1. Growth rate of condiment industry slowed down and gradually recovered in 2016.
Major sub categories of condiment industry in China are sauces and vinegars in which soy sauce is the major product for its important role in family consumption and catering industry and it is a necessity in life with rigid demand. During Jan-Jul, 2016, growth rate of soy sauce output volume was 0.16%, a relatively small figure. There are three product categories of soy sauce industry in China: high-end soy sauce for family consumptions and middle-and-low-end ones for catering consumptions.
2. Recovery of high-end catering promotes upgrade of condiments.
There are three major consumption channels of condiments in China: catering procurement, family consumption and food processing. Food processing mostly purchases bulk gourmet powders; catering procurement and family consumptions principally buy sauces and vinegars.
According to statistics, growth rate of domestic catering markets dramatically fluctuated in 2016, and recovered slowly after the last quarter. Catering revenue in Dec was up by 10.6% YOY, closing the gap with total retail sales of consumer goods (10.9%) to 0.3% and narrowing the fall to 0.6% compared with last year. In 2016, national catering revenue was CNY 3.5799 trillion, up by 10.8% YOY; catering revenue of units above norm was CNY 921.3 billion, up by 6.0% YOY.
3. Increasing living standard of residents stimulates lasting growth of condiments.
Consumption upgrade leads to family consumers’ preferences on condiments with different nutrition and health care effects, which indicates the development trend of products and level refinement in condiment industry.
Disposable income of urban residents per capita sustains its growing trend. (CNY)
Annual Soy Sauce Consumption (Litre per capita)
4. High-end condiments are released in the market constantly to promote consumption upgrade.
Gross profit rate of condiment industry as a whole has grown stably since 2011, up by 7% in the past five years.
Overall Gross Profit Rate of Condiment Industry
Soy sauce is the leading product in China’s condiment industry with the largest annual output volume, presenting huge potential for growth. In recent years, China’s soy sauce output volume has been constantly increasing. It exceeded 10 million tons in 2016 according to CRI market research.
Overall, the demand for gourmet powder keeps stable. According to CRI market research, from 2011 to 2016, the annual demand remained over 2 million tons in China’s gourmet powder industry.