Poorly seasoned: 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 at an annualised 6.0% over the five years through 2018-19, to total $413.4 million. This trend includes expected growth of 3.3% in the current year. 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 slightly limited industry revenue growth...read more.

Industry Statistics & Market Size
Revenue
$413m
Annual Growth 14-19
6.0%
Forecast Growth 19-24
Profit
Employment
876
Businesses
82

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
  • Industry Report - Industry Locations Chapter

    The distribution of establishments in the Herb and Spice Processing industry is closely correlated with Australia's population and economic activity. Industry operators typically establish themselves in populous states and metropolitan areas, as this enables easy access to downstream markets. The majority of industry operators are based on the eastern seaboard and near the major population hubs of Sydney, Melbourne and Brisbane. As a result, Victoria, New South Wales and Queensland account for over 80% of industry establishments. Furthermore, the majority of vegetable farms are located along Australia's east coast. As processors are located close to their input suppliers, transport costs are further reduced...purchase to read more.

    Additional Insights for the Herb and Spice Processing Industry

    IBISWorld has determined the most important Key Success Factors for the Herb and Spice Processing 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 cafes, restaurants and takeaway food services and Demand from supermarkets and grocery stores in the Herb and Spice Processing industry impact industry performance..

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    What's in this report

    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

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from cafes, restaurants and takeaway food services
  • Demand from supermarkets and grocery stores
  • Real household disposable income
  • 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

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

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

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Herb and Spice Processing

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

  • Industry Globalization
    McCormick Foods Australia Pty Ltd, Wrigley Uno 2 Australia Pty Limited,
  • Table: McCormick Foods Australia Pty Ltd - financial performance
  • Table: Wrigley Uno 2 Australia Pty Limited - financial performance

  • 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
    Table: Industry Data for the Herb and Spice Processing Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Exports (2010-2024)
  • Imports (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    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 can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    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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