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Key Dynamics of Dressing and Sauces Market

Drivers

Increasing Investment in the Food Processing Sector

Investment in the food processing sector has grown tremendously since the 1980s, leading to increased competition in the global market. Developing nations have become desirable investment locations due to their diverse assets. The agribusiness sector, which accounts for 30% of GDP, has continuously grown despite economic crises, indicating a rising need for food processing technologies. In Brazil alone, the food and beverage sector generate annual revenue of US$ 170 billion, or 9.5% of GDP, with 45,000 businesses, 86% of which are small and medium-sized enterprises.

Development in Food Packaging and Supply Chain Technologies

Food packaging plays a critical role in the contemporary food sector, with new packaging technologies being developed to meet industrial and consumer demands. Smart packaging is a creative packaging method that integrates technology into packaging to provide users with more convenience, security, and information. Smart labels, NFC chips, or QR codes printed on food packaging can be read with a smartphone to provide additional product information. Additionally, businesses are adopting cutting-edge technologies like advanced analytics, machine learning, and artificial intelligence to turn their supply chains into epicenters of innovation that boost productivity by enabling real-time route adjustments to speed up product delivery.

Restraint

Increasing Price of Raw Material

The cost of condiments has recently started growing in 2021. Many businesses have raised product pricing to relieve the strain of performance growth, which has been influenced by variables including cost pressures brought on by growing raw material prices. Businesses like Haitian Flavor and Kewpie raised the cost of their primary goods, including mayonnaise, home-use dressings, and tartar sauce, after receiving the shipment.

The profitability of publicly traded condiment companies decreased in the first three quarters of 2021, according to data from the China Condiment Association.

Major mayonnaise and sauce producers have informed retail chains that, as of April 2021, their sales prices have increased by an average of 10%. The cost of oil, packaging, and fuel will continue to rise, which will be the cause. Some players are waiting for things to calm down after the imposition of oil export levies.

Furthermore, the raw ingredients needed to create glass are not in short supply in this nation, according to Scott Defife, president of the Glass Packaging Institute, but 20 to 30 percent of the food and beverage bottles used in the U.S. are normally imported from Europe or Asia. Several of those bottles are running into the same supply chain snags that have held up goods like memory chips and seasonal toys.

Restraint

Increasing Price of Raw Material

The rising cost of raw materials is a significant restraint on the condiment industry, with many businesses being forced to raise their product pricing. This trend is due to various factors such as cost pressures brought on by growing raw material prices, among others. Haitian Flavor and Kewpie are among the businesses that have raised the cost of their primary goods, including mayonnaise, home-use dressings, and tartar sauce, after receiving the shipment. The profitability of publicly traded condiment companies has decreased in the first three quarters of 2021, according to data from the China Condiment Association. 

Major mayonnaise and sauce producers have informed retail chains that their sales prices have increased by an average of 10% as of April 2021, and the cost of oil, packaging, and fuel will continue to rise. Some players are waiting for things to calm down after the imposition of oil export levies. Additionally, supply chain snags have held up goods like memory chips and seasonal toys, which also affect the supply of food and beverage bottles used in the United States.

Trend

Rising Popularity of International Cuisines

The rising popularity of international cuisines is a significant trend in the food industry, which is impacting the condiment sector. Diners appreciate a wide variety of flavours and cuisine from all around the world, and they are not required to only eat meals from their own culture. Today, spicy Indian food is enjoyed by Japanese diners while Italian pasta is enjoyed by Indians. Asian cuisines make up around 50% of the revenues of the biggest restaurant chains operating in the United States, according to a Washington Post report. The demand for condiments and dressings is increasing as Asian food becomes more and more popular in the United States and Europe. Latin American cuisine has also made a significant impact on American restaurant culture through its dishes and cooking methods. Major U.S. cities are well-represented by South American cuisine from countries like Venezuela, Brazil, and Argentina, but the distinctive tastes of Peru's mountainous nation haven't yet achieved the same degree of appeal.

Market Segmentation

Sauce Type Analysis:

Soy Sauce: The Highest Market Share in 2022

Soy sauce holds the highest market share in 2022 due to its taste and aroma compounds, as well as certain bioactive components that provide various biological functions. Studies have shown that soy sauce has anticarcinogenic, antimicrobial, antioxidative, and antiplatelet activities, and can inhibit an angiotensin I-converting enzyme. Therefore, soy sauce is considered to be not only a traditional seasoning but also a functional food.

Salad Dressing: Expected to Grow at the Highest CAGR

Salad dressing is expected to grow at the highest compound annual growth rate (CAGR) due to consumers' increased interest in salads and salad dressings. Creamy vinaigrette and other salad dressings are popular because they can add a touch of indulgence to a salad. Moreover, consumers' increased prioritization of healthy eating is driving demand for low-fat, low-sugar, or low-salt meals and ingredients, including oils, mayonnaise, and salad dressings.

Application Analysis:

Pizza: The Highest Market Share in 2022

The usage of sauces in pizza holds the highest market share in 2022, as pizza has always been a universally favorite snack. A healthy pizza sauce is typically made from tomatoes, which are rich in antioxidants like lycopene. Having enough lycopene can reduce blood pressure, minimize cholesterol, and even help prevent cancer.

Salads: Anticipated to Grow at the Fastest Growth Rate

The salad segment is anticipated to grow at the fastest growth rate as people become more aware of healthy diets. Vitamins and carotenoids are enriched sources in salads, and vitamins play vital roles in health and body metabolism, along with their interaction with minerals required in the diet. Moreover, the desire for low-fat, low-sugar, or low-salt meals and ingredients is increasing, making salads a popular choice.

Distribution Channel Analysis:

Offline Segment: The Highest Share in 2022

The offline segment held the highest share in 2022 as people generally purchase sauces and dressings along with their household groceries and items. However, the online distribution channel is expected to expand at the highest growth rate. The expansion of online food delivery portals will continue to boost demand for sauces and dressings globally, as consumers have busy lifestyles, and the availability of varieties of sauces and dressings in online stores boost the online distribution channel.

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End User Analysis:

Commercial Segment: The Highest Share in the Global Dressing and Sauces Market

The commercial segment holds the highest share in the global dressing and sauces market and is estimated to maintain its dominance over the forecast period. Due to urbanization and busier lifestyles, people have less free time to prepare every part of their meals themselves. Thus, hotels, restaurants, cafes, and quick-service restaurants (QSRs) use dressings and sauces more than residential use. With the surge in tour and travel and enthusiasm for food exploration, the HoReCa industry is expected to see a surge in demand for quality food with limited waiting time. Furthermore, growing dining-out and cafe trends require sauces and dressing, increasing the commercial uses over the forecast period.

Geographical Analysis

The Asia Pacific region continues to dominate the sauces market, accounting for the highest share in 2022 and is expected to maintain its leadership position over the forecast period. The region is witnessing a surge in demand for unique flavors, healthier options, and increased convenience, which is driving the growth of the sauces sector. The Asian foods market is becoming more specialized and region-specific, inspiring the Canadian restaurant industry to explore new flavors and dishes. Sweet-and-sour and red curry are among the top five varieties of sauces on menus, while chili oil, sriracha, and curry are three of the fastest-growing sauces. 

However, with diners becoming increasingly familiar with classic Asian ingredients, operators will need to get more creative with the types of Asian flavors they choose to highlight in their dishes. The increasing consumption of condiments, sauces, and dressings, coupled with the growing popularity of traditional foods and the launch of new products by major manufacturers, is expected to further boost the growth of the sauces, dressings, and condiments market in the Asia Pacific region during the forecast period.

Top Players in Dressing and Sauces Market 

Kraft Heinz Company, McCormick & Company, Inc., Nestle SA, Cargill Agrícola S/A, among others are some of the major players in the global Dressing and Sauces market.

In 2022, the top 4 players held around 16% share of the global Dressing and Sauces market. Therefore, the Dressing and Sauces market is observed to Perfect Competition and is projected to shift towards Monopolistic Competition nature in the forecast period. However, it is expected that the Dressing and Sauces market might witness changes in future with the entrance of new manufacturers and growing market share of existing players. 

However, the major manufacturers are taking possible steps to retain their supremacy in the Dressing and Sauces market by deploying growth strategies. Major firms are increasing their regional reach by acquiring local and small brands.

List of Key Companies Profiled:

• Arcor SAIC
• Cargill Agrícola S/A
• Daesang Corporation
• Empresas Polar CA
• Industrias Iberia CA
• Kraft Heinz Company
• Nestle SA
• Quala SA
• Unilever Group
• Yoki Alimentos SA
• Campbell Soup Company
• Dr. Oetker
• Masan Consumer Corporation
• KEWPIEUSA
• McCormick & Company, Inc
• Mizkan America, Inc
• Other Prominent Players

Key Developments:

• In May 2022, HEINZ partnered with Pulpex to develop a recyclable container made entirely from responsibly-sourced wood pulp for its ketchup line. This collaboration supports HEINZ's sustainable packaging goals, including making all packaging recyclable, reusable, or compostable worldwide by 2025, and achieving net-zero greenhouse gas emissions by 2050.
• In July 2022, HEINZ launched the HEINZ 57 Collection, a series of premium sauces and spreads inspired by the cooking skills of award-winning chefs Joe Frillman and Lee Wolen. The collection aims to make cooking trends more accessible and encourages food enthusiasts to experiment with new flavors from around the world.

Segmental Overview

By Sauce Type

• Salads Dressings
  • Mayonnaise
    • Egg Mayonnaise
    • Eggless Mayonnaise
• Oil-based Dressings
  • Fresh Cream-based Dressings
  • Natural Yoghurt Dressings
• Tomato Sauce
• Soy Sauce
• Hot Sauce
• Proprietary Sauces

By Application

• Salads
• Soups
• Pizza
• Burgers & Sandwiches
• Other Foods

By Distribution Channel

• Online
• Offline
  • Supermarkets/Hypermarkets
  • Departmental Stores
  • Specialty Stores

By End User

• Residential
• Commercial
  • Hotels
  • Restaurants & Cafes
  • QSRs
  • Others

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • The U.K.
  • Germany
  • France
  • Italy
  • Spain
  • Poland
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia & New Zealand
  • ASEAN
  • Rest of Asia Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Middle East & Africa
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of Middle East & Africa