Guide
Condiments are good business. According to the data of various calibers, the overall size of China's condiment market is at least 4000-500 billion, and it has maintained stable and rapid growth for a long time in the past. Whether it's for home use, catering or pre-packaged food, people always need "taste" in their diet, which means that condiments may be one of the few good industries that are not so affected by downstream demand changes and habits. After all, "stable growth" is already an industry trait that can be encountered but not sought after in this era. Compared with the B-end track where cost is king and efficiency is paramount, C-end condiments have given enterprises infinite reverie. This also seems to explain why many non-traditional condiments have also entered the track.
In the past few years, we have seen that many food, catering and retail channel companies have taken advantage of their accumulated advantages to launch compound seasoning product lines. And the field of basic condiments has also ushered in new players. In March 2023, Sichuan Yuanjingda Food Co., Ltd., a wholly-owned subsidiary of Luzhou Laojiao Group, acquired Huguo Chen Vinegar Co., Ltd., and changed its name and upgraded it to Huguo Flavor Industry. At this year's Chengdu Sugar and Wine Fair, Luzhou Laojiao not only announced its entry into the condiment industry in a high-profile manner, but also fully launched its product line, including the main "ancient method of zero addition" of the old tank soy sauce, the main brewing process of the old altar vinegar, the main Sichuan regional characteristics of Sichuan cooking wine and strong spice wine, etc. It is not difficult to see that Luzhou Laojiao hopes to use its popularity in the high-potential category of liquor and mental assets such as "Laojiao", "Strong Fragrance" and "Sichuan" to achieve dimensionality reduction in the condiment industry.
Image credit: Photo by The Rees Project
Image credit: Photo by The Rees Project
The high-profile action of Luzhou Laojiao confirms the confidence and expectation of the enterprise in the condiment industry, and also confirms the stereotype of everyone in the condiment industry, such as the low product threshold, anyone can enter the market to make condiment......s; Finally, the homogenization of industry products is very serious, and consumers' brand awareness of the condiment industry is also vacant, even if there may be more than a dozen different condiment categories in Chinese's kitchen, but there are few brands that consumers can actively mention. The fact that big brands in the condiment industry can easily span multiple condiment categories and achieve category extension also reflects that consumers' mental cognition is not occupied by other brands. If high-potential enterprises outside the field can enter the condiment industry with the accumulated brand mental assets, channel capabilities and cost scale advantages, then it is not completely impossible to defeat time-honored enterprises. For the time-honored enterprises in the condiment industry, if they can seize the brand mentality in the category, they will have the opportunity to become the next Haitian.
After all, the mind is the ultimate battleground in business competition.
So what are condiment companies in different fields doing, and what should they do?
Sugar and salt - the problem of national brands
Sugar and salt are probably the categories with the highest household penetration rate in China, but the least brand attention. Most C-end consumers may not be able to accurately name the brand of edible salt and sugar used at home. Even Chinese brands such as China Sugar and China Salt are difficult to enter the minds of consumers in a real sense. To some extent, this is indeed determined by category attributes, such as raw material attributes, low technical content in cognition, low category attention, and so on. However, we have to admit that rice, eggs, and drinking water with the same raw material attributes have given birth to many successful brands with national degrees, and in high-end markets such as Europe, America, Japan and South Korea, there are also many national brands of sugar and salt such as Morton, C&H, Domino, Nissin and Snowflake. It can be seen that although there are differences in categories, the actions of enterprises are the core elements of building a solid brand awareness.
Under the premise that it is difficult to differentiate the product itself, overseas brands will carry out packaging innovation and specifications to meet the needs of different C-end users and scenarios. More importantly, these brands usually take packaging as the core position of product communication, and continuously strengthen the impression of the brand in the minds of consumers with a unified, eye-catching, and terminal differentiated visual system, so as to achieve the effect of "sales is product promotion".
Image source: Internet
Perhaps the road to building a national brand directly is indeed difficult, and sugar and salt companies are also trying to rely on the new trend of health to launch new categories to achieve branding, high-end, and even give full play to the non-condiment use of sugar and salt, such as vegetable salt. This may be a shortcut to building knowledge.
Image source: Internet
Image source: Internet
However, before sugar and salt brands can really establish awareness, some new categories that may have their own natural health awareness are quietly entering the market.
Among them, the most representative Songxian Xianxian, by using the "natural freshness" cognition of matsutake in the mind, from 2021 to 2023, Songxian's revenue has maintained an annual growth rate of 300%, and the sales of Douyin channel alone have exceeded 110 million yuan. In addition to Songxianxian, many companies have also launched condiments that focus on natural umami, trying to replicate the success path of Songxianxian. "Natural umami" can be foreseen to become an upgrade direction of the basic condiment market in the future, but for enterprises entering this track, how to define their own categories, how to define their main competitors, and how to find their own differentiated positioning with real conversion efficiency may determine whether the brand will become a pioneer or a martyr. At least, it's far from a simple matter of extracting ingredients from ingredients, giving them a scientific name, and selling them in the market as pre-packaged products.
Image source: Internet
Image source: Internet
Basic condiments – all with 0 additives, and then what?
If you walk into the condiment venue of this spring sugar and wine fair, you can see that the most frequent word is undoubtedly "0 additive". Almost every condiment you can imagine, soy sauce, vinegar, cooking wine, bean paste, rattan pepper oil...... will be added with 0 as the core positioning of the brand. In a sense, these companies may be trying to replicate the successful path of Qianhe 0 adding soy sauce in the past five years.
Image source: Photo by the Rees Project
Since 2008, Qianhe Flavor has started the R&D and sales of "0 added soy sauce". Since 2019, in the cooperation with Reece Consulting, Qianhe has determined the brand strategy with zero added soy sauce as the core, and "never added monosodium glutamate, pigments, and preservatives" as the brand's differentiated positioning, achieving a rapid growth of 30-50% year after year. Especially after the Haitian double-standard door incident, the attention of broad-spectrum consumers to "technology and hard work" has been further improved, which has supported the continuous growth of Qianhe.
However, if we review Qianhe's successful path in soy sauce, it is not difficult to find that zero addition is a new category direction recognized by consumers, but the premise of success is always sufficient differentiation. Before the rise of Qianhe, the soy sauce industry was dominated by the umami soy sauce of Haitian and Lee Kum Kee. This means:
On the one hand, for the second and third echelon companies, if they want to establish differentiated cognition, then they will have a very clear opposing target; on the other hand, although the number of products added by 0 at that time was very small, this is indeed the weakness behind the strength of umami soy sauce in the mainstream consumer cognition, and it is a very differentiated concept. This is also an important foundation for the success of Qianhe's zero-added category strategy. But when we return to the current condiment market in 2024, these two conditions seem to no longer exist in most condiment tracks. In 2024, 0 addition is currently more like a threshold to enter the public eye and enter the mid-to-high-end price segment, and the "aesthetic fatigue" effect on consumers is constantly emerging. What's more, the "zero additives" claimed by many brands do not mean that they only include a clean label of natural raw materials in the full sense, but only do not add some additives. Standing in front of the shelf, consumers may be tempted to ask, "OK, it's all 0 adds, and then what?"
Health and deliciousness are the eternal themes of condiments and even food categories. If we turn our eyes to categories or markets that are becoming healthier faster, we may be able to find some possible directions. In the field of snacks and beverages, the iteration direction of new products has shifted from the traditional sense of "zero addition" to "low burden" and "beneficial function", and even to the more short-term "fresh" field. In the Japanese market, where the food culture is similar, we can also see the iteration of condiment products that are low in salt and sodium (low burden) and more in pursuit of fresh taste. Perhaps in the future, the opportunities for new categories of basic condiments will also develop in a similar direction.
Image source: Internet
Compound seasonings – instead of competing in taste, it is better to innovate in categories
Compound seasonings are probably the most talked-about subcategory with the highest growth expectations in the entire condiment industry. With the increase in modern consumers' demand for convenience, changes in population and family structure and many other factors, the market size of compound seasonings has reached about 200 billion. Although a number of companies have been listed, this track also lacks a real national brand or even a big brand on the C-side, and the reshuffle process of the enterprise is far from beginning, still showing the overall trend of "big market, small brand".
When promoting their own brands, most of the existing brands will still focus on "authentic taste", "good ingredients", "ancestral recipes" and other communication points to try to prove that their products "taste better" than other products. However, similar to the "0 addition" above, although companies rack their brains to explore various differentiation points that can endorse their brands in terms of technology, raw materials, and mental assets, there is still a considerable distance from truly establishing differentiated cognition on the consumer side. It is conceivable that a compound condiment consumer will be confused by these dazzling and gorgeous words in front of the shelf.
History has proven many times that if you want to truly make your brand stand out in this highly homogeneous market, category innovation is the best solution. But where are the possible directions for compound seasonings? The author proposes three possible directions here:
Image credit: Photo by The Rees Project
First, there are opportunities for imported categories
Although consumers often mention that they don't pay attention to the brand when buying compound condiments, they are more concerned about one type of product - that is, imported Western, Japanese or other overseas seasonings. It's easy to understand that the essence of a brand is to reduce the risk of choice. For categories that they don't understand, people will always be more inclined to use brands instead of their own selection thinking. The brand attention that comes with the imported category gives the up-and-coming brands more possibilities than the traditional categories. On the one hand, the high level of interest in brands means that consumers will have more patience to pay attention to what brands are saying and doing, and more importantly, there are often natural targets for these categories. Whether it is Kewpie or Heinz, if they can find the weakness behind their strength, it is not impossible to overthrow their dominance in the Chinese market.
Second, keep up with the rhythm of catering
On the whole, condiment is a traditional industry, but the change of people's dietary taste habits is a very rapid process. Therefore, the direction of innovation in condiments is highly dependent on the observation of the catering and even takeaway industries. Changes in the F&B industry are likely to guide condiments to a large extent. For example, new trends such as "one-person pot" and "hot pot with soup" in the chain hot pot/sauerkraut fish industry will undoubtedly guide their mapping in the condiment industry, with small pieces and hot pot bases that focus on the quality of the soup being good examples. Not only soup shabu catering, but also large items in chain stir-fry catering may gradually form corresponding compound seasoning categories in the future.
Image source: Photo by the Rees Project
Image source: Photo by the Rees Project
Third, the differentiation of regional tastes
China is a huge market, which also means that even for the same category, there will be huge differences in taste preferences and ingredient preferences in different regions of the country. For national categories such as hot pot and barbecue, focusing on regional taste demand may also be an important direction for category differentiation in the future.
Fourth, homogeneous competition is both a threat and an opportunity for enterprises. No matter which condiment sub-category, if it can take the lead in breaking through, it is expected to become the trendsetter of the next era of this stable growth track.