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Trends of Chinese condiment industry

Condiments seem to be an unnoticeable industry in people's eyes. However, it has a market share of more than CNY 10 billion annually, and the market share gradually enlarges. From the monosodium glutamate, chicken powder, soy sauce, vinegar and pickles, the segment products are increasingly large and the competition in the market becomes increasing tense.

In recent years, Chinese condiment industry sharply develops, which always keeps at the increase rate of over 20% in the market. At present, the total output of Chinese condiments exceeds 15 million tons, becoming the new economic increase spot of food industry. With the development of near ten years, condiment industry presents the five following trends:

Firstly, condiment industry enters the rapid development period. During 2001 and 2010, the sales of condiment industry sharply increased from CNY 27.723 billion to CNY 151.622 billion, becoming one of the sub-industries with the quickest increase speed of food industry. In recent years, the powerful increase momentum of Chinese catering industry stimulates the demand for condiments. Currently, the proportion of condiments used during the cooking is the largest. With the acceleration of the progress of consumption upgrading, the demand for table condiments will dramatically increase.

Secondly, the purchasing power of condiments strengthens, and the products tend to be medium and high-end. In 2011, Chinese GDP per capita was over USD 4000 for the first time. According to the international convention, it means that residents of China enter a living period of the high quality. Food is the paramount necessity of people in China, and the food consists of dining food and condiments for the use of kitchens in the family. The condiments have the high-end development trend. Moreover, the market capacity of medium and high-end condiments further expands.

Thirdly, the diversification and specialization development trends of condiments become obvious. Besides the common condiments, such as the traditional soy sauce, vinegar and so on, the market demand for sauce, complex condiments, and so forth are constantly on the rise. The specialization development trend of condiment products also emerges. In early domestic China, the soy sauce is only called as soy sauce. However, starting form Guangzhou and Hong Kong, it is divided into the dark soy sauce and light soy sauce. Furthermore, some functional soy sauces, for example, soy sauces for steamed fish, teriyaki sauces, etc. emerge. So are sauces and flavoring materials. In addition, the soup bases contained in instant noodles are ones targeting at a certain functions and specific dishes. The improvement of brand consciousness of customers also makes the division of work in the industry be more professional.

Fourthly, the development of catering industry directly drives the rapid development of condiment market. Because the current major sale channel of condiments is the catering, there are similarities in products required by catering industry with family products, while they are not completely the same, and different in channel operations.

Finally, the centers of sale channels are disperse. Currently, condiments are mainly concentrated in the channel of wholesale and circulation, which relies on non-staple wholesale markets of various places. It has the trend of all-channel development, and those are wholesale channel, traditional retail channel, modern retail channel, catering, closed channel, industry channel and so on. Moreover, condiment enterprises develop from selling through distributors into the regular operation by enterprises (supplying catering, commercial supermarkets and factories and so on), and the sales mode and channels have dramatic changes.

There is no doubt that the condiment industry increasingly becomes large, meanwhile, with the join of some domestic famous brands and foreign-funded food giants, the living space of small and medium-sized enterprises are squeezed. To find the living space in the competition, small and medium-sized condiment enterprises must know the development trend and follow the way of characteristic product sales.

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by S. C.
15 june 2012, World News > Asia