Sauces, Dressings and Condiments in Spain

2020 IMPACT

Increased demand as home cooking becomes a necessity during the lockdown

Given the long periods of self-isolation and the closure of consumer foodservice operations during the COVID-19 epidemic, Spaniards have had little choice but to prepare more family meals at home in 2020. This is leading to strong growth for the vast majority of sauces, condiments and dressing, with the minor exception of salad dressings, which is set to witness a low decline in demand as more consumers opt for prepared salads, which often include a separate sachet of dressing.

Private label retains its lead, while brands also achieve strong growth

Private label is set to retain and even extend its cumulative lead in 2020 as many consumers know these products and appreciate their lower prices during the financial restraints during the lockdown periods. However, consumer confidence in branded sauces, dressings and condiments is also increasing during the pandemic as many shoppers seek the quality reassurance offered by trusted brands, with the epidemic perhaps reinforcing this need among many.

Premium products likely to be hit by consumer financial restraints during the pandemic

Prior to the COVID-19 epidemic, the improving economic situation in Spain encouraged some consumers to opt for more premium sauces, dressings and condiments. There was strong demand for premium products which led to increasing average unit prices over the latter half of the review period.

RECOVERY AND OPPORTUNITIES

Premium developments likely to be put on hold

After the strong growth enjoyed in 2020 as more consumers prepared their meals at home during the lockdown periods, sauces, dressings and condiments is expected to witness marginal declines in demand over the forecast period, with constant 2020 value growth beginning to slightly outperform volume performance only towards the end of the period. The innovation witnessed in this category prior to the COVID-19 epidemic involved reformulating recipes, as well as launching more gourmet and artisanal products.

Restrained household budgets an opportunity for private label

Private label was already the leader in sauces, dressings and condiments at the end of the review period, although its value share had fluctuated slightly over the period. However, as household budgets are likely to be restrained for some time after the rigours of the COVID-19 pandemic, the trend to less expensive products will be an opportunity for private label retailers, such as Mercadona, to gain share.

Margins to decline

As a result, sauces, dressings and condiments will likely be a more competitive area, at least until household budgets begin to recover. The large retailing chains will be keen to attract shoppers with low prices and offers, exerting pressure on manufacturers which will see their margins decline.