Consumers are expected to dine out more often as consumer spending grows
New York, NY (PRWEB) November 25, 2014
The Seasoning, Sauce and Condiment Production industry benefited from increased demand for its products over the past five years. Armed with thicker wallets, as represented by a rise in per capita disposable income, some consumers chose to trade up to premium and more expensive brands, sustaining industry growth. According to IBISWorld industry analyst Melissa Imbruglia, “despite the positive effect of higher income levels, higher prices curbed demand for dressings and condiments at retail stores.” Due to higher input costs, manufacturers raised their product prices to maintain earnings. Consequently, many consumers continued to purchase discounted and promoted items at grocery stores or turned to generic brands due to increasing prices, restraining industry growth in the latter half of this period. Overall, IBISWorld expects industry revenue to grow over the five years to 2014.
Other factors that influenced the performance of manufacturers during this period include growing health and nutrition concerns among consumers. Increasing knowledge of the consequences of eating food with high fat and sodium content has caused some consumers to shun fatty and salty condiments and sauces. “Consequently, manufacturers have expanded their product lines by introducing healthier brand extensions to appeal to this growing consumer segment,” says Imbruglia. Additionally, the increasing popularity of ethnic cuisines and flavors has spurred demand for imported goods, intensifying the level of competition that domestic producers face. However, manufacturers benefited from the growing foreign demand for sauces and condiments produced in the United States, as exhibited by growth of exports.
The industry's future prospects look positive, with industry revenue anticipated to grow in the next five years at a slightly faster rate than in the previous period. Higher disposable income levels will drive demand for industry products at the retail level, lifting demand from food manufacturers. Additionally, consumers are expected to dine out at restaurants more often as consumer spending grows, lifting demand from foodservice providers. As a result of these trends, IBISWorld projects revenue to grow an over the five years to 2019. In addition, operators are expected to benefit from slowly rising input costs, which will help boost industry profitability once operators pass down the costs to consumers.
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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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