The spice and herb market is an assortment of a few high-level spice distributors and many medium to low level producers. Although growers are faced with many challenges, the overall market has shown great promise over recent years.
It is important that growers and role players in the distribution and supply chain remain vigilant about what is happening in the market. As every entrepreneur or farmer knows, knowledge is the way to manage and plan for your farming endeavours.
After all, it is an investment and any investment should be nursed with great care and consideration. Remaining aware of the market value of commodities such as spices and herbs is important because it helps the producer better understand the market. It helps producers to accurately price the product because there is a deeper understanding of what the product is worth. Growing herbs, for instance, results in a product that is far more valuable than only the input costs like seed, fertiliser, labour, and electricity for irrigation.
The market value of a spice is determined by the demand for it, and the quantities that can be produced profitably to meet these demands. With the market of herbs and spices still growing in Africa, South America, and Australia, there are still many opportunities awaiting producers and role players to improve their offering and grow the market.
There are many drivers for this growth in this market:
- There is a growing demand for unique aromatic foods from consumers who enjoy experimenting with food flavours
- More and more outlets cater for customer desires
- Renewed interests in global ethnic foods
- Innovative market strategies have exposed more people to different spices and herbs
- Theory that suggests incorporating foods with medicinal properties into your diet can benefit consumers
The expansion of these market drivers also leads to growth of food processing industries. Over the next ten years (2023 to 2033), the projected compound annual growth rate (CAGR) is 3,6%. To put it into monetary terms, it means the USD 171 billion market is expected to increase to USD 243 billion. Between 2018 and 2022, it was calculated that the sales of herbs and spices grew by 3%. Researchers also saw a shift in the fragmented market to more uniformity across the board, which can lead to in greater yields and more ethical business. Key market role players will need to strengthen their distribution channels and expand their product portfolio. With this, the opportunity for competitive pricing and a higher production capacity will also increase.
Consumers want the convenience of experimenting with international cuisine locally, as well as developing new fusion flavours. Marketers have the opportunity to expand their consumer base by leveraging this curiosity. It can also introduce them to alternative uses for spices beyond the culinary options.
Spices colour the plates and palates of many curious eaters all over the world. (Source Vecteezy)
Market specific growth according to uses for herbs and spices
The herbal tea market currently has a CAGR of 7,1% over the next decade, growing from USD 3 967,70 million, to USD 7 868,39 million. Trends that expedite this growth are health and wellness awareness. The herb and spice extracts market has a CAGR of 5%. In 2023, the current market value is USD 15,23 billion, but it is estimated to grow to USD 24,80 billion over the next decade. Trends that contribute to this is the rising awareness of therapeutic effects of extracts.
The global seasonings market reached USD 37,35 billion in 2022, and it is also estimated to grow by 6,5% in the coming years.
Herbs and spices market (2022) Future Market Insights. Available at: https://www.futuremarketinsights.com/reports/herbs-and-spicesmarket
Herbs, Spices and Seasonings (Seasonings, Dressings and Sauces) Market in South Africa – Outlook to 2024; Market Size, Growth and Forecast Analytics (updated with COVID-19 Impact) (2021) Market Research. Available at: https://www. marketresearch.com/GlobalDatav3648/Herbs-Spices-Seasonings-Dressings-Sauces-14426973/
Seasoning and spices markets growth, trends, and forecast (2023 – 2028) (2021) Growth Trends. Available at: https://www.mordorintelligence.com/industry-reports/seasoning-and-spices-market#:~:text=The%20global%20spices%20and%20seasonings,product%20circulation%20in%20the%20market