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Why Spices?
Around six million years ago, the early inhabitants of earth discovered spices. Ever since then, this flavourful finding has continuously evolved and created a unique dominance in the market. Spices are the aromatic, taste-giving parts of plants that are used for multiple purposes. They are primarily popular in the food and culinary industry.
Spice business over the years
With a worldwide demand, spice production has grown over the years and this has brought major success to spice-trading businesses. In fact, many reports have shown that each passing year, the observed profit margins have surpassed the speculated profit margins in the spice trading business. For example, let’s take the Indian spice export market, below.
(Source: Ibef.org)
The graph shows that the Indian Spices have been in consistent demand and therefore, India has yielded a steady business income from the export of its home-grown spices. From USD 2655 million in 2016 to USD 4179 million in 2021, the country’s spice trading has almost doubled in just five years’ time.
While the bar graph above shows India’s spice market business alone, a study on the grandviewresearch.com estimates that the global spice consumption is going to compound in the next eight years. “The global seasoning & spices market size was valued at USD 35.38 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 5.6% from 2022 to 2030” (Source: grandviewresearch.com).
This is a bird’s eye view of a spice-producing country’s trading deals. However, when we magnify this to take a look at the global spices economy, then the numbers look bigger and the pictorial representation is much brighter! See below.
(Source: Grand View Research)
This is particularly because spices have a variety of usages and therefore, are in high demand. Typically, spices are required in the following industries:
- Beauty
The beauty industry is heavily dependent on spices such as turmeric, clove and cinnamon. These are used in creams, lotions, topical skin treatments, lip products, makeup solutions etc.
- Health and Wellness
In areas of medicine, pharmaceutical care and medical treatments, spices have been used regularly. Especially in Ayurveda, all the spices have distinct properties and so, they are used in different combinations to treat ailments. In fact, spice-induced products like toothpastes that promote daily wellness have become widely accepted now.
- Food and Culinary
Probably the most spice-loving industry in the world is the culinary or food industry. The inventions in the kitchen are ever-growing and so, all spices will always find a special place here. Be it western dishes or traditional Middle-Eastern and Asian ones, spices are used in both. It is so because just with a dash of a spice like black pepper on simple bland salad, an eating moment can be elevated to an eating experience.
- Religious and Spiritual
With the coming of yoga, there has been an increased emphasis on leading life with spiritual beliefs. People are heavily investing in building spiritual spaces, which have amplified religious activities and as a result of this, spices like rosemary and basil that are used in rituals are continuously in demand.
Reasons why Spice demand will grow in the coming years
These industries mentioned above are just the main spice-using sectors, there are many other industries that require spices too. These include businesses like textiles, planting and chemical. Apart from this, studies indicate that spices are going to magnanimously grow in demand in the coming times. A few reasons for the same are:
- Natural Remedies Over Synthetic Methods
Allopathic medical treatments are known to have adverse effects on the body and on the other hand, natural remedies bring about slow but positive results. Therefore, as consumers are moving towards healthy choices and are choosing treatments that have a long-term impact, the demand for products that are packed with nature’s goodness is rising. This in turn has hyped the need for spices that are used in the production of these home-made remedies or treatments.
- Demand For Quick Foods
“In the Ready-to-Eat Meals segment, volume is expected to amount to 120.8mkg by 2027” (Source: statista.com) and this is just an expectant number. But as adults and children are slowly moving towards a hustle-filled life, a rise in the demand for ready-to-cook meals and minute-made foods can be predicted. Everyone enjoys a scrumptious meal but not everyone can cook, so these heat-and-eat meal options that use spices to pack the perfect punch of taste in minimal spendings have been family favourites. Therefore, spices are going to stay in great popularity.
- More Productivity And Less Measures
Expanding the idea of the hustle culture, while it has impacted the way people work, it has also changed the way people cook too. Instead of using single spices, consumers are now preferring blended spices. These spices include the benefit of two or more spices in just one packaging, thereby, giving the meal its rightful taste but with less efforts. In fact, the use of blended spices has allowed people living in small spaces to optimise their limited storage in the kitchens.
- Clean Lifestyle Choices
A recent trend that has been increasingly influencing consumers is that of vegetarianism and veganism. “Well, in 2020, plant-based dairy and meat sales were over $29 billion and were projected to increase to $162 billion by 2030. This means that plant-based meat and dairy alternatives are already making up nearly 8% of the so-called global “protein foods” market. And according to the Bloomberg Intelligence Report, plant-based food sales are expected to increase fivefold by 2030” (Source: Foodrevolution.org). More and more people are choosing the vegan lifestyle, which is automatically creating a market for spice-induced clean eating options, which has scaled up spice manufacturing business.
- Migration and Travel
Globalization and increased foreign migration has led the consumers of spices to different corners of the world. Each year, due to factors like higher-education and skilled job opportunities, many people travel to different countries in continents like Australasia, Europe and North America. It is observed that many of these migrants, about 40%, come from Asian families (Source: World Migration Report) and Asians love spices, so there will always be a persistent demand for it wherever they go.
- Intelligent Consumers
It can be claimed that the market for spices will be ever-expanding because consumers are becoming informed. Social media and more so, the internet is helping people gather knowledge that was earlier inaccessible. Buyers are now taking responsibility for the products they are ordering and are becoming conscious about their choices. By this means, many artificial and harmful ingredients-including goods are subtly running out of market. This in turn is paving the way for more natural products and is indirectly adding to the demand for herbs and spices.
Future of Spice Industry
The reasons for spice consumption are going to continuously roll up in number and all spice dealers are bound to make eventual steady profits. This indicates that spice trading is going to be one of the top business choices in the world and when we look at the United Arab Emirates/UAE market specifically, we can predict that spices will always be in demand here. This is because UAE is the biggest Middle-Eastern country and all the delicacies of the region give great weightage to spices. All kinds of food preparations here require spices, whether it is Shawarma, Dolma, Falafel or anything else. Adding to this, UAE has a global business reputation and is a major trading conglomerate as well. It has a population of nearly 11 million, out of which 3.49 million is accounted by Dubai (source: Google). The warm and welcoming culture of the city is famous amongst its inhabitants, 80% of whom come from different parts of the world. This expat index of Dubai denotes that it has a multi-cultural environment that caters to all the consumer needs. In fact, post pandemic it has been predicted that travel is going to hit up a notch and since Dubai International Airport has been the gateway of unity throughout covid-19, more international travellers can be expected in the country. “Global tourism received a significant boost as international tourist arrivals registered a 182 percent increase to an estimated 117 million in the first quarter of 2022 from about 41 million in the year-ago period” (Source: Arab News). This is great for UAE, and if this important revenue period is strategically utilized for international trade agreements then the country can make wondrous profits.
“Due to increasing demand for spices on account of expanding urbanization, during the forecast period of 2019-2025, the spices market will experience growth with a standard compound annual growth rate (CAGR) of 4.80% “ (Source: Industryarc.com). Looking at the market discussion around spice trading, we can easily agree on the fact that spices are going to be in massive demand, especially in the authentic spice consuming countries. A business that decides to invest and grow in the spice production sector can comfortably be ensured about making progressive profits, keeping in mind the projected trends of the consumer market.
(Source: Future Market Insights)
Bibliography:
Agro Exporter in India
Nut and Seed Exporter in India
BSR Overseas LLP
