Its a saucy affair!

Although the Indian table sauces market is smaller in size when compared on a global scale, the future looks highly promising with high forecasted growth rates and the increase in usage of products from the organized market when compared to homemade sauce products. Consumers are increasingly adapting to international fast food cuisine such as pizzas and burger sandwiches etc. which is driving this trend. According to the Datamonitors latest Market Insights report: Table Sauces in India, the Indian table sauces market is worth around INR 204.3 crores in 2009 and has been growing at a CAGR of 10.9% over the past five years. The table sauce market in India is expected to grow at a CAGR of around 12.3% between the years 2009-14. Evolution of table sauces in India Indian cuisine has a traditional usage of food products such as chutneys and achaars along with their regular snacks. For instance, Indian breakfast foods such as Dosa and Idly are being consumed with coconut or ginger chutney for long whereas paranthas are normally consumed along with achaar. Further, Indian snacks such as samosas and pakoras have been regularly consumed along with coriander mint based chutney, also known as green chutney. So, when Maggi first launched its ketchup products in 1985, it was a natural reaction from the Indian consumer segment to accept the new product as a welcome addition to their snacking accompaniments. Tomato ketchup was the first ketchup product launched in the Indian market and it continues to dominate the overall table sauces market. The inclusion of newer flavors such as chilli, mustard, garlic etc. into the Indian market in the later years by various manufacturers has also been done keeping the local cuisine in mind. More recently, with the growing demand for western style fast food products and the growth of the fast food sector in India, imported sauces such as barbecue sauce and brown sauce etc. have started gaining importance, especially in the foodservice market. Present Situation: According to the Datamonitors latest Market Insights report: Table Sauces in India, the global table sauces category is dominated by the US followed by China, which contributed to around 20% and 15% of the global category value respectively. Globally, the Indian table sauces category ranks a distant 39th. However, it witnessed faster growth than any of the leading countries during 2008 09. Currently the Indian table sauces market is on a high with consistent growth in the consumption levels with every passing year. However, table sauce products are still regarded only as an alternative choice when compared to Indian food products for consumption along with various food products. The Indian sauces market still faces threat in the form of traditional Indian food products such as chutney and achaar which form a part of the traditional Indian cuisine and are hard to be replaced, along with homemade sauces and locally made sauce products in the unorganized segment. However this trend is identified by several manufacturers and they are keenly trying to replicate the flavor, taste of Indian food products in their sauce products. According to the Datamonitors latest Market Insights report: Table Sauces in India, India-specific flavors are on a rise, as manufacturers like

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Heinz (through its Home Style Chutney Sauce range) have been targeting traditionally popular, homemade flavors, which go with Indian food, to intensify localization and regionalization of its brands. For instance, Tasty treat has launched a mustard kasundi sauce which is based on an Indian homemade dip by the same name. Top Claims and Flavors: As with most products in the Indian market, the table sauces market is dominated with products based on the vegetarian claim according to the Datamonitors latest Market Insights report: Table Sauces in India. This is because in India, a large section of the population which is vegetarian and even among nonvegetarian population, several consumers do not consume non-vegetarian products during particular occasions. Further, other claims based on the healthy tag such as natural or no artificial flavor are gaining in popularity. The growth in the number of organized retail chains in the urban regions of the country has also fuelled a number of private label launches in the table sauces category by various modern retailers in the country according to the report. Although, there have been a spate of launches of new types of table sauces in the market, flavors which suit traditional Indian tastes continue to dominate the product launches even today. Tomato, which is the most preferred flavor in the Indian market, continues to top the chart of latest product launches according to the Datamonitors latest Market Insights report: Table Sauces in India. This is followed by other popular flavors such as mustard, chilli, garlic etc. which are used frequently in the preparation of various Indian dishes. New flavors influenced by western cuisine are also gaining favor, mainly in the foodservice sector, where these sauces are served along with various western style food products. However, the transition from foodservice to retail consumption for these products will take some more time. This is due to the fact that most Indian consumers continue to rely on Indian food products for athome consumption and prefer to try newer cuisines at restaurants and other foodservice outlets. Market Situation: Nestle S.A. has been the market leader in the table sauces market in India since its inception. However, its share has been on a decline with increasing competition. New players such as Cremica and Del Monte have been quite active with their product launches with market shares increasing every passing year. Currently Maggi has a market share of around 40% in the retail market, followed by Kissan from Unilever with around 26% market share. Other firms such as G.D. Foods have market shares of around 7% and 2.5% respectively.

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Company shares
7.1% 1.3%

19.8%

2004

45.9%

26.0%
7.2% 2.5%

39.9% 24.7%

2009

25.7%

Nestle S.A. Other H.J. Heinz Company

Unilever G.D. Foods Mfg (India) Pvt. Ltd.

The growing fast food sector has also been a major driver for increase in the consumption. International fast food chains such as Dominos, Pizza Hut, KFC and McDonalds have opened their outlets across India over the past few years and this has lead to increased consumption of table sauces in the organized market. These fast food chains have also influenced the food habits, especially those of the younger generation to move towards western food products that can be readily consumed with sauce, thereby increasing the consumption levels. However, most of the huge unorganized segment of the fast food sector in India, such as street stalls and mobile vendors etc. make use of homemade sauces in their foods. This is one area which remains a challenge for the various market players to overcome in the Indian market.

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Future Trends: With the increase in awareness levels among consumers, we believe that sauces with healthy tags attached would gain prevalence in the coming years. Also, with the rapid growth of the fast food sector, consumers will be attracted more towards consumption of sauces as accompaniments to these food products. Datamonitor foresees a bright future for table sauce products in India in the coming few years with increasing disposable income levels and more and more consumers accepting western food products. This growing demand for table sauces in India is further helped by the fact that various manufacturers have been adapting to Indian flavors with their latest product launches.

Article by Raghavendra Rao, Consumer Markets Analyst, Datamonitor based on analysis and inputs from Datamonitors latest report Table Sauces in India For further information on this title, please contact Aartee Sundheep on +91 40 6672 9586 or asundheep@datamonitor.com.

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