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The global spices and seasonings market size was USD 17.12 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with spices and seasonings observing a slightly negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 3.14% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 17.75 billion in 2021 to USD 24.23 billion in 2028 at a CAGR of 4.55% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
These are certain ingredients that are used to provide aroma, flavor, preservation, and color to food and beverage products. These spices are derived from various parts of a plant, such as flowers, barks, fruits, buds, seeds, leaves, roots, or the plant tops. Spices are widely used as seasonings that help in enhancing the taste of food. There are various types of spices used in food and beverages, including healthy raw materials, such as turmeric and pepper. The demand for such healthy spices around the globe indicates the growth trajectory of the market.
The market is primarily driven by a few factors, such as the rising popularity of ethnic cuisines. It is driving the demand for spice blends and new spices. Spices are often used by the vegan masses as meat substitutes. They often mimic the taste of meat. It is creating several opportunities for the spices and seasonings market growth. Also, the increasing demand for turmeric, which is sold as Curcuma in developed regions such as Europe, would aid the growth of the market.
Supply Chain Disruption and Imposition of Trade Barriers amidst COVID-19 to Dampen Growth
The year 2020 has hit the industry hard as the COVID-19 pandemic outbreak drastically changed the trade dynamics. The imposition of lockdown and trade barriers hampered the supply chain flow of spices and seasonings. Various developing countries, such as India, Bangladesh, and China, which are among the major producers of spices, were severely affected, causing raw material shortages in the industry. Preventive measures implemented by governments led to labor shortages and migration of the workforce.
Various key government offices in the trade support structure were understaffed that resulted in delayed government approvals and completion of physical documentation, thus posing problems. According to the Spices Board of India, prices of key commodities, such as turmeric and cardamom, fell in between the range of 8%-56% in 2020. This was due to the bulk of investors or stockists keeping their inventories low due to uncertainties triggered by the pandemic.
However, the spice industry gearing up to curb the post-COVID challenges is expected to open opportunities for the sector to regain its normal pace. Spice and seasoning industries are moving towards the implementation of automation and streamlining focus on the rigorous implementation of HACCP and Food Safety Management Systems for ensuring maximum food safety and addressing labor issues. Digitization will help to install mobile apps for interactions with various contract farmers without any physical intervention for guidance. Such factors are anticipated to contribute to boosting the performance of the market in the upcoming years post-pandemic.
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Growing Utilization of Herbs and Spices in Medicinal Products is a Vital Trend
Herbal and spice extracts have been utilized in traditional medicines since time immemorial. According to the World Health Organization (WHO), nearly 80% of the global population depends on traditional medicines for their primary healthcare requirements. An ample amount of research has proven the benefits of spices & herbs and their medicinal and therapeutic abilities to cure several chronic conditions. According to the National Center for Biotechnology Information (NCBI), 2018, nearly 54% of the U.S. population consumes one or more spices on a daily basis to promote good health and wellness. Consumers across the world are viewing spices not only as a flavoring agent but also as the ingredients that may protect them against chronic, acute, and non-communicable diseases. Thus, these factors are expected to contribute to augmenting the spices and seasonings industry growth in the upcoming years.
Rising Demand for Organic Spices to Drive Market Growth
The global organic spices market is estimated to be valued between USD 0.7-1 billion, thereby exhibiting a growth rate between 5-7% CAGR. Currently, Vietnam, India, and China are the key exporters of organic spices. Most of the organic spice commodities are made by utilizing various spices, such as chilies, garlic, and ginger.
Furthermore, the increasing popularity of organic spices among consumers in Europe (because these products are free from pesticides and have completely natural ingredients) is set to drive the demand. Most of the European food processors use organic spices for the sole purpose of product differentiation. Moreover, awareness of the medicinal properties of spices among consumers is also a factor that would influence the demand for organic spices and herbs.
High Demand for Chili Combinations to Support the Growth of Market
In developed and developing regions, new types of chili flavors and combinations are becoming popular. Change in consumer taste preference is a major reason driving the growth of this market. Chili, a type of spice, is majorly produced in the APAC region and exported to various European countries and the U.S.
The imports of dried chili to Europe have increased by 7% over the last five years, annually. The imports of chili from developing countries, such as India, Vietnam, and China, increased from 33,000 tonnes in 2014 to 44,000 tonnes in 2019.
The frequency in the consumption of hot and spicy food is increasing; however, the heat levels remain moderate. Consumers are incorporating various chili combinations in their food, such as sweet chili, honey chili, and others. Various ethnic cuisines also contain the combinations of numerous spices and herbs, along with the addition of chili and pepper.
Adulteration of Spices May Obstruct Market Growth
Spices and herbs are considered among the top five most commonly adulterated food types as they are expensive commodities that undergo various processes before being sold. People tend to buy loose spices from local stores in case of branded and packaged spice shortages. This leads to their increased exposure to adulterated spices that can cause various serious and fatal damages to health, such as food poisoning. Ground spices are at times adulterated with artificial colors, chalk powder, starch, and others which are difficult to identify by visual and sensory inputs.
According to the Journal of Sustainable Development Research, 2019, various manufacturers intentionally add brick dust, dust from the outer layer of rice, and papaya seeds in various mixed spices to make them cheaper and increase their net weight. For instance, in the U.S., in 2014, the adulteration problem was first aroused as tests exposed the presence of undeclared peanut protein in cumin products leading to mass recalls. Thus, such adulteration in spices not only hampers consumers’ health but also negatively impacts the growth of the market.
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Pepper Segment to Dominate Owing to its High Demand from Food Manufacturers
Globally, pepper is a leading type of spice owing to its sharp flavor, which creates a huge demand among food and beverage manufacturers. It is also used to prevent contamination. It is one of the most valued crops among the other types, as there is a huge price fluctuation every year.
Vietnam, India, and the U.S. were the key consumers of pepper in the year 2018, and these countries cumulatively accounted for 41% share of the global market for seasoning and spices. The other countries are Indonesia, Bulgaria, Singapore, China, Germany, Sri Lanka, U.A.E., U.K., and Malaysia, which together hold 33% of the global market share. Besides, the rest of the world holds the final 16% of the global pepper market share in terms of volume.
Snacks and Convenience Food Segment to Lead Followed by Bakery and Confectionery Segment
Snacks and convenience food is the leading application segment in the global market for spices and seasonings, owing to the increased consumption of snack products in various countries. The bakery and confectionery segment, on the other hand, is expected to hold the second-largest market share throughout the forecast period. This is likely to occur owing to the exponential growth of the bakery segment in developing regions, such as Asia Pacific. The usage of such ingredients in this segment would also help the market to grow at a moderate CAGR.
North America Spices and Seasonings Market Size, 2020 (USD Billion)
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In North America, the market for spices and seasonings is expected to show promising growth, registering a value of USD 7.33 billion in 2020. Countries such as the U.S. and Canada are witnessing considerable growth in the foodservice industry with a rising inclination of consumers towards Asian cuisines, such as Indian, Chinese, and Thai. Other crucial factors, such as an increase in tourism and the surging inclination of millennials towards cross-cultural food trends, have supported the regional market growth.
Along with this, consumers in North America are becoming aware of their health and the benefits of consuming natural herbs and spices, which is also a driving factor. Consumers are willing to explore unique species and are demanding various flavoring around the globe, thereby continuing the trend for authentic cuisines. Further, the increasing presence of ethnic groups, such as Asians, Latinos, Caribbeans, and others, has increased the exposure of consumers to various unique spices, thus fuelling its regional market growth.
The spices and seasonings market in Europe is witnessing a unique trend of the consumption of organic spices. The organic trend is expected to create various opportunities in the market. Europe is an import-oriented region for these food products, in which its imports grew by 4.3% annually from 2014-2018. The major spices that are imported are pepper, capsicums, and ginger. The imports of these spices in this region are expected to witness moderate growth in terms of CAGR, owing to the maturation of the industrial sector. There are certain drivers which would aid in opening various growth opportunities for the European market, such as increased awareness and popularity of spices in the region, improved food innovation in the region, and enhancement in the usage of condiments and spices for various culinary purposes.
Asia Pacific is witnessing significant growth in the sector, as the food processing industry is considered to be a major driving factor in the region. The population dynamics and the spicy food tradition are certain factors that aid in the exponential growth of this region. India is one of the largest producers and consumers in the spice market. Almost 80% of the global seasoning and spices production is considered for ‘captive usage’ in the origin country. India exports less than 15-20% of spices of its own production to other countries. In Asia Pacific, Vietnam is a prominent export-oriented country. It is responsible for 50% (approx) of the global pepper trade.
South America is anticipated to exhibit significant demand for spices and herbs, such as nutmeg, cinnamon, and turmeric due to their nutritional benefits. The wide incorporation of spices in various ready-to-eat and drink consumables and convenience foods are also the factors to boost the market performance. The rapid urbanization, increasing disposable incomes, and growing economic stability has surged the demand for processed foods in the region.
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The increasing popularity of Middle Eastern and African cuisines has led to a rise in the demand for various spice blends utilized in cuisines. Moroccan, Lebanese, and other cuisines use a range of spices, such as ginger, pepper, nutmeg, and others. Further, the utilization of spices in traditional medicines has supported growth of the market.
Key Players Focus on Building New Manufacturing Facilities to Increase Production Capacity
Private labels operating in the spices and seasonings market, such as McCormick and Ajinomoto, have set up novel standards for aesthetic appeal, quality, flavors, and innovation that have nudged organized players to follow a similar pattern.
Moreover, key players in the U.S. are engaged in starting new manufacturing facilities in developing countries, which will utilize spices from the country of origin to manufacture several products and sell the same. Recently, the U.S. food ingredient manufacturer McCormick introduced its branded spices, seasonings, and herbs in India under the brand name Kohinoor Pvt Ltd.
An Infographic Representation of Spices and Seasonings Market
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The global market research report provides qualitative and quantitative insights into the market for spices and seasonings. It also offers a detailed analysis of the market size and growth rate for all the segments. Various key insights presented in the report are an overview of related markets, competitive landscape, recent industry developments such as mergers & acquisitions, the regulatory scenario in critical countries, and key industry trends.
Value (USD Billion)
Fortune Business Insights says that The global spices and seasonings market size was USD 17.12 billion in 2020 and projected to grow from USD 17.75 billion in 2021 to USD 24.23 billion in 2028 at a CAGR of 4.55% in the 2021-2028 period.
The market will exhibit a CAGR of 4.55% in the forecast period (2021-2028).
Pepper is expected to be the leading type segment in the market.
The increasing demand for various spice blends and spice mixes among consumers in developed countries and regions, such as the U.S. and Europe, is a key driving factor.
McCormick & Company, Kerry Group Plc, Ajinomoto Co., Inc., and Associated British Foods are a few of the top players in the market.
North America held the highest share in the market in 2020.
Based on applications, the snacks and convenience food segment is expected to showcase the fastest growth in the global market.
The rising popularity of meat substitutes, sourcing of sustainable spices, and consumption of organic spices and seasonings in various countries are key trends in the market.
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