Seasoning is an auxiliary food that can increase the color, aroma and taste of dishes, promote appetite and benefit human health. Its main function is to enhance the quality of the dishes to meet the sensory needs of consumers, thereby stimulating the appetite. In a broad sense, seasonings include salty agent, sour agent, sweet agent, fresh agent and pungent agent, etc., like salt, soy sauce, vinegar, monosodium glutamate (MSG), sugar, star anise, fennel, pepper, mustard and so on are of this kind. Seasoning industry is a very important part of China's food industry, is a necessity for consumers to eat three meals a day, and is the soul of Chinese flavor.

China's condiment industry development history

China's condiment industry has gone through the period of planning and control (before the 1990s), industry adjustment (1990s), industry upturn (late 1990s-2003), high-speed development (2004-2014), and began to enter the period of product upgrading after 2014 The product segmentation of functionalization and healthiness creates new demand, and category segmentation becomes an inevitable trend. Soy sauce is subdivided into dark soy sauce, light soy sauce, fresh taste, fresh noodles, soy sauce, and so on, and develops in the direction of light salt, zero-added, organic and other healthy direction; Vinegar category starts late, and starts to subdivided into dumpling vinegar, cold vinegar, crab vinegar, and so on, and at the same time, healthy upgraded to health care vinegar, vinegar beverage, and the product subdividing creates new demand. At present, China's vinegar function segmentation is still in the primary stage, segmentation potential.

China's seasoning production and market size has been growing steadily

According to the statistics of the top 100 enterprises of the China Seasoning Association, China's seasoning production has been growing year by year from 2013 to 2019.In 2019, China's total production of seasoned food reached 14,289,000 tons, which is 1,064,000 tons more than that in 2018, and a year-on-year increase of 8.05%.

According to Euromonitor statistics, the market size of China's condiment industry increased from 85.2 billion yuan in 2014 to 128.2 billion yuan in 2019, with a compound annual growth rate of 8.2%, which caliber includes soy sauce and vinegar, sauces, and consumable oils. Condiments belong to just demand, industry cyclical fluctuations are small; and in recent years, with the increase in population, consumption upgrading, the proportion of eating out rising and other multiple factors, the condiment industry still maintains steady growth.

China's condiment industry competition pattern is more dispersed

2010-2019, China's condiment industry CR4 and CR8 overall showing an upward trend, but the growth rate is slower, during the decade, the CR4 and CR8 only increased by 2.6 percentage points and 4.3 percentage points; and the overall concentration of the industry is lower. Low, it can be seen that the seasoning industry is in a completely competitive market environment.In 2019, the CR4 and CR8 of China's seasoning industry were 18.6% and 25.3%, respectively; among them, the leading company Haitian Taste had a market share of approximately 7.5%, followed by Lee Kum Kee with a market share of approximately 3.8%. Due to the large differences in taste among regions in China, different sub-categories form a separate competitive landscape. National brand companies, foreign brands, and local SMEs each have their own markets.

Revenue of Major Enterprises in China's Seasoning Industry

In the first half of 2020, among the 14 listed seasoning enterprises, there were 10 enterprises with growth in operating revenue, of which 8 enterprises, or 57.14%, achieved double-digit growth in operating revenue. The top five companies in terms of operating income are Haitian Taste, Meihua Bio, Torch High, Yihai International and Fuling Pressing Vegetables, of which Haitian Taste is far ahead of the rest with 11.595 billion yuan of revenue income.

By the impact of the epidemic, four seasoning listed enterprises operating income decline, into the second quarter of 2020, social life gradually returned to normal, seasoning enterprise performance rebound, while seasoning enterprises continue to diversification, health and high-end power, and online consumption or become the new normal, many enterprises focus on the layout of online and offline omni-channel marketing.

Trend analysis of China's seasoning industry

With the intensification of the trend of consumption upgrading, seasonings show a trend toward the development of upscale, mid-range and high-end seasonings market capacity will be further expanded, and the market share of brand-name products will be further increased. At the same time, in the strict regulation of environmental protection, raw material prices and the application of new production processes and other factors, the industry threshold will gradually increase, industry consolidation to speed up the survival of small and medium-sized enterprises is difficult to survive, the overall strength of the leading will stand out.

-- The source of the above data and analysis refers to the China Seasoning Industry Market Demand Forecast and Investment Strategy Planning Analysis Report published by Prospect Industry Research Institute.