2024 China Condiment Industry Trend Release, which key points are worth paying attention to?

Based on the essential nature of the seasoning industry, in some ways, the overall business is easier to operate than in other consumer goods industries. However, everything seems to have changed in 2023: leading companies like Haidilao and Zhongju Gaoxin have continued to experience fluctuations; overcapacity, oversupply, and homogenization have become common industry challenges, putting pressure on corporate achievements, and many manufacturers have personally felt the difficulties of the industry.

Based on the essential nature of the seasoning industry, the overall business is somewhat easier than in other consumer goods industries. However, everything seems to have changed in 2023: leading companies like Haitian Flavoring and Zhongju Gaoxin have continued to experience fluctuations; overcapacity, oversupply, and homogenization have become common industry challenges, putting pressure on corporate achievements, and many manufacturers have personally felt the difficulties of the industry.

What will the seasoning industry look like as we Enter 2025?

Recently, Zhu Qiming, a brand observer for "China Food Industry," brought insights into the "2024 Development Trends of China's Seasoning Industry." He believes that the overall trend of development in China's seasoning industry in 2024 is shifting from incremental competition to stock competition, from quantity growth to quality growth, from capital-driven to operation-driven, and from following trends to leading innovation.

Zhu Qiming, brand observer for "China Food Industry"
 

So, from the perspectives of manufacturers, consumers, and products, what key points should we pay attention to in China's seasoning industry in 2024? This article will provide a comprehensive interpretation of the trend report.

 

01 Manufacturer Oligopoly

The oligopoly of manufacturers is a major trend in China's seasoning industry, indicating that the concentration of the seasoning industry is further increasing.

According to a set of relevant data from Zhihui Consulting Research Institute, compared to 2018 and 2022, the overall market concentration of the seasoning industry has increased by 32.7%, with the market concentration of the soy sauce industry increasing by 19.5%, the vinegar industry by 7.7%, and the hot pot seasoning market concentration by 31.8%.

Under the Matthew effect in the industry, the strong become stronger. The scale advantages and brand influence of leading enterprises are further highlighted, and market share continues to concentrate towards leading companies and major brands, while small and medium-sized enterprises without distinctive features continue to fall into growth difficulties, with survival pressure further increasing and the speed of elimination accelerating.

 

02 Homogenization Competition

The seasoning industry is a typical "small products, large market," which means that the entry threshold for the industry is low and the industry is highly attractive. This characteristic allows the seasoning industry to accommodate numerous market participants, with quality varying widely. This leads to severe homogenization competition, as even small enterprises or those without technical content can replicate new products when they appear in the market. Products like hot pot base, spicy hot pot seasoning, skewered food seasoning, fish seasoning, doubanjiang, pickled vegetables, and dipping sauces have become the "disaster areas" of homogenization in the seasoning industry.

Therefore, as product competition remains the core of competition among seasoning enterprises, breaking the curse of homogenization has become the minimum requirement for innovation for many enterprises. However, Zhu Qiming also mentioned that the cycle for micro-innovation to be surpassed is becoming shorter and shorter, making it increasingly difficult to shape differentiated competitive advantages for enterprises. Only innovations that surpass the industry can truly shape a company's competitive advantage within a certain timeframe.

 

03 Product Health

People are paying more and more attention to health issues, and there is a greater demand for the healthiness of seasoning products. Especially after the "Hex Technology" incident last year, consumers have developed a significant trust crisis regarding processed foods, and products with clean labels are more favored by consumers. Relevant surveys show that 85% of consumers in the Asia-Pacific region pay attention to food ingredient lists when purchasing, while 88% of Chinese consumers prefer products with shorter and simpler ingredient lists.
 

Specifically, fewer additives and zero additives in healthy ingredients and production processes have become mainstream. Products containing preservatives are still unpopular in the C-end market, while product quality in the B-end is continuously moving from murky to transparent. By innovating healthier products to seize market opportunities and break homogenization competition, many enterprises have benefited.

 

04 Technological Competition

The core of product power competition is the competition of technological innovation strength. Using technology to raise the entry threshold of the industry and fundamentally widen the gap with competitors, making it difficult for imitators and followers to take action, has become the most important weapon for many enterprises to avoid internal competition.

For example, in an increasingly competitive market, insights into consumer demand and rapid responses require strong independent R&D capabilities and the provision of diversified R&D services; strengthening the construction of innovative technical talent teams has become an important means of technological competition; the increasing consumer demand for freshness, nutrition, and taste requires technological advancements such as low-temperature microwave sterilization technology and ultra-high pressure cold sterilization technology to achieve. Tianwei Co., Ltd. has achieved zero additives in preservatives across its entire product line, significantly enhancing its competitiveness.

 

05 Proximity Shopping

"Proximity" refers to retail formats and new consumption models that meet consumers' needs for convenience and immediacy, which means the "shrinking physical consumption radius" of consumers. This is mainly due to significant changes in consumer behavior patterns:

A set of relevant data shows that 80% of consumers' shopping is basically done on pillows, sofas, toilets, or downstairs stores. Although today's consumers are becoming more professional and rational, they are also becoming increasingly lazy. The advantages of proximity shopping are highlighted, which also means that manufacturers' sales networks, products, and services must be infinitely close to consumers.