Hot Sauce: A Hot Commodity
The outlook for the Hot Sauce Production industry remains largely positive, although overall market saturation is anticipated to limit growth, according to IBISWorld, the nation’s largest publisher of industry research.
Whereas the previous five years were characterized by increasing market acceptance and usage of hot sauces despite the economic downturn, the next five years will be characterized by slow growth in per capita consumption despite expected improvement in the US economy.
As a result, prerecession growth rates will likely remain a thing of the past, with total industry revenue is estimated to increase at an annualized rate of 4.3% to $1.3 billion.
Over 2012, revenue is forecast to grow 4.5%, fired up by growing demand from the food service sector and supermarkets. For this reason, industry research firm IBISWorld has added a report on the Hot Sauce industry to its growing Food Production report collection.
Mild, medium or hot? The Hot Sauce industry remained on fire during the economic downturn of recent years, albeit with a mild slowdown in revenue growth.
According to IBISWorld analyst, Agata Kaczanowska, hot sauce demand was boosted by positive demographic consumption trends, a growing number of hot sauce producers and brands, rising demand from the food-service sector and growing supermarket shelf space for hot sauce in line with consumer demand.
This industry manufactures spicy sauce made from chili peppers and other ingredients. These products are then packaged and distributed to grocery wholesalers, supermarkets, specialty food stores, and food service contractors for human consumption. This industry excludes chunky salsa and paste-based products.
According to figures from the US Department of Agriculture (USDA), between 2006 and 2011, US per capita consumption of chili peppers has grown at an average annual rate of 1.7% to 6.9 pounds, demonstrating rising demand for spicy food among consumers. Over the same period, IBISWorld estimates that the US Hot Sauce Production industry has grown at an annualized rate of 5.8%, including an increase of 8.0% in 2011 to $1.0 billion.
“The industry's growth is largely attributed to the rising popularity of hot sauces, and spicy foods in general, over more than a decade,” Kaczanowska says.
Assisting this trend has been increasing immigrant populations in the United States that have brought cuisines that favor hot sauce and other spicy additions. In response, restaurants and supermarkets have adapted to their customers' changing tastes.
In particular, major supermarkets and grocery stores have attempted to cater to ethnic cuisines, often specifying entire food aisles particular to certain ethnic foods (e.g. Mexican). Furthermore, there has been comparatively strong growth in ethnic supermarkets in recent years, driven by the growing Hispanic and Asian populations in the United States.
Over the five years to 2016, the outlook for domestic hot sauce producers remains largely positive; although overall market saturation is anticipated to limit growth.
For more information, including latest trends, statistics, analysis and market share information, download the full report from IBISWorld on the Hot Sauce Industry
IBISWorld Hot Sauce Industry Market Research Reports Contain:
About this Industry
Industry at a Glance
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Jargon & Glossary
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide.