The spice market - Spain

1.2 World market

The global spice market is expected to grow by *.*% annually until ****, reaching a market size of US$*.* billion. This growth is explained by consumers' search for new flavors and authenticity.

spice sales growth World, ****-****, billions of dollars Source: ****

The pepper segment accounted for **% of this market's revenue in ****. However, other spices are more dynamic such as turmeric, whose sales should soar by +*.*% each year over the period.

1.3 Spanish market

The INE data combine the turnover of the spices market with that of sauces and other condiments of NACE code ****. This is therefore a high estimate of the size of the spice manufacturing market.

evolution of spices turnover Spain, ****-****, million euros Source: ****

1.4 Foreign trade

Data on world trade in spices with the notable exception of pepper are collected on the UN Comtrade website under HS code ****: "Ginger, saffron, turmeric, turmeric, thyme, berries, curry and other spices."

Spanish spice exports generated $*** million in ****. The main buyers are Western countries, such as the United States (***).

Destination of spice exports Spain, ****, % Source: ****

Imports of spices are lower, amounting to $** million in ****. A large part comes from Eastern countries, such as Iran (***).

Origin of spice imports Spain, ****, % Source: ****

It should be noted that the volume of trade grew strongly since ****: imports have increased by +**.*% in * years and exports by +**.*%.

Trade balance in the spices market Spain, ****-****, in millions of dollars Source: ****

1.5 Effects of Covid-19

As a consequence of the Covid-** pandemic, the eating habits of Spaniards changed. Much of out-of-home consumption has shifted to home consumption, giving a boost to essential products for the family kitchen. This is especially true in the spices, herbs and other seasonings segment, which experienced a one-year value increase of between +**% and +**%, depending on the source.

Growth of the spices and seasonings segment under Covid-** effect according to sources Spain, ****, % Source: ****

Given that exports are a considerable source of revenue for Spanish spice production, it is worth adding that it grew by +*.**% between **** and ****, in the midst of the pandemic. In addition, new eating habits are expected to favor the development of ready meals, whose revenues increased by +*, *% in the **** financial year. Spices are a central component of these meals, which emphasize flavor.

2.1 Internal consumption

Domestic consumption of condiments and spices was *,*** tons or *** million euros. This represents a deceleration of -*.*% in volume and -*.*% in value compared to ****. It should be noted that Spanish households spend an average of *.**% of their food and beverage budget on spices.

Source: ****

As mentioned above, Spaniards are consuming more and more at home, which is encouraging the development of products for the kitchen. By ****, * out of ** Spaniards will eat at home almost every day.

Overview of eating habits in the home Spain, ****, % Source: ****

In a deteriorating economic context in which the question of purchasing power has become central, food expenditure is the adjustment variable in household budgets, particularly for the less well-off. Food price inflation could push Spaniards to redirect their purchases towards basic products, which would penalize the development of the spice market. Especially since Spain is the European country where prices have risen the most, with a +**.*% growth in the price of the average basic basket between **** and ****, compared to +**.*% in the other Eurozone countries.

Consumer price increases as a percentage Europe, ****-****, in % Source: ****

2.2 Use of spices in industry

The use of spices is not limited to the restaurant and food sectors. In fact, spices are used on a large scale in Spain:

By the food industry, especially industrial chocolate makers (***); By the cosmetics industry, especially during the industrial production process of perfumes and other care products; By private individuals directly or by various craftsmen (***).

*.*.* Agri-food industry

In ****, the agri-food market in Spain was worth *** billion euros. It incorporates a large amount of spices and derived products in its industrial processes. However, the contribution of the different segments of the sector is highly differentiated, as can be seen in the following graph.

Share of agri-food industry turnover by sector Spain, ****, % Source: ****

The cosmetics market in Spain is estimated at €*.* billion in ****. The cosmetics industry is also a consumer sector of spices, in particular cinnamon, cloves, pepper and vanilla. Indeed, spices are an essential component in the manufacture of cosmetic products, particularly for their pigments. Beauty and care products and hygiene products account for the largest share of sales in France, with **% and **% of the sector's turnover, respectively.

Sales of cosmetic products by category Spain, ****, % Source: ****

3.1 Corporate structure

The spice industry in Spain is highly fragmented. There are only ** companies with a turnover of more than two million euros per year. Competition is fierce and investments are difficult to make. The industry leader produces **,*** tons of spices, with sales of ** million euros.

Production and sales of the main spice producers Spain, ****, thousands of tons and millions of euros Source: ****

Private labels monopolize the market. They account for **% of sales volume and capture **% of value. in comparison, the leading own brand accounts for only *% of sales volume and **% of value.

Estimated market capture by private label brands Spain, ****, % Source: ****

The main companies in the spices segment are presented below. The revenues shown refer only to those generated by the sale of spices, with the exception of Sabater which, however, is highly specialized in this field.

Top companies in the spices and seasonings sector by revenue Spain, ****, millions of euros Source: ****

3.2 Employment and business

In ****, the number of companies for NACE code **** was ***, compared to *** in ****, a decrease of -**%.

evolution of the number of companies in the spices and seasonings market Spain, ****-****, units Source: ****

On the other hand, gross operating surplus (***) increased by +*.*% in the period, reaching €*** million in ****.

eBITDA evolution of the production of spices and seasonings Spain, ****-****, in % Source: ****

Finally, the number of people employed also increased by *%. In ****, **** people were employed in the spices, sauces and condiments industries.

evolution of the number of employees in the spices and condiments sector Spain, ****-****, units Source: ****

3.3 Protected designations of origin

In Spain, four spices have Protected Designation of Origin (***), registered in the official EU register. The cochineal from the Canary Islands is the most recent, hence the lack of information.

Source: ****

3.4 Phases of production

Broadly speaking, the production and marketing of spices involves four different stages: cultivation, processing, blending and branding:

Cultivation of spices: the cultivation of spices can be complicated due to the specificities of each spice produced. In fact, depending on the type of spice, techniques and climatic requirements may vary. Processing: The traditional processing of most spices is drying. Once dried, spices can last longer and better retain their flavor characteristics. The shelf life of a dried spice can vary, but traditionally ranges from ** to ** months. Blending: Spice blending is an interesting step, as many herbs are marketed directly as a blend. Creation of a brand name under which the herbs will be marketed both in specialty stores and supermarkets.

4.1 Production by product type

The supply of Spanish spices is very varied. It is dominated by paprika and pepper, which represent *** and *** tons respectively. saffron , with **.* tons produced, is more discreet, but generates a high turnover (***).

Spice supply by volume and value produced Spain, ****, tons and millions of euros Source: ****

4.2 Average consumer prices

Below are the prices applied by Todo Especias online store. The prices per gram decrease significantly with the quantity ordered. It is also interesting for the consumer to buy the products in bulk.

Source: ****

4.3 World price volatility

Vanilla is considered the most expensive spice in the world, second only to saffron. In fact, a kilo of vanilla costs an average of *** euros, far behind saffron which can be worth tens of thousands of euros, but far ahead of other spices such as cumin, pepper and others whose price per kilo is usually less than *** euros.

The world's most expensive spices World, ****, in €/kg Source: ****

The price of spices is characterized by high volatility. This is because spice prices are not regulated by a central institution or an international exchange. Most spice markets are characterized by a chronic imbalance ; they are small producers in the South and large buyers in the more developed countries and intermediate traders. They then adjust prices and stocks according to the economic context and the vagaries of the weather, which can allow them to sell for three times what they bought.

Pepper, for example, saw its prices plummet due to the massive influx of production from Vietnam. As for vanilla, following a climatic (***) crisis, prices soared from *** per kilo in **** to *** euros.

Today, the same dynamics is observed in vanilla prices, in recent years its price grew exponentially. In fact between **** and ****, the price ...

5.1 Regulatory framework for the production of food flavors and spices

Flavorings are subject to regulatory harmonization at European level under Regulation EC/****/****. Regulation (***) No ****/**** lays down the conditions of use of flavourings. This regulation also specifies the prohibited flavors and substances, the maximum doses that may be used for certain flavors, as well as the labeling rules applicable at European level[***]. The labeling of foodstuffs is subject to the regulations on the labeling of foodstuffs delivered to the final consumer, and is regulated at Community level by Directive ****/**.

Another obligation, which concerns flavors among other food ingredients, is the indication of allergens for flavors derived from allergenic ingredients or simply for flavors in allergenic carriers. This is the purpose of Directive ****/**, which provides for the declaration of allergenic ingredients among those included in the list of allergenic ingredients of this directive.

6.1 Agent segmentation

• Jesús Navarro SA
• Ramón Sabater SA
• Conservas Dani
• Manufacturas Ceylan
• McCormick