Manufacture of Spices in South Africa 2023

Introduction

About 90% of South Africa’s spices are imported, mainly from India, China, Pakistan, Turkey, and Nigeria.

Demand for spices and seasonings increased during the pandemic as sales of some spices linked to health benefits, such as ginger, turmeric, and garlic, increased. Spices are used extensively in the food industry, and demand is increasing globally due to the increasing preference for more flavourful and healthy foods. In the seasonings, dressings, and sauces segment, private labels are growing faster than brands, mainly due to financially-constrained consumers trading down.

Opportunities

Demand for spices as more consumers cook at home.

Growth in export markets. Private label brand growth. Spice farming offers export opportunities.

Outlook

Although the outlook for the spice and condiment sector remains positive, economic pressures, the electricity crisis and escalating operating costs will continue to exert pressure on profit margins of manufacturers and retailers.

An industry player expected food prices to continue to rise as input costs of fertiliser and fuel increase due to Russia’s invasion of Ukraine. These and factors such as port challenges will keep up significant pressure on manufacturers, and any further increases in raw materials, or imported ingredients or products are likely to be passed on to the consumer. More frequent cooking at home will increase demand for affordable cooking ingredients and result in intensified competition between brands and private label. Tiger Brands said the outlook is challenging and required focus on cost reduction, value engineering, brand and product tiering and efficient supply chain management.

Report Coverage

This report on the spice industry, including seasonings, condiments and sauces, contains information on the state of the industry, trade, significant influencing factors, notable players and developments.

There are profiles of 36 companies including major players such as Tiger Brands, RCL Foods, Pioneer Foods and Libstar, and other notable players such as Ina Paarman’s Kitchen, Spice Mecca, Exotic Spices, Peppadew International, Osman’s Spice Works, Ukuva iAfrica Foods and Spice Emporium.

Strengths

Demand for products is ongoing.

Low barriers for small businesses to enter. Support from major retailers. The spice and condiment industry is growing. Well established role players including growers, processors, importers and exporters.

Threats

Increasing costs due to loadshedding, especially for small producers.

Rampant power outages. Rising cost of utilities. Russia-Ukraine war’s impact on fuel price and global supply chain.

Weaknesses

Lack of disposable income affects spending. Shortage of skills. The industry is exposed to external macroeconomic factors.