Toned down: Supermarket price wars have constrained industry revenue growth

Consumer appetites for processed herbs and spices have grown over the past five years. While many of the Herb and Spice Processing industry's products are staple items, consumers have demonstrated an increasing willingness to experiment with their food, trying new products and flavours. Industry revenue is expected to grow by an annualised 0.7% over the five years through 2017-18, to $232.4 million. Popular reality TV cooking shows and a general trend towards higher quality, healthier food have driven industry revenue growth over the past five years. However, the dominance of large-scale supermarkets as distributors of industry products has suppressed prices and kept industry revenue growth in check. Consequently, industry revenue is expected to decline by 1.5% in 2017-18...read more.

Industry Statistics & Market Size
Revenue
$232m
Annual Growth 13-18
0.7%
Forecast Growth 18-23
x.x%lock
Profit
x.x%lock
Employment
526
Businesses
36
Market Share of Companies

Industry Threats & Opportunities

  • The industry has benefited from cooking reality TV shows inspiring consumers to try new flavours
  • Popular cooking reality TV shows have boosted the use of processed herbs and spices
  • Supermarket competition will remain fierce and continue to force down industry prices

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    Industry Report - Industry SWOT Analysis Chapter

    The Herb and Spice Processing industry is in the mature phase of its life cycle. Processed herbs and spices have entrenched their position as staple items in home cooking over the past five years. Consumers are increasingly looking to add additional flavours and twists to their staple home-cooked dishes. While demand for processed herbs and spices continues to grow steadily, the market power of major downstream supermarkets, Woolworths and Coles, has forced prices downwards and prevented profit margin growth.Industry value added (IVA) measures an industry's contribution to the overall economy. IVA is forecast to rise by an annualised 0.4% over the 10 years through 2022-23. This is an underperformance relative to the economy, with GDP forecast to grow at an annualised 2.5% o...purchase to read more.

    Additional Insights for the Herb and Spice Processing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Herb and Spice Processing Industry are

  • Proximity to key suppliers
  • Guaranteed supply of key inputs
  • Establishment of brand names

    • IBISWorld analysts also discuss how external factors such as Demand from supermarkets and grocery stores and Real household disposable income in the Herb and Spice Processing industry impact industry performance..

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    What's in this report

    Industry Products

    What is the Herb and Spice Processing Industry?

    Industry operators process and package herbs and spices for use in food production, hospitality and home cooking. The industry does not include fresh herbs and spices.

    Industry Products
  • Spices
  • Leafy herbs
  • Root herbs
  • Seed herbs
  • Flower herbs
  • Mixed spices and seasonings
    • Industry Activities
  • Dry herb processing
  • Spice processing
    • Table of Contents

    About this Industry

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources

    Industry at a Glance

    Industry Statistics Snapshot
    Industry Structure
    Executive Summary

    Industry Performance

    Executive Summary
    Key External Drivers
  • Demand from supermarkets and grocery stores
  • Real household disposable income
  • Demand from cafes, restaurants and takeaway food services
  • Trade-weighted index

    • Current Performance
  • Rising popularity
  • Supermarket prices
  • Trade and participation
  • Chart: Revenue Growth

    • Industry Outlook
  • Stable demand
  • Supermarket competition
  • Export markets
  • Participation and profit
  • Table: Herb and Spice Processing Industry Revenue Outlook

    • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Herb and Spice Processing Industry Lifecycle vs The Economy

    • Products & Markets

    Supply Chains
    Key Buying Industries
  • Soft Drink and Pre-Packaged Food Wholesaling
  • Accommodation and Food Services
  • Supermarkets and Grocery Stores

    • Key Selling Industries
  • Outdoor Vegetable Growing
  • Under Cover Vegetable Growing

    • Products & Services
  • Spices
  • Leafy herbs
  • Mixed spices and seasonings
  • Seed herbs
  • Root herbs
  • Flower herbs
  • Chart: Herb and Spice Processing Industry Products and Services Segmentation

    • Demand Determinants
    Major Markets
  • Supermarkets and grocery stores
  • Export markets
  • Wholesalers
  • Food manufacturers
  • Food service establishments
  • Chart: Major Market Segmentation for the Herb and Spice Processing Industry

    • International Trade
    Business Locations
    Chart: Business Locations by State

    Competitive Landscape

    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Herb and Spice Processing

    • Basis of Competition
  • Internal competition
  • External competition

    • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Herb and Spice Processing Industry

    • Industry Globalization

    Major Companies

    McCormick Foods Australia Pty Ltd, Mars Australia Pty Ltd,
  • Table: McCormick Foods Australia Pty Ltd - financial performance
  • Table: Mars Australia Pty Ltd - financial performance

    • Operating Conditions

    Capital Intensity
  • Chart: Level of Capital Intensity for the Herb and Spice Processing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

    • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

    • Regulation & Policy
    Industry Assistance

    Key Statistics

    Table: Industry Data for the Herb and Spice Processing Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Exports (2009-2023)
  • Imports (2009-2023)
  • Wages (2009-2023)

    • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data

    Jargon & Glossary

    Food Standards Australia New Zealand
  • The agency responsible for developing and administering requirements for food safety and labelling in Australia and New Zealand.
    • Private-Label Products
  • A product purchased from a contracted manufacturer by a retailer or supplier, and sold under the brand name of the retailer or supplier, not the manufacturer.
    • Wholesale Bypass
  • A rising trend in the food supply chain, where end sellers and processors deal directly with each other and bypass intermediary wholesalers.
    • What Our Customers Say
    Why buy this report?

    IBISWorld’s Herb and Spice Processing market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Herb and Spice Processing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Herb and Spice Processing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Herb and Spice Processing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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