Globalization
and changing demographics have been the key drivers of the global
seasonings and spices market. The rising globalization has attracted
consumers from around the world towards ethnic cuisines. While this
considerably fuelled the use of ethnic seasonings and spices in
western food it also construes the robust expansion of the market
worldwide. For instance, despite its smaller size compared to the
other countries in Europe, the U.K. accounts for approximately 30% of
the annual turmeric imports in the European Union, connoting the
popularity of Indian cuisines in the country.
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Furthermore,
Indian and Chinese cuisines hold top slots in the takeaway food
category of the U.K., surpassing other European foods, including
Italian. According to Transparency Market Research (TMR), a curry
restaurant in the U.K. serves over 2.5 million customers weekly, of
whom majority are from the U.K.
As
per TMR, the global seasonings and spices market is poised to expand
at a CAGR of 4.8% between 2013 and 2019, to reach US$16.6 bn by the
end of 2019. The market was valued at US$12.7 bn in 2012.
Q:
How does the fragmented nature of the global seasonings and spices
market effect its trajectory?
A:
With the top six companies holding a meager 15% share in the market
in 2012, the global seasonings and spices market exhibits a highly
fragmented vendor landscape. The intensity of rivalry is expected to
remain medium to high in the industry, thereby providing little scope
for the entry of new players. While this ascertains moderate
competition in the market, it leads to marginal threat of new
entrants, which could have adverse impact as well.
Currently,
companies such as Ajinomoto and Nestle boasting large scale
operations enjoy stronghold in the market. Besides this, the market
also encompasses myriad regional players paving their way towards
sustainable growth. The situation will keep the level of competition
medium over the forthcoming years and will restrict the entry of new
players, which could hamper the market’s expansion goals in the
long run.
Nevertheless,
absence of brand image and low switching cost eases the bottlenecks
for the entry of new players. The market being price-sensitive and
not brand-sensitive, it creates enough opportunities for the entry of
new players in the market.
Q:
What are the key strategies that leading players focus on to expand
their footprint?
A:
the leading players are acquiring prominent regional players or
entering into strategic collaborations to expand their footprint in
the global
seasonings and spices market For instance, recently in September
2016, B&G Foods Inc., announced partnering with ACH Food
Companies Inc., a leading supplier of seasonings and spices. Besides
this, the companies are exploring opportunities across North American
and European countries such as the U.S., Germany, France, and the
U.K., where the spices and seasonings market is yet to pick up.
The
seasonings and spices market in countries such as India and China is
already well established. Hence to strengthen their footprint,
companies operating in the market are focusing on product
differentiation. They are also investing in innovative promotional
strategies to gain traction.
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