Production, Consumption and Exportation Trends
The United Kingdom is a major consumer of sauces worldwide. Some of the products are produced in the UK, while a large portion is imported from other countries. The market of sauces and condiments was estimated at $5.1bn in 2015 and is forecast to grow at a compounded annual growth rate of 1.72% between 2020 and 2025 . Companies are trying new ingredients and flavors within their sauces to attract new customers. In addition, the lifting of COVID-related measures, including lockdowns, could push consumers back to restaurants, however, the income squeeze in the UK will continue to fuel home-cooked meals, and the required ingredients and groceries, especially cooking sauces.
The sales of sauces manufactured in the UK grew from about GBP1.2bn in 2008 to GBP1.7bn in 2020. In terms of volume, sales of sauces manufactured within the country increased from 594 million kilograms in 2008 to 766 million kilograms in 2020.
The agri-food sector is the largest manufacturing sector in the country, composed mainly of SMEs (97%), with a turnover of GBP112bn and domestic sales of GBP100bn in 2021. However, food production in the UK is at risk mainly due to labor shortage and there is an increased pressure on manufacturers stemming from labor costs and the price of raw materials. This could lead some manufacturers to move out of the country. This provides room for Lebanese manufacturers of agri-food including sauces, to export products into the UK, contributing to product diversity in the country amid the rising pressure on producers.
The UK was the eighth largest exporters of sauces and seasonings in 2020, exporting about $461m in 2020. Exports of sauces grew from $145m in 2002, increasing by a CAGR of 6.6% over 18 years. Exports peeked in 2018 at $474.5m.
The United Kingdom is a net importer of sauces and seasonings, under HS code 2103 “Sauce and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal, whether or not prepared, and mustard”. In fact, imports of sauces grew from $333.1m in 2002 by a compounded annual growth rate of 6.3% to reach $995.7m in 2020, and slightly exceeded $1bn in 2021.
The imports of sauces products in the UK witnessed a significant growth between 2002 and 2008. In fact, they grew by CAGR of 17.9% to $895.4m in 2008, but then stagnated until 2016 with net imports of $811.3m. Since 2016 they grew gradually at a rate of 5.3% until 2021. The UK’s imports of sauces and seasonings from Lebanon grew substantially between 2002 and 2020. They were negligible up until 2011. In 2012, exports of sauces to the UK reached $837,000, and more than doubled to reach a peak of $1.7m in 2013, before gradually declining to $1.3m in 2016.
They increased again to $1.6m in 2019 but dropped to $1.1m in 2020. The rise in value in 2012 could possibly be justified by the revision in the Harmonized System in the same year.
Lebanese exports constituted 0.1% of the UK’s imports of sauces and seasonings, while the UK’s imports constituted 5.4% of Lebanon’s exports of these products.
Share of Imports and Unit Price in 2020
Europe is the major source of sauces and seasonings for the UK, slightly exceeding 80% of the total imports of these products in 2020. In this context, Netherlands accounted for 23% of imported sauces in the UK in the same year, followed by Italy (11.5%), Germany (9.9%), Poland (9.4%), Spain (6.4%), France (4.7%), Portugal (4.3%), Ireland (4%), Belgium (2.6%), Romania (0.8%), Hungary (0.7%) and Switzerland (0.5%), among other European countries. Major non-European exporters of sauces and seasonings to the UK included Thailand with a share of 5% of total imports of sauces into the UK, the U.S. (2.9%), China (2.6%), Japan (1.3%), India, Hong Kong and Malaysia (1.1% each), and Pakistan (0.7%). These 20 countries accounted for about 94% of imported sauces in the UK in 2020.
In terms of quantity, the Netherlands exports of sauces and seasonings represent 32% of the total quantity imported by the UK. Poland followed with about 10%, Italy (9.5%), Germany (9.3%), Portugal (8.2%), Spain (7.5%), Thailand (3.7%), France (3.5%), Ireland (2.5%), China (2%), the U.S. and Belgium (1.9% each), and India (0.9%), among others.
According to the ITC Trade Map, the unit value of imported sauces in the UK was $1,664/ton in 2019 and $1,876/tons in 2021. Based on calculations from data taken from the ITC’s dataset, the average price for 2020 was around $1,685/ton. The unit value of imports from Netherlands, Portugal, Poland, Spain, Greece, Malta, Nigeria and Sri Lanka to the UK came below the average unit value in the UK. The unit price of sauces exported to the UK from the remaining main exporting countries exceeded the average unit price of imported sauces in the UK, ranging between $1,700/ton and $4000/tons, with few exceptions such Pakistan ($4,981/ton) among the top 25 largest exporters. Most European exporters of sauces to the UK had the lowest unit value ranging between $900/ton and $3,000/ton, with an average of around $2,600/ton, with few exceptions such as Norway ($9,168/ton) and Switzerland ($6,424/ton). Meanwhile, sauces and seasonings from Lebanon were imported at price of $3,155/ton in 2020, which is relatively a bit high compared to main non-EU exporters, such as Thailand, the U.S., China, Japan and India. Still, the unit price of exported sauces from Lebanon to the UK was lower than that of Hungary, Pakistan, Switzerland, Mexico, Australia, Sweden and Denmark, among other relatively large exporters of sauces to the UK. However, the unit price of Lebanese sauces was higher than those exported from Egypt at $2.1/tons, but lower than the price of sauces exported from Oman, the two countries that exported relatively significant amounts of sauces to the UK in 2020. The lower the value per ton the more competitive the Lebanese products can be. Therefore, with a thorough study of the market and proper strategies of market entry, Lebanese sauces and seasonings exports to the UK have the potential to grow as the prices are relatively close to several exporters from Europe.
Main market trends in the agri-food market in the UK tend to evolve around healthy products as the aging population is more concerned about wellness and health-related issues. This trend also converges towards organic and Fair Trade products. In addition, consumers are paying more attention to sustainable products and environment-friendly items, seeking products that take into consideration animal welfare. This trend meets the rising vegan and vegetarianism lifestyle. Further, Ready meals are also trendy due to the fast-paced life in the UK. Free-From products are increasingly attracting consumers who avoid lactose, dairy, gluten and other components. In addition, the large ethnic population in the UK is driving the demand for ethnic dishes and cuisines. In parallel, efforts to support local producers have also increased through “Buy British” campaigns.
In terms of sauces, Imports of sauces, seasonings and condiments into the UK were mainly composed of sauces and preparations that consist of mixed condiments and seasonings (excluding soya sauce, tomato ketchup and other tomato sauces, liquid mango chutney and aromatic bitters), which represented 74% of total value of imported sauces in 2020. The imports of these specific products (HS 21039090) grew by a compounded annual growth rate of 7.2% between 2003 and 2020. Imports of these products stagnated between 2009 and 2013, but they have been consistently growing since 2015 from $559.8m to $730.2m in 2020 and $741.1m in 2021.
Most recent data from ITC Trade Map showed that imports tomato ketchup and other tomato sauces (HS21032000) followed with a share of 19.5% in 2020, imports of soya sauce (HS21031000) represented 4.2%, then mustard including prepared flour and meal (1.5%), mustard flour and meal (excluding preparations) (0.4%), aromatic bitters (of an alcoholic strength of more than 44.2% but lower than 49.2%, among other specifications under HS 21039030) (0.2%) and Mango chutney liquid (0.1%).
The growing consumer interest in sauces, seasonings and condiments in the UK as reflected by trade figures is partly due to the country’s large multicultural population, being a hub of attraction for multinational businesses, as well as a hub for international students and one of the top destinations for tourists. Consumers are increasingly demanding meals that are easy to prepare as well as ethnic and authentic food flavors. With the fast development of distribution channels, consumers in developed markets are become easily accessible, which allow companies to raise product awareness. Also, the technological developments across processed food have been providing innovative products to developed markets such as the United Kingdom, introducing new flavors to the market. In addition, long working hours and a fast-paced lifestyle are pushing consumers towards ready-to-eat and to-prepare sauces. As such, traditional ethnic sauces are expected to gain more traction in the UK market.
In this context, the large appetite for new cuisines, specialty foods and authentic foods, especially the Mediterranean and Middle Eastern cuisines can also drive the demand for Lebanese sauces, seasonings, condiments and dips. Also, the new trends of abiding by a healthy diet, as well as vegetarianism call for a larger intake of free-from products, salads, and vegetables- and fruit-based dishes that require a variety of seasonings and added flavors.
For consumers as well as restaurants and food producers, sauces are no longer the after-thought in meal planning, but the main and leading component of new dishes, especially in the UK. New trends show that consumers are abandoning traditional sauces for new exciting and exotic products.
The varieties in the UK’s culinary experience provide opportunities for Lebanese agri-food producers, especially for sauces producers to serve different recipes and different types of sauces for multiple dishes.
While existing Lebanese sauces, seasonings and condiments could have a large potential market in the UK, some of the products might require an adjustment, or to be adapted to the tastes requested by the the UK market. However, such product innovation requires a deep study of the target market before launching new products.