Condiments experienced a significant sales surge during the pandemic, with a 21.3% year-on year growth of 2020. Statistics show that the category has maintained that advantage, falling just 1% in 2021 from that high. 2022 is a good time for condiment brands to lay the foundation to further extend their pandemic gains, while addressing challenges to the future market.
Despite a rebounding foodservice industry and resumption of many out-of-home activities, longer-term hybrid work styles and record inflation across goods and services are expected to extend the need for at-home meal occasions, benefitting the category. Sales are expected to grow at 2-3% annually for the foreseeable future, bringing the category to top the $10 billion threshold by 2023.
But younger consumers under 45, need some attention; they are less engaged than their older counterparts. While there is a generational divide, versatility can be the connector: helping consumers of any age find diverse, flavorful and healthy applications for condiments can sustain occasions and audiences, while building new ones.
Usage remains widespread
While traditional options like ketchup, mayo, mustard and dressing still top consumption, dynamic sales patterns (with stunning gains followed by less dramatic declines) indicate that frequency increased and, for many brands and segments, has lingered, as at-home meal occasions remain somewhat elevated for at least the near term.
Taste predictably further secured its dominance as the primary food choice driver again in 2022. Tired of making sacrifices, consumers are eager to indulge themselves more. Some of the more “responsible” food choice factors, like cost and healthfulness, lost a sliver of influence between 2020-22, as enjoyment and convenience made gains. While economizing will naturally be top of mind for many consumers because of sky-high food costs, the added benefit of enjoyment will still very much influence choice. Relatively economical condiment brands of any type are poised to win, especially if they focus on delivery of an elevated flavor experience and versatility.
Use flavors and menus to drive engagement among younger adults
Consumers over 45 are the most likely to have broader repertoires of six or more types of condiments. Conversely, consumers under 45 are more likely to have narrower ranges of product types consumed.
Adults of any age are likely to stick with traditional condiments. But while older adults more likely to stick with the classics, they are also more likely to consume the periphery segments: horseradish, olives, and relish. This identifies two needs for the under-45 market: raising engagement in the traditional go-to condiments, and also with less-traditional condiment types.
Millennials and Gen Z are dedicated foodservice patrons and well-documented self-professed foodies. Brands can turn to foodservice operators to address both needs in furthering engagement with condiments among these consumers – using menus for inspiration in flavorful product development, or pairing ideas to extend product versatility with elevated versions of mainstream options like sriracha ketchup, chili lime mayo and beer or chili honey mustard.
Brands can also work with foodservice operators to drive awareness and trial of less-explored condiments through menus offerings for these avid diners: think kimchi-topped burgers, horseradish-stuffed olive martinis or charcuterie boards featuring pickled ingredients.
Brands continue to stoke consumer creativity through versatile applications
Consumers are at a crossroads: grappling to balance new routines with rising prices, and eagerness to simply explore and indulge a little. Yet, the circumstances do present some challenges. Sharply rising food and drink prices will compel more than a quarter of US consumers to seek more affordable food/drink options in 2022, according to Mintel’s Global Food and Drink Consumer. Consumers are much more likely to try to find savings through stock-ups and reduced dining out, followed by channel and brand shifts, rather than through overt attrition of packaged foods and drinks.
Versatility is not only a hallmark of condiments and dressings, but also, it’s one that brands should lean further into. Nearly three quarters of category participants prefer condiments that can be used in a variety of ways, and more than half would like to see more suggestions for using condiments in recipes.
Source: Mintel
Brands use flavorful, culinary cues to engage younger adults
Younger consumers may be less likely to use condiments, but they are notably more likely to express interest in the full range of product innovations presented, and would be willing to pay more. These concepts are ground in convenience, taste experience and environmental influence.
Flavor is essential to product choice in the category and a likely catalyst to draw enhanced engagement and build loyalty among younger adults. Millennials and Gen Z are well-documented prolific foodservice patrons, often credited with driving culinary, cuisine and broader food trends. Almost half of adult consumers under 45 seek condiments with restaurant-centric flavors, reinforcing the notion that flavor exploration can stimulate both consumers and brands in the category. The same is true among the category’s most-dedicated users: those who use six or more condiments.
Not only does this indicate that product development initiatives that tune into adventurous palates for condiments will find an audience, but it also signifies that marketing to support diversified applications should be equally culinarily inspired.
Brands like Primal Kitchen, Lee Kum Kee and McCormick are tapping into fun, flavorful menu-inspired offerings in the mayonnaise sub-segment, like sriracha, chipotle lime or garlic aioli, bringing the idea of brown-bagging it to new levels.
Connect health and convenience to meet parents’ needs
Demonstrating the strong overlap between adults under 45 and parents, many of the same areas of condiment interest speak to parents, who also note a willingness to pay more for things like restaurant-influenced options, functionality and recipe-inspired combinations. While taste experiences and wellbeing prove to be compelling investments for parents, convenience is at the core, especially when it comes to their household’s health.
Nearly a third of new product launches carried cleaner formulation claims, largely focused on tangible claims such as “no artificial ingredients” or organic, leaving many simplicity-seeking parents with not-so-healthy impressions of the category overall.
Bucking the general sales trend of the category, especially in the ketchup segment, specialized better-for-you (BFY) formulations were the key to success. Heinz Organic and Simply Heinz were the sole brands under the category leader’s namesake to show growth. Simply Heinz offers the same ingredients as classic Heinz ketchup but with no artificial sweeteners. Heinz Organic is also created with no artificial sweeteners along with organically grown tomatoes.
Source: Mintel
Condiments reputation could use a new dose of healthy
While brands will want to proceed with balance to address both established and emerging consumer interests related to health, it may be another key to developing more dedicated younger audiences. Condiment users under 55 are more likely to seek healthy and functional attributes in their condiment choices, yet the most prominent such driver among these consumers is an interest in organic claims.
Reinforcing the notion that condiments primarily are enjoyed to enhance flavor and the taste experience, when asked to construct their ideal healthy condiment, consumers mainly honed in on mainstream health claims. Interest in low/no positioning significantly outranked supplemental claims, such as protein or fiber. Contemporary health ideals like GMO-free or functional claims are a factor with fewer consumers, yet suggest a disconnect with younger adults who express interest in these types of formulations in other food and drinks.
Still, condiments do not have strong associations with health; more than four in 10 consumers agree that most condiments are unhealthy and that long ingredient lists are often the culprit While brands will need to keep their primary function of taste in mind, a refreshed approach to conveying health may be warranted to engage younger adults.
Sustainability is worth the extra cost
Predictably, in a time of elevated costs everywhere, including food and drink, few consumers are keen on the idea of paying more for more condiment bells and whistles. Still, consumers do want more from condiments and the brands that make them: to feel good about sustainable packaging, more application ideas, exciting flavors, more nutritious options and even premium options. Now, with supply chain issues impacting manufacturers and elevated prices potentially influencing consumers, new product and packaging innovation may seem like an expensive risk.
However, sustainable packaging and other innovations are an important piece of the product development pipeline to help keep consumers engaged with their favorite brands and discovering new ones. Nearly three in 10 express interest in packaging innovation to make it more environmentally friendly. More than half of consumers say environmental responsibility drives at least some of their food/drink purchases, with an additional 22% anticipating it will in the future.
What we think
Condiments poised for continued success
The volatility of the last two years, coupled with rising prices everywhere, are likely to keep at home meal occasions elevated for the time being, benefitting the condiments category. Yet, despite the sustained gains, there is still ample room to grow consumer engagement across category segments and brand through repertoire and product diversification.
Reinforce value through versatility
Taste through flavor is the most important driver in the category, but price is important too, and in today’s landscape will carry even more relevance in product choice as the clear benchmark for value. Still, consumers seek condiments with diverse applications and are hungry for new use ideas, indicating that versatility is a must-have that can translate into value at any price. This calls for brands to not only position for versatility, but also double down on recipe and meal planning inspiration, communicating them in new and contemporary ways.
Take at-home meals to the next flavor level
Flavor exploration is likely the catalyst to draw enhanced engagement and build loyalty among younger adults, who can use a boost to their participation. Four in 10 adults under 45 seek out condiments with restaurant-centric flavors, reinforcing the notion that flavor exploration can stimulate both consumers and brands in the category, especially when dining out may be a little further out of reach for some.
