
- Oregano;
- Paprika;
- Parsley;
- And others.
For instance, Unilever uses various spices and herbs to reformulate their recipes and reduce salt content. However, this creates a challenge to maintain the taste and organoleptic properties of the final product.
For example, monosodium glutamate is considered unhealthy by many consumers worldwide. Thus, they actively avoid it when buying sauces and condiments. Instead, some companies opt to use compound condiments such as stock cubes and soy sauce.
Other companies have decided to exclude high-fructose corn syrup from their formulations. To replace it, they use sucrose in the form of cane sugar or brown sugar. For instance, Best Foods Inc. launched ketchup that is sweetened with honey.
Clean Label Sauces
As more consumers actively look for healthy products with no additives or artificial preservatives, clean labeling will become crucial for companies to thrive.
Health and wellness, along with clean labeling, synergize together. Both trends will continue to fuel each other's popularity among consumers as people educate themselves more about the ingredients in sauces, condiments, and dressings.
Thus, consumer attitudes are likely to be more favorable to companies that provide clean labels. Brands can also benefit from labels that clearly convey product benefits along with substantiated claims.
Furthermore, due to the high perceived value of clean label sauces and condiments, consumers are more inclined to pay a premium price.
Functional Sauces and Condiments
Demand for functional sauces will be a strong driver for the growth of the sauces and condiments industry. That is mainly due to the improved nutritional profile of products enhanced by functional ingredients.
Research on soy sauce found that it contains bioactive components. It also has various biological functions, including anticarcinogenic, antimicrobial, antioxidative, and antiplatelet properties.
Therefore, soy sauce is not only a traditional seasoning but also functional food. As a result, innovative brands can take advantage of the fact and develop new, enriched variants of sauces and condiments.
These findings, coupled with product innovation, have the potential to redefine the whole category and give it a widespread image of being a functional food.
Foodservice Also Accommodates Sauce Trends
Influenced by these changes, the foodservice sector is more inclined to differentiate its menus with sauces, condiments, and dressings that feature foreign flavors.
Some common sweet ingredients include mango, brown sugar, and maple, which balance savory dishes with great success. Also, wasabi, miso, rosemary, sea salt, and bacon are used to add an accent to sweet dishes.
Another popular ingredient for both foodservice and producers that wish to diversify is chili peppers. They are often combined with fruits in various sauces, condiments, and dressings. For instance, barbeque sauces that feature pineapple and habanero are especially popular.
Spice Industry Positively Affected
Due to the underlying shift in perceptions about food, demand for organic spices has substantially increased. That is especially valid for commodities like chili, ginger, and garlic. Industry experts estimate the size of the global organic spices market to account for 5-7% of the total market, more than 750 million USD. Regionally, India, China, and Vietnam are among the leading exporters of organic spices.
Product Innovation
As the sauces and condiments industry further matures, differentiation becomes key to success. The globalization of the sauces, condiments, and dressings industry puts the spotlight on new flavors.
Demand for lighter meals has also grown in recent years. Salads receive more attention because they are gluten-free, sugar-free, and associated with a healthy diet. As such, the increased salad consumption leads to the growth of salad dressings in both retail and food service.
Moreover, consumers actively seek out offerings that provide bold combinations of the five tastes — sweet, sour, salty, bitter, and umami. Thus, more adventurous products that cater to these demands are likely to receive growing attention in the coming years.
Avocado Oil
Avocado oil is one of the ingredients with the fastest growth. Brands add it to pesto, aioli, mayonnaise, dressings, hot sauces, spreads, dips, and many more. Avocado oil is vegan, good for the heart, and free of sugar and gluten.
It also accommodates the requirements of diets like Paleo and Keto. Both restaurants and CPG companies use the ingredient. However, it tends to be more expensive than other ingredients, is unsustainable, and attracts violent gangs in producing areas. Thus, the costs associated may not be viable for all organizations.
Unusual Sauces and Condiments
While healthy and functional foods become a more important purchasing decision, younger consumers are eager to experience products with new and intriguing tastes. They are also the leading consumer group that fuels the increasing demand for more exotic and ethnic flavors.
Furthermore, younger consumers are more prone to use condiments and sauces in more unconventional ways. For example, they combine tzatziki with french fries or soy sauce with chili.
Alcohol in Sauces, Condiments, and Dressings
A well-received trend is the use of alcohol in a variety of sauces. The addition of wine, beer, and spirits in sauces and condiments infuses them with a whole new flavor. Bloody Mary cocktail sauce, margarita guacamole, and bourbon BBQ chicken pizza are merely a fraction of new products on the market.
Among the innovative tastes that have been introduced in recent years, sweet and savory sauce combinations continue to be the most widely accepted.
International Flavors
Spurred by these shifts in consumer preferences, sauce companies offer a variety of products with exotic ingredients and ethnic flavors. Often, they represent Middle Eastern and South-East Asian cuisines.
As consumers become more enamored by foreign cultures, demand for ethnic spice blends will continue to grow. Middle Eastern spices, particularly sumac, are expected to see stable growth in the medium term.
In the past, sauce ingredients were mostly regionally sourced. Now, companies place efforts to procure them from various regions around the globe. Thus, they actively expand their product portfolios and, in some cases, completely change their products.
Sriracha-infused ketchup and blue cheese-flavored mustards are just some of the products that add a twist to old sauces. Albeit seemingly minor, these innovations satisfy consumer appetites for ethnic flavors from foreign cultures.
Due to the growing demand for international flavors, sriracha is widely accepted by consumers, even poised to become a household name. Similarly, Tunisian harissa, South Korean gochujang, and Argentinian chimichurri are other emerging condiments.
Further, the word regional is more frequently seen on labels and in marketing messaging. As such, companies opt to offer classic products with a regional twist. By merely adding ingredients that are characteristic of a particular region, brands can create an entirely new product.
Sauces and Condiments Trends Forecast
In the coming years, product innovations will drive the sauces, condiments, and dressings industry’s growth. Consumers will continue to demand both tastier and healthier sauces. Thus, to be more competitive, sauce companies need to respond with more innovative products.
Health and wellness are among the main trends to be considered when it comes to successful innovation and new product development. Further, product innovation is an important means of driving margins, especially when products become more commoditized.
Higher margins can protect companies against volatility in commodity prices. So, the majority of the leading companies are heavily investing in new product development, which further intensifies the competition in the industry.
Changes in the industry force both suppliers and producers to streamline their business models or heavily innovate. Thus, the sauces and condiments industry experiences growing investment in R&D.
Because the sauces industry is traditionally low-margin, sustainability and efficiency will become crucial for sauce brands to survive and thrive in the landscape of the future.
Finally, sustainability and environmental protection will affect the development of the sauces and condiments industry. Many companies around the globe already invest in sustainable products and processes. Often, they return the investment through process optimization or increased margins. However, not all companies see a return on their investments.
