Sauces, spreads, seasonings and oils in Europe 2021

Sauces, spreads, seasonings and oils in Europe 2021

Regions in the Spotlight 12-23 April 2021

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Contents Sauces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Spreads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Seasonings and cooking sauces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Oils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Key Takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The condiments aisle has emerged as a surprisingly innovative area over the past few years, following decades of stagnation. The sector has been dominated by global brands, with only a handful accounting for nearly all available shelf space.1,2 For precisely this reason, it is a challenging area for new brands as they struggle to find room next to the big players; however, startups have started to change that, while also forcing larger brands to rethink their portfolios.3

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Sauces The leading brands in mainstays like ketchup and mayonnaise – Heinz and Hellmann’s respectively – have branched out as smaller brands have put their dominance to the test.4 Hellmann’s launched a range of luxury mayonnaise variants as well as a vegan mayonnaise in 2018, and Nielsen named the vegan product the most successful NPD in the category, responsible for nearly a third (32%) of all new product sales in sauces that year.5 Heinz then launched a range of gourmet ketchups the following year, responding to growing demand for premium sauces.6 Globally, sales of table sauces, dressings and condiments have been hard hit by restaurant and foodservice closures during COVID-19, while retail sales have increased.7 In Western Europe, the market is saturated, according to Euromonitor International, but opportunities remain in premiumisation, particularly for products with added health benefits.8 While the biggest brands have expanded their offerings, a growing number of newer players is tapping into this opportunity. UK brand In the Buff, for instance, launched its plant-based Sweet Paprika Protein Ketchup in 2018, then aimed to answer demand for international flavours a year later with Turmeric Fusion and Chipotle Spice variants.9

Source: In the Buff10

As in many sectors, vegan offerings have become increasingly important over the past few years, and a growing number of new product launches in sauces, dressings and condiments contain no eggs or dairy.11

Sauces, spreads, seasonings and oils in Europe 2021 | 3

Spreads Functional ingredients have gained in importance in response to COVID-19, and spreads are no exception, as Mintel identified ‘boosting nutritional profile’ as a dominant theme for innovation in the category during 2020.12 It is further suggested that companies could leverage the inherent nutritional value of existing ingredients in spreads, such as nuts or cocoa, or add ingredients associated with health and immunity, such as turmeric, ginger or other plant ingredients.13 The trend responds to consumer demand for added nutritional value. A recent report from the Hartman Group found almost a third (29%) of adults said they consumed more functional foods and beverages in 2020.14 Other trends in spreads include giving consumers “an intense or memorable sensory experience,” Mintel said.15 Examples include a sweet spread with the texture of popcorn and innovations with spicy ingredients.

Darna Delikatesser - Vegan Hummus with Chili, Denmark Source: Mintel GNPD16

Darna Delikatesser Vegansk Hummus med Chili (Vegan Hummus with Chili) is described as a hummus with added salsa and chili, said to be spicy, fresh and colourful with notes of garlic, bell pepper, herbs and tahini. It can be used on a classic tapas plate with sausages, garlic olives and baked tomatoes, and it is also suitable for BBQ meals, meat and vegan dishes. The product is free from lactose and gluten, and retails in a 175g pack bearing the Green Keyhole logo.16

Mojo Cacao - Chocolate Nut Butter with Popcorn, Russia Source: Mintel GNPD17

Mojo Cacao Shokoladno-Orekhovaya Pasta Popkorn (Chocolate Nut Butter with Popcorn) is now available. The product is crafted in Moscow, features a 100% plant-based formula, and contains whole ingredients, healthy fats, fibre and protein. It is said to be ideal for toasts, yogurts, smoothies or granola, is free from refined sugar, gluten, soy lecithin, dairy and emulsifiers, and retails in a 200g pack.17

Palm oil has been a sensitive ingredient in spreads for several years, as many consumers associate it with deforestation and habitat loss.18 In the 12 months to May 2020, 6% of new spread launches made a palm oil-free claim, and some companies have moved from using certified sustainable palm oil to cutting out palm oil altogether.19

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The margarine market has become a difficult segment for some of the biggest manufacturers, leading companies like Unilever to divest their margarine portfolio following declining revenues.20 Market analysts have cited changing attitudes to fat – and butter in particular – as butter sales have risen in parallel.21 At the same time, interest in vegan alternatives to butter has helped buoy up the margarine sector, and some manufacturers have signalled their intention to reposition margarine as vegan or plant-based butter. 22

Seasonings and cooking sauces Seasonings and cooking sauces have emerged as a way for consumers to personalise simple ingredients, giving them an easy way to experience interesting or exotic flavours. Among the themes identified by Mintel are: • Simplicity and naturalness • Healthy, diet-friendly recipes and ingredients • Tapping into restaurant trends 23 Especially during COVID-19, consumers are looking to recreate restaurant quality food at home with authentic, gourmet flavours, and seasonings and sauces provide a way to achieve this even for less proficient home cooks. Meal kit services already have tapped into this trend, and a few have collaborated with restaurants to provide an experience that is as close as possible to dining out at home.24 Cultural diversity in Europe also makes it an interesting market for sauces and seasonings with different herbs and spices, according to Euromonitor International.25 It says that the combination of flourishing ethnic cuisines and the increasing popularity of home cooking has encouraged manufacturers to expand their cooking sauce product ranges to meet demand for ethnic flavours such as Mexican and North African.26 In addition, European consumers continue to be interested in natural and organic ingredients for sauces and seasonings, bringing opportunities for manufacturers who remove ingredients like additives and preservatives. Most recently, the fastest growth has been in all-natural and organic claims27.

Sauces, spreads, seasonings and oils in Europe 2021 | 5

Oils Increased interest in healthy fats and oils has expanded offerings in the oils segment far beyond commodity crop oils like rapeseed, sunflower, corn and soybean, and the value of the European oils market is predicted to reach $38 billion by 2022.28 Olive oil has grown in popularity for years, and consumption is showing stable growth of 3-5% over the next five years due to increased interest in healthy eating and the Mediterranean diet.29 However, sales are at their most dynamic for oils that are sold at much lower volumes. Among those on the rise are oils prized for their flavour rather than only for use in cooking, such as avocado oil, walnut oil and sesame oil, and coconut oil has gained attention for its medium chain triglyceride (MCT) content, which many consumers seek out for its purported health properties.30 More recently, European consumers have become aware of the health benefits of other oils and are experimenting with those from hemp, almonds, rice and flax; although, the market for such products remains relatively small.31, 32 According to Mintel producers should more overtly flag up the respective health benefits, which suggests that omega-3s or antioxidant content could be leveraged as a selling point.33 In addition, ethical and environmental claims related to oils have increased across the board, referring to elements such as eco-friendly packaging, sustainable production, and human and animal welfare.34

Ethical and enviromental claims increase their share of launches in Europe Europe: selected ethical and environmental claims, as a % of total launches in butter, margarine & other blends and oils, ● Sept 2015 - Aug 2016 vs ● Sept 2019 - Aug 2020 15% 12

% of launches

11

10%

9 7

7 6

6

5%

4 2

2

2 1

0% Environmentally friendly package

Recycling

Environmentally friendly product

Ethical - sustainable (habitat/resourses)

Ethical - human

Source: Mintel GNPD35

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Ethical - animal

Key takeaways • The market for table sauces is saturated but there are still opportunities for premium products.

• Vegan and plant-based claims are growing for sauces, spreads and seasonings.

• Consumer interest in spreads with functional ingredients increased in 2020.

• Restaurant-style and ethnic meals are a target for seasonings and cooking sauces.

• Natural and organic claims are on the rise in seasonings.

• Consumers are interested in a broad variety of healthy oils for both cooking and flavouring.

• Manufacturers should consider citing oils’ specific health properties on-pack.

• New products feature significantly more ethical and environmental claims compared with five years ago.

The information provided here was compiled with due care and up to date to the best of our knowledge on publication.

Sources 1

https://agr.gc.ca/eng/international-trade/market-intelligence/ reports/customized-report-service-barbecue-sauces-and-spicesmarket-in-the-united-states-and-europe/?id=1552078020527&wbdi sable=true 2 https://qz.com/emails/quartz-obsession/1084956/ 3 https://agr.gc.ca/eng/international-trade/market-intelligence/ reports/customized-report-service-barbecue-sauces-and-spicesmarket-in-the-united-states-and-europe/?id=1552078020527&wbdi sable=true 4 https://www.thegrocer.co.uk/category-reports/a-starring-role-sauces-and-condiments-category-report-2019/597263.article 5 https://www.thegrocer.co.uk/category-reports/a-starring-role-sauces-and-condiments-category-report-2019/597263.article 6 https://www.heinz.co.uk/sauces/tomato-ketchup/product/100185200035/roasted-garlic-ketchup 7 https://www.euromonitor.com/sauces-dressings-and-condiments 8 https://www.euromonitor.com/sauces-dressings-and-condimentsin-western-europe/report 9 https://www.foodnavigator.com/Article/2018/09/12/Protein-ketchup-creators-on-shaking-up-a-consolidated-category-Functionalingredients-play-a-crucial-part 10 https://www.facebook.com/inthebuffsauce/photos/1233190096841132 11 https://www.euromonitor.com/the-world-market-for-sauces-dressings-and-condiments/report 12 Mintel, A year of innovation in sweet & savoury spreads, 2020 13 Mintel, A year of innovation in sweet & savoury spreads, 2020 14 https://www.smartbrief.com/original/2020/08/role-functional-foodand-beverage-era-covid-19 15 Mintel, A year of innovation in sweet & savoury spreads, 2020 16 https://www.gnpd.com/sinatra/recordpage/7964535/from_ search/G9cla1ihJd/?page=1

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https://www.gnpd.com/sinatra/recordpage/7497887/ https://wwf.panda.org/discover/our_focus/food_practice/sustainable_production/palm_oil/ 19 Mintel, A year of innovation in sweet & savoury spreads, 2020 20 https://www.unilever.com/news/press-releases/2017/unilever-tosell-its-spreads-business-to-KKR-for-6.825-euro-bn.html 21 https://www.statista.com/statistics/415230/butter-per-capita-consumption-europe-eu/ 22 https://www.wsj.com/articles/margarine-gets-a-vegan-butterrebrand-11570013954 23 Mintel, A year of innovation in cooking sauces & seasonings, 2020 24 https://thingtesting.com/stories/dive-byo-restaurant 25 https://www.euromonitor.com/sauces-dressings-and-condimentsin-western-europe/report 26 https://www.euromonitor.com/sauces-dressings-and-condimentsin-western-europe/report 27 Mintel, A year of innovation in cooking sauces and seasonings, 2020 28 https://www.prnewswire.com/news-releases/europe-edible-oilsmarket-to-cross-us38-billion-by-2022---rapeseed-oils-occupied-thelargest-share-in-europe---research-and-markets-300404284.html 29 https://www.cbi.eu/market-information/processed-fruit-vegetables-edible-nuts/olive-oil/market-potential 30 https://www.hsph.harvard.edu/nutritionsource/food-features/ coconut-oil/ 31 https://www.cbi.eu/sites/default/files/market-information/productfactsheet-almond-oil-germany-vegetable-oils-oilseeds-2014.pdf 32 https://www.cbi.eu/market-information/grains-pulses-oilseeds/ linseeds/europe 33 Mintel, A year of innovation in butter, spreads and oils, 2020 34 Mintel, A year of innovation in butter, spreads and oils, 2020 35 Mintel, A year of innovation in butter, spreads and oils, 2020 18

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