For long, tomato ketchup has been the mainstay of the condiments segment in India. That is changing with the entry of numerous dips, sauces and spreads. Euromonitor International estimates that the market for table sauces in India stood at Rs 2,105 crore in 2017, and is projected to grow to Rs 3,231 crore in 2020. Mayonnaise, which had a market value of Rs 292 crore in 2017, grew to Rs 594 crore in 2020.
The past year saw non-traditional players, the likes of Jubilant FoodWorks and craft beer company Simba, foray into this segment, and established companies like Del Monte Foods roll out newer products. Though companies in this segment have been impacted due to a decline in sales from the HoReCa segment (hotels, restaurants and catering), their retail sales have risen considerably. Del Monte witnessed a 40-50% year-on-year growth in the dips and spreads category, while Dr Oetker claims its Italian sauces range, under FunFoods, has grown threefold, compared to the pre-Covid period. On BigBasket, the dips, sauces and spreads segment has seen 100% growth since January.
FMCG giants Hindustan Unilever and Nestlé have a presence in this category through their brands Kissan and Maggi, respectively. Mrs Bector’s Cremica and Veeba Foods are two other active players in this segment, and start-ups such as Wingreens Farms, Epigamia, Urban Platter and Licious, too, have dabbled in it.
Saucing it up
BigBasket has launched 30 stock keeping units (SKUs) under its private label Happy Chef in the past six months. The company’s original range, launched about four years ago, included basic sauces; it has now added variants like black olive pasta sauce and Malaysian sauces.
“Typically, you find these products by international brands at very high price points of Rs 800-900 per kg, but our products are available at Rs 200-350 per kg,” says Seshu Kumar Tirumala, national head, buying and merchandising, BigBasket.
Del Monte Foods is going with “value pricing” in the base variants, and a “mid-premium positioning” for its more experimental products. In October, the company introduced a range of oriental sauces and a momo dip. “A 900 gm pouch of our eggless mayonnaise is priced at Rs 165, which is our top seller; at the same time, flavours like cheesy garlic mayo, achari mayo are offered in squeezy top-down bottles and jars,” says Yogesh Bellani, CEO, FieldFresh Foods, a joint venture between Bharti Enterprises and Del Monte Pacific. A 265 gm jar of its Cheesy Garlic Mayonnaise is priced at Rs 85.
The uptake in dips and sauces is no longer concentrated in the metros. According to a recent report by Nielsen, the convenience foods category — which includes ketchup, sauces, ready-to-eat products and cheese — grew three-times faster in smaller towns, as compared to the metro cities during January-September 2020.
Wingreens Farms has been increasing its presence on online channels to reach the smaller towns. “We only had two-three SKUs on Amazon Pantry and Flipkart Supermart earlier; now, all our 21 SKUs in the dips and spreads category are present across platforms,” says Anju Srivastava, founder and CEO, Wingreens Farms. Online channels now contribute 25% to its sales, a jump from 4-5% in the pre-Covid period.
The right flavour
As brands launch exotic variants in the market, analysts are sceptical of whether these will garner mainstream acceptance. “The market is still dominated by tomato ketchup and, to some extent, mayonnaise,” says Rishav Jain, senior director and lead – consumer and retail sector, Alvarez & Marsal. Tomato ketchup commands about 60-70% of the sauces market in India.
While multiple brands of spreads are scaling up fast, he adds, the ability to build a mainstream, deep distribution and regular consumption would be critical here.
Earlier in the year, Dr Oetker decided to cut down on its niche offerings and focus instead on the base flavours. “At a time, when necessity is the need of the hour, consumers do not need exotic flavours of mayonnaise, but products they frequently consume,” says Oliver Mirza, MD and CEO, India and SAARC, Dr Oetker.
Experts believe that given the convenience in cooking these products offer, they are likely to find takers even post pandemic, albeit not at the same level. To drive adoption for these products further, companies will need to invest in product development and introduce single-use packaging.
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