Seasoning and Dressing Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 750 seasoning and dressing manufacturers in the US produce condiments, sauces, spices, and seasonings that enhance the flavor of food. Major product categories include prepared sauces; dry mix food preparations; spices, flavorings, and food colorings; and salad dressings, mayonnaise, and sandwich spreads. The category does not include ketchup.
Variable Raw Ingredient Costs
Raw ingredients are agricultural products, which are subject to price fluctuations that are dependent on underlying commodity costs and global market conditions.
Plant-Based Foods Growth
Americans are increasingly incorporating plant-based foods into their diets, a change that favors the salad dressing category.
Industry size & Structure
The average seasoning and dressing manufacturer employs about 58 workers and generates over $36 million annually.
- The seasoning and dressing manufacturing industry consists of about 750 firms that employ 43,500 workers and generate over $27 billion annually.
- The industry is concentrated; the top 50 companies account for between 80% and 90% of industry revenue.
- Mayonnaise, dressing, and prepared sauce manufacturers account for 46% of establishments and 48% of total industry revenue, while spice and extract manufacturers account for 54% of establishments and 52% of industry revenue.
- Major companies, which include Kraft/Heinz, Campbell Soup, and McCormick, have a global presence. Large conglomerates like Unilever and Clorox also produce seasonings and dressings. Privately held companies include McIlhenny/Tabasco, Ken’s Foods, and Newman’s Own.
- The US is the world’s largest consumer of spices, both in consumption and imports, according to NPR.
Industry Forecast
Seasoning and Dressing Manufacturers Industry Growth
Recent Developments
Jun 23, 2024 - Producer Prices Rising
- The producer price index for seasoning and dressing manufacturers, which measures prices before reaching consumers, rose 3.3% in April compared to a year ago after climbing 7.4% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Producer prices hit a new high in April despite double-digit declines in sales for food companies in the fourth quarter of 2023 versus Q4 2022. Employment by other miscellaneous food manufacturers, which includes seasoning and dressing manufacturing firms, dipped 0.9% year over year in April, while average industry wages rose to $23.19 per hour in May, a 4.2% year-over-year increase and just shy of their peak in April, BLS data show.
- Another chili pepper shortage threatens the availability of a popular sriracha sauce, The New York Times reported in May. Huy Fong Foods recently canceled all forthcoming shipments of its signature Huy Fong Sriracha to distributors and notified them that production is on pause until after Labor Day, when the next chili season begins. According to a letter obtained by the Washington Post, the company says the peppers haven’t achieved the ideal shade (they’re still too green), and it would affect the hue of the finished product. Huy Fong has struggled with supply chain issues for the red jalapeños it needs to make its sriracha sauce since 2017, resulting in limited production. Huy Fong’s production problems illustrate the vulnerability of manufacturers that rely on a single or limited source of supply, as well as the dangers climate change and extreme weather pose to key ingredients used in sauces and dressings.
- Sustained consumer demand for its higher-priced spices and seasonings amid sticky inflation boosted sales and profits for spice giant McCormick in the latest quarter, Reuters reported in March. The company's volumes for the quarter dipped 1% after declining by 3% the previous quarter, while its prices rose 3% after rising 5% in the previous quarter, according to Reuters. In a call with investors, McCormick’s CEO said he expects volume trends to continue to improve. Resilient consumer spending in the first quarter is helping to support aggressive price increases by seasoning and dressing manufacturers without taking too heavy a toll on volume sales. Increased promotional activity and easing up on price hikes are helping to narrow the price differential between McCormick-branded products and private labels, slowing the pace of volume decline, per Reuters.
- Prices for spices, seasonings, condiments, and sauces were about 350% higher in 2023 than in 1978 (a $69.94 difference in value), according to the US Bureau of Labor Statistics (BLS). Between 1978 and 2023, spices, seasonings, condiments, and sauces experienced an average annual inflation rate of 3.4%. As such, for an equivalent purchase, spices, seasonings, condiments, and sauces costing $20 in 1978 would cost $89.94 in 2023. However, compared to the overall inflation rate of 3.47% over the same 45-year period, inflation for spices, seasonings, condiments, and sauces was lower, according to BLS data.
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