A new report on the spices and seasonings category sees retail private brands as underpenetrated and anticipates strong growth in the category in the United States.
The report from investor group Brown Gibbons Lang & Company (BGL) said the global spices and seasonings market is expected to reach $23 billion by 2026, noting demand for the category continues to grow as cooking at home continues to rise.
The report, “BGL Food & Beverage Insider – Cooking Up M&A in Spices and Seasonings,” noted large acquisitions have given some industry leaders additional scale and market capabilities, fueling the growth of the category overall. The report mentioned the acquisition of Olde Thompson by Olam International, a $950 million transaction. Olde Thompson was a leader in private brand spices, and with private label accounting for roughly 26% of the U.S. spices and seasonings industry, per IRI, Olde Thompson has seen increased private label penetration recently, alongside growing demand for health, natural, organic and clean-label spices.
The BGL report noted other trends driving the interest beyond cooking at home such as U.S. consumers evolving their tastes toward more exotic flavor profiles, a rise in health-conscious shoppers and homecooks that feed into natural and clean eating, and the value-oriented consumer is exploring private label, driving that market up.
Lastly the report notes that financial buyers have been very active with a number of private equity sponsors announcing acquisitions in the last year, including Incline Equity Partners (Starwest Botanicals), Audax Group (Urban Accents), Frontenac Company (Monterey Bay Spice Company), and Norwest Equity Partners (Red Monkey Foods).
For more on the BGL Report, it is available for download here.