OPINIO
Trade4go
Oct 29th, 2024
Original content
Host: Mzingaye Ndubiwa - Global Market Analyst (South Africa)
Speakers: Avelyn (Sun Jae) Lee - Associate - HQ
Alper Akkurt - Global Supply Chain Manager - (Türkiye)
Bojan Mijatovic - Global Market Analyst (Serbia)
Agenda:
In its October webinar, Tridge experts covered major market trends in the sauces and dressings markets, emphasizing flavor trends, regional opportunities, and challenges. Inflation and rising restaurant costs have spurred demand for sauces and dressings, making home-cooked meals more affordable and appetizing. Many consumers are seeking economical ways to duplicate restaurant-quality dishes at home, sparking an increase in desire for adaptable, quick-fix choices. Tridge experts presented several examples of successful strategies in the retail sector, with sustainability, health and wellness, and flavor innovations being the most significant factors setting the tone for global markets.
The global sauce and dressing market is thriving, marked by a dynamic and highly competitive environment where significant brands are pushing boundaries with bold and innovative flavors to match the evolving preferences of today’s consumers. Companies like Tabasco and Heinz are introducing products highlighting popular regional and spicy flavors as more people seek unique and complex tastes. Mexican-inspired hot sauces, like Tabasco Salsa Picante and new hybrids like Heinz’s Franklin Sauce—a fusion of 14 different sauces—reflect the growing demand for excitement and creativity in condiments. These products appeal to adventurous consumers and cater to the increasing desire for ready-to-use, convenient flavor solutions in everyday cooking.
On the trade side, import and export values of sauces and condiments under the HS Code 210390 have been soaring since 2019. Overall import value of the United States (US), United Kingdom (UK), Canada, France, and Germany increased by 29.6% in 2023, while export value for China, the US, Italy, Germany, and Thailand grew more substantially by 34.3% in the observed period.
Figure 1: Top 5 Importers and Exporters of Sauces (HS Code 210390)
Source: Tridge
Inflation and the rising cost of dining out have further fueled demand for sauces and dressings that make home-cooked meals more accessible and flavorful. Many home cooks are seeking affordable ways to recreate restaurant-quality dishes at home, spurring a surge in interest for versatile, quick-fix options like Frank’s Red Hot Dill Pickle Hot Sauce and Dionysus Sweet Chili Sauce, which come in low-calorie and low-sugar formulations. Health-conscious consumers are driving trends toward low-sodium and low-sugar alternatives, while a rising focus on sustainability is reshaping packaging choices as brands aim to reduce their environmental footprint in response to consumer concern over climate change.
Figure 2: Top Sauces and Condiments Sold in Major e-Commerce Platforms
Source: Tridge Retail Intelligence Report
Today’s consumers are also seeking healthier, plant-based condiment options that align with their wellness goals. Plant-based condiments like Bitchin’ Sauce’s Chipotle Sauce, made with almonds, and Duke’s Plant-Based Mayo are gaining traction among vegan and health-conscious consumers looking for alternatives that meet dietary preferences without sacrificing taste. These trends demonstrate that the sauce and dressing market is continuously adapting, offering diverse options that cater to a broad spectrum of dietary, environmental, and flavor preferences.
Shifting consumer behavior toward more home-cooked meals has intensified as inflation and the rising costs of dining out drive people to seek affordable alternatives. The United States (US) Bureau of Labor Statistics shows grocery prices rising by 1.1% compared to a 4.1% increase in restaurant meal prices in Aug-24, which has steered more consumers toward cooking at home. This shift has sparked a growing demand for a diverse range of sauces that can elevate home-cooked dishes to restaurant quality, catering to the desire for quick, convenient flavor solutions without breaking the bank.
In response, established sauce brands and new market entrants have expanded their product lines to meet this demand. Korean companies Dongwon Home Food and Vivid Kitchen have been intensifying production and launching new flavors to capture the expanding market. Non-sauce brands like Paldo and Dionysus are entering the sauce market with unique low-calorie, low-sugar, and plant-based offerings. Paldo is known for its flavorful instant noodles and authentic Korean taste, while Dionysus specializes in premium Mediterranean products, including high-quality olive oils and wines, emphasizing quality and craftsmanship.
This focus on health and variety has led diet-relatable brands to experience a 170% annual sales growth since 2020, showing consumer preference for products that support diet management without compromising taste.
Focusing on the future, companies also embrace sustainable packaging, adapting to consumer expectations of eco-friendly choices. For example, in partnership with sustainable packaging leader Pulpex, Heinz has developed a recyclable, renewable ketchup bottle made from wood pulp, aiming for a fully sustainable packaging solution by 2025. This innovation aligns with broader trends in the sauce and dressing market, evolving dynamically to meet the needs of increasingly health-conscious and environmentally aware consumers.
Figure 3. Kraft Heinz Sustainable Packaging
Source: Heinz
Bojan Mijatovic opened the panel discussion by discussing how global flavor trends are shaping the sauces and dressings markets and pointing out the most innovative regions. According to Mijatovic, countries like Japan and South Korea are leading in incorporating global trends into their sauces and dressings. The Asia-Pacific region is leading in unique ingredients like miso, gochujang, and yuzu.
Alper Akkurt confirmed that the Asia-Pacific region is pushing the boundaries of innovation, with Japan and South Korea exploring fermented sauces. For instance, Japan is transforming traditional staples like soy sauce and miso into new forms, incorporating them into fusion sauces, and introducing variations with bold flavors, low sodium, and even plant-based ingredients to appeal to health-conscious and vegan consumers. South Korea is similarly expanding its offerings, with sauces like gochujang (a fermented chili paste) being transformed into various products, including marinades, glazes, and dips catering to both local and international palates.
Akkurt emphasized that the sauces and dressings market is experiencing a shift towards regional flavors that maintain their cultural roots while being adapted for global palates. Culinary curiosity, digital media, and global travel drive this. Asian sauces (gochujang, hoisin and sambal sauces), Mediterranean (tzatziki, muhammara), and Middle Eastern (tahini, Hharissa) sauces, and health-conscious innovation are becoming mainstream in Western markets.
North America and Europe are leading the charge for clean-label, organic, and low-sodium sauces, focusing on natural ingredients and aligning with modern dietary trends. Fusion flavors, such as Heinz's "MayoChup," influence the global sauce landscape by expanding consumer palates, combining mayonnaise and ketchup in a convenient way.
In terms of demand for more health-friendly alternatives, European consumers are actively seeking out products perceived as healthier. For example, a Proveg International survey indicates that 54% of European consumers are purchasing plant-based sauces and dressings, highlighting a clear shift towards health-oriented dietary choices. In conclusion, health-conscious consumers and regional culinary preferences influence global flavor trends in sauces and dressings.
In discussing the key challenges companies face when adopting global sauces and dressings products for the regional market, Akkurt continued the panel discussion stating that companies must balance core flavors with local consumer preferences, such as spicy and bold flavors in Southeast Asia and Latin America and milder or tangier options in Northern Europe or the Middle East. Another issue is the regulatory differences, such as food safety standards and ingredient restrictions, which pose additional challenges.
Brands must invest in research and development to create region-specific formulations that comply with these standards. Pricing strategies must be tailored to each area, ensuring consistency and competitiveness. Akkurt also added that companies can leverage data-driven insights and local partnerships, such as Tridge's platform, to overcome these challenges. Mijatovic concurred with Akkurt's statements and added that sourcing ingredients locally could help maintain competitive pricing. He also mentioned the Tabasco case as an example of regulatory challenges, noting that it faced high import tariffs in Southeast Asia but later adapted by offering smaller bottle sizes at lower prices.
Finally, in the key trends expected to shape the future of the sauces and dressings market globally, Mijatovic stated that the food industry is experiencing a surge in demand for sustainable ingredients, with brands focusing on ethical sourcing and transparency in supply chains. Consumers are increasingly aware of environmental impacts and are seeking transparent supply chains.
Customization and personalization are also rising, with digital platforms and food technology allowing for personalized sauces and dressings. Plant-based products are also growing, with a growing trend towards botanical flavors. Akkurt confirmed that sustainability is the main point in the forecast of global sauce and dressings markets, adding personalization, health, and global flavor fusion trends.
Examples provided include companies like Sir Kensington's leading the charge by using Fair Trade-certified sugar and promoting regenerative agriculture. Health and wellness will continue to dominate, with consumers seeking functional ingredients in everyday food products. According to Akkurt, exotic and regional flavors will continue to shape the market, with complex spice blends like North African harissa or Ethiopian berbere emerging.
Click here to view the webinar recording, or click here to see the presentation slides.
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