Consumers will eat out at restaurants more often, spurring growth
Los Angeles, CA (PRWEB) December 16, 2013
The Seasoning, Sauce and Condiment Production industry benefited from increased demand for its products over the past five years. Even during the recession, when consumers had less disposable income, industry revenue grew as consumers purchased more spices and sauces from grocery stores to prepare meals at home. Therefore, grocery wholesalers and retailers demanded more seasonings, sauces and condiments. Demand from food manufacturers, which use industry goods as inputs for their final products, also increased as Americans turned to more convenient packaged and frozen meals that are quick and easy to eat. Combined, these trends are expected to boost industry revenue an annualized 1.7% to $18.3 billion over the five years to 2013, including an anticipated growth of 2.4% in 2013.
Following the recession, disposable incomes gradually recovered, allowing consumers to dine out at restaurants again. According to IBISWorld Industry Analyst Hester Jeon, “This shift in consumption caused demand from foodservice establishments to grow while volume sales of industry goods declined at retail channels such as grocery stores.” Higher income levels also allowed consumers to trade up to more expensive branded condiments and organic products at grocery stores. Furthermore, despite a decline in volume sales at retail channels, higher input costs caused producers to raise the prices of their products, which helped boost revenue in 2011. However, a decline in key input costs allowed producers to lower the prices of their goods in the following year, causing industry revenue to decline 2.8%. Many producers further automated their production process to rely less on manual labor. A reduction in wage costs helped the industry become more profitable over the past five years.
The industry's future prospects look positive, with industry revenue anticipated to grow in the next five years. “Higher disposable income levels will drive demand for industry products at the retail level, lifting demand from food manufacturers,” says Jeon. Additionally, consumers are expected to eat out at restaurants more often as consumer spending grows. Furthermore, as more Americans become health conscious, producers will respond by introducing healthier products. The Seasoning, Sauce and Condiment Production industry displays a low level of market share concentration, with the only major player being McCormick & Company.
For more information, visit IBISWorld’s Seasoning, Sauce and Condiment Production in the US industry report page.
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IBISWorld industry Report Key Topics
The Seasoning, Sauce and Condiment Production Industry manufactures products such as mayonnaise, dressings, spices, extracts and dry food mixes from a variety of ingredients. Industry products are then sold to downstream wholesalers, food manufacturers and retail markets. Ketchup and other tomato-based sauces are excluded because they are part of the Canned Fruit and Vegetable Processing industry (IBISWorld report 31142).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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