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What is the demand for spices and herbs on the European market?

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European imports of herbs and spices have gone up and down in the last five years. Sales of spices with immunity support functions, like ginger, curcuma and garlic, grew particularly fast in 2020, thanks to the Covid-19 pandemic. This increased demand by end consumers was also reinforced by social media promotion. The European countries that present the most opportunities overall are Germany, United Kingdom, Netherlands and Spain. The products most in demand are ginger, uncrushed pepper, dried capsicum or pimenta, curcuma, cinnamon and cloves. These spices are perceived as contributing to healthy lifestyles and therefore will continue to grow in the next years.

1. What makes Europe an interesting market for Spices and Herbs?

Europe is one of the world’s leading importing regions for herbs and spices, but it relies on imports from developing countries to a large extent, mostly for spices. This makes Europe an interesting target market for exporters from developing countries, regardless of occasional downward developments for certain products.

The strong dependence on spice supply from developing countries also means that virtually all of the intra-European trade consists of re-exports originally coming from developing countries. This is different for herbs, as most herbs consumed in Europe are also produced within Europe.

While there was evident growth in the 2015–2017 period, this changed in 2018 and 2019. However, the positive trend of the 2015–2017 period, when herbs and spices import values increased every year, was propped by just a few spices — most notably vanilla — which had a considerable impact on the aggregate.

More than 95% of imports from outside Europe come from developing countries. According to the first set of 2020 data, European imports of herbs and spices is increasing again in both value and volume.

While European imports are likely to increase in the next years, growth in Europe is forecast to remain lower than in other regions worldwide, such as South and South East Asia, where economic and market growth have been much higher on average in the past decade.

Limited competition from local production

Europe’s production of herbs and spices is limited, which means that for most products you do not need to worry too much about local competitors. There are however a few exceptions you need to know about: Bulgaria, Poland, Romania, Spain and Hungary have substantial productions of certain herbs and spices.

Bulgaria is one of the largest European producers of herbs and spices by a long way. Bulgaria’s production reached more than 80 thousand tonnes in 2017 and 61 thousand tonnes in 2018. Experts believe that most of it consists of capsicum, paprika and chillies. However, Bulgaria’s exports to other countries in the European Union are rather small (3.6 thousand tonnes in 2018), since most of its production is either consumed locally or exported to countries outside the European Union (between 12 and 20 thousand tonnes per year on average).

Poland is a big producer of thyme but also produces several other herbs. Poland is the second-largest exporter and producer of dried thyme in the world (after Turkey) and its annual production is estimated at 2 thousand tonnes. In addition to thyme, Poland also produces several other herbs, such as dried parsley and basil.

Romania had an approximate production output of 56 thousand tonnes in 2018. The lion’s share of Romania’s output is chilli peppers (80%–90% share each year). Romania exports between 1.7 and 4 thousand tonnes per year to other European countries.

Spain is the fourth-largest European producer of herbs and spices. In 2018, Spanish output reached more than 15 thousand tonnes, of which 43% were chilli peppers. However, Spanish production of dried chillies is not self-sufficient nor price competitive in comparison with other agricultural sectors. Decreasing domestic production is supplemented with imports, thus offering opportunities for developing country suppliers.

Hungary’s output in 2018 was almost 33 thousand tonnes. Chilli peppers accounted for 65% of this volume, and paprika (fruit of the genus Capsicum or Pimenta) took 20%. Hungary’s exports to other European countries range between 2.3 and 2.6 thousand tonnes per year.

Moderate growth for European import value expected

European import values of herbs and spices are expected to show small to moderate growth in the coming years. Import volumes often fluctuate not because of varying demand but due to non-stable production levels in origin countries. Overall, demand for herbs and spices in Europe can be roughly forecasted to increase by an average rate of 3%–5% per year in the coming years.

Expected increases are based on the ongoing growing demand for natural ingredients over artificial flavours, which has been the major driver of growing import values since at least 2012. Forecasted demand is also based on the trend that a growing number of consumers are interested in home cooking and experimenting with different world cuisines. At the same time, the average growth of the total market can be harmed by negative market developments for single spices. For the coming years, this risk will most likely come from vanilla, whose prices rose sky-high in previous years and will most likely not hold.

Between 2015 and 2017, European import values of herbs and spices grew every year by 11% on average to a value of €2.7 billion in 2017. Import values dropped considerably in 2018 (-8.1%) and also registered a small decline in 2019 (-1.6%). However, for the entire 2015–2019 period, the compound annual growth rate was slightly positive (0.4%).

The increase in import value between 2015 and 2017 is a bit misleading because it was mostly caused by the overheating of the vanilla and pepper markets since 2012.

Overall, the price hike of vanilla between 2012 and 2017 lowered the development of import volumes in relation to value growth. Still, import volume growth figures are definitely positive: 18% in 2016, 3% in 2017, and after a stable 2018, another 4.4% in 2019.

Developing countries play a key role in supply

European countries do not have suitable agroclimatic conditions to cultivate most herbs and spices, so they depend heavily on imports from tropical and semi-tropical countries. Only some specific herbs and spices are produced in Europe, mainly in eastern but also in some southern European countries. Romania, Hungary, Bulgaria and Spain are the leading producers within Europe, most notably because of their production of dried paprika and chillies (fruits of the genus capsicum), but these countries also produce some other spices.

Dried herb production also takes place in Europe, most notably in France, Italy and Greece. Parsley is the most popular dried herb, but European production also includes basil, bay leaves, celery leaves, chives, coriander, dill tips, chervil, fennel, juniper, marjoram, oregano, rosemary, sage, savoury, tarragon and thyme.

European imports from developing countries peaked in 2017 at a value of €1.4 billion. 2018 was the first year with a decline in aggregate import values since the natural vanilla hype in 2011/12. The reason was basically twofold:

  • Vanilla import value growth went down to only +5.7% in 2018 because of an improved balance between demand and supply;
  • The import value of unprocessed pepper went down strongly after the price peaks due to supply scarcity in the years 2015/2016 (-19% in 2017, -31% in 2018). Import volumes continued to increase in these years, leading to an average import price drop of -30%.

The table below provides the yearly growth of import values for the top-10 herbs and spices (per 6-digit HS codes) in the 2015–2019 period. The table shows that the product with the highest import values in previous years, vanilla beans, stopped growing in double digits in 2018. Vanilla bean prices even declined sharply in 2019, resulting in decreasing import values for that year (-28%). The main contribution to growth came from a range of spices, including processed ginger and cardamom. Most striking still is the fact that processed vanilla experienced a strong decline, resulting in the product losing its first position to processed pepper.

Table 1: Average annual value growth of European spice imports from developing countries, between 2015 and 2019, and share of total imports in 2019.

 

Average annual value growth
(in percentage points)

 

 

 

 

2016

2017

2018

2019

Value

2019

€ million

Share of total imports 2019

Import share from developing countries

Herbs and spices

 

 

 

 

2,473

 

 

Unprocessed

 

 

 

 

1676

68%

 

Vanilla

84

45

5

-22

359

14.5%

87%

Other herbs and spices

12

4

2

7

269

10.9%

31%

Pepper

-4

-23

-39

-12

257

10.4%

82%

Ginger

-10

26

6

15

238

9.6%

79%

Chilies and paprika

2

4

-12

17

150

6.1%

84%

Saffron

6

-2

-28

-5

72

2.9%

58%

Juniper berries and seeds of anise, badian, caraway or fennel

7

5

-1

7

60

2.4%

65%

Curcuma

32

17

-3

9

56

2.3%

77%

Cardamoms

8

33

24

47

48

1.9%

91%

Cinnamon and cinnamon-tree flowers excluding Cinnamomum zeylanicum Blume

-1

54

22

-5

33

1.3%

85%

Cumin

6

12

-25

2

35

1.4%

86%

Nutmeg

-4

-10

-20

7

26

1.1%

81%

Cinnamon ‘Cinnamomum zeylanicum Blume’

-2

17

18

-6

26

1.1%

83%

Cloves

-15

-6

6

-10

23

0.9%

77%

Coriander

-15

-14

-6

5

16

0.6%

60%

Mace

-4

-6

-4

24

8

0.3%

95%

Processed

 

 

 

 

799

32%

 

Mixtures of spices

6

4

-1

0

218

8.8%

15%

Chilies and paprika

5

5

4

7

211

8.5%

42%

Pepper

-2

-15

-30

-10

133

5.4%

40%

Vanilla

56

53

37

-5

53

2.1%

47%

Cinnamon and cinnamon-tree flowers

10

26

22

1

46

1.9%

53%

Ginger

17

-6

-1

11

39

1.6%

68%

Nutmeg

-16

-1

-12

-3

29

1.2%

63%

Cumin

21

8

10

3

20

0.8%

57%

Juniper berries and seeds of anise, badian, caraway or fennel

3

11

12

8

12

0.5%

30%

Mace

-7

-14

-8

69

11

0.4%

75%

Cardamoms

16

24

40

53

11

0.4%

36%

Coriander

-1

11

5

10

11

0.4%

55%

Cloves

2

-11

11

6

5

0.2%

40%

Source: Eurostat (2020)

Imports from developing countries are expected to grow moderately in the coming years. Import values may fluctuate under the influence of produced volumes of expensive spices (like vanilla in 2015–2017), or spices produced in big volumes (like pepper in 2016–2018).

Pandemic influence on consumption of immunity boosting spices

The Covid-19 pandemic has not clearly had a large impact on the total consumption of most categories of imported herbs and spices. However, several spices that are promoted for their immunity support functions had much larger growth rates in 2020. The three most promoted and in-demand spices were ginger, curcuma and garlic.

European imports of ginger increased in 2019, a trend that continued strong in 2020. It is important to note that European consumers prefer fresh ginger over dried ginger. Imports of curcuma in the first half of 2020 were approximately 20% larger than in the same period in 2019. Finally, garlic imports were 24 thousand tonnes larger between January and July 2020 than in the same months of 2019. Similarly to ginger, consumers prefer fresh garlic compared to dried. Plus, the use of garlic oil in food supplements is increasing.

Trade of a few other spices might have also benefited from the Covid-19 pandemic, such as cinnamon, which is typically used in home baking. in several countries, home baking became very popular during lockdown periods. On the other hand, lockdowns around the holiday season may have had a negative impact on sales of cinnamon, which is a common spice in typical Christmas recipes, and dinner parties and other holiday celebrations were possibly smaller this time around.

Another impact of the pandemic is yet to be measured on how the market is structured. While there might have been a positive growth in at-home herbs and spices consumption, at the same time there has obviously been a considerable reduction in use in the food service sector.

Tip:

  • Read more about Covid-19 and its influence on sourcing and consumption of spices in the CBI Trends study.

China takes first place from Madagascar

In terms of value, Madagascar was the largest supplier of herbs and spices to the EU market in the 2015–2018 period, followed by China at quite some distance. However, Madagascar’s exports faced a steep decline in value in 2019 because of the sharp drop in vanilla prices. Madagascar exports’ high value is based on the fact that vanilla is an expensive spice, but in terms of volume, Madagascar is only a small to medium-sized exporting country.

A closer look at supply from developing countries shows a changing picture in the last 10 years. Most striking is that before 2012, Madagascar did not hold an impressive stake of European imports. At that time, natural vanilla had been replaced by artificial flavourings to a large extent. The leading suppliers to Europe were Vietnam, China, Iran (for its saffron), India and Indonesia, while Peru was not even in the top seven yet.

Tips:

2. Which European markets offer the most opportunities for Spices and Herbs?

The markets in Europe that provide the most opportunities for exporters from developing countries are Germany, Netherlands, France, Spain, United Kingdom, and Poland. As Europe’s largest importer of herbs and spices, Germany is an interesting focus market. France and the Netherlands are other promising leading markets with relatively large shares of imports from developing countries. The UK and Spain are other important markets with substantial values of imports from developing countries.

Germany has the largest spice market in Europe

Germany is Europe’s largest importer of herbs and spices by a long way, with an import value of €496 million in 2019, which is equivalent to 20% of total EU imports. More than 60% of these German imports come from developing countries (€299 million). Madagascar is Germany’s largest supplier, which indicates that Germany is an important buyer of vanilla from Madagascar. Among Germany’s largest suppliers of herbs and spices, after Madagascar, follow China, Indonesia, Brazil and Vietnam.

Germany is one of the leaders in the global spice trade. The port of Hamburg has world-class facilities for the transport and storage of spices. Germany is also the home base of some of the world’s largest food processors, which generate a strong demand for herbs and spices. Large spice companies doing grinding, packing and other processing, such as Fuchs and Ubena have a strong presence in the German market and often import spices directly from developing countries. Other large general food processing companies, like Nestlé, Kraft Foods and Hela, which also have significant presence in Germany, have also switched to direct imports from developing countries in the past decade, but they still tend to depend on dedicated spice traders for their supplies to a large extent. These companies contribute to making the food and beverage industry the fourth-largest industry sector in Germany.

Last but not least, the German organic market is the largest and one of the most developed in the EU. German consumers and the German food industry are increasingly concerned with health and sustainability.

Tips:

Netherlands’ tradition still dominant in EU trade

The Netherlands is a traditional leading spice trader from developing countries. In the last decade, the country ranked either second or third on the list of leading importers. Dutch spice imports from developing countries reached €237 million in 2019. China is by far the largest supplier of herbs and spices to the Netherlands, followed by Indonesia and Vietnam. The leading supplier from within Europe is Germany.

Being a large spice trader, the Netherlands acts as an entry point into the EU market. Silvo (part of the McCormick group), Verstegen and Euroma are among the top players in the Dutch spice market. These companies import spices directly from developing country suppliers. Other important Dutch traders include Royal Polak, Catz, and Ned Spice. Among these Dutch traders are companies that are pure spice specialists (such as Ned Spice), companies with a focus on a single spice (such as Royal Polak with cinnamon), or companies that trade a wider range of ingredients (such as Catz, also trading nuts).

France: Europe’s vanilla hub

France is an important importing country in European spice trade, in particular because it is the largest European destination for vanilla from Madagascar. Thanks to this particular fact, France reached second place as spice importer in Europe in 2018. The following year, however, French imports declined considerably in value because vanilla prices dropped sharply. While Madagascar remained the leading supplier to France in 2019 (€164 million), other top suppliers to the French market include Germany (€33 million), Spain (€22 million) and Indonesia (€13 million).

In spite of Madagascar’s dominating position, other supplying countries have also found a market for their vanilla in France. The most important examples are Papua New Guinea, Indonesia and Uganda. Since France dominates the global vanilla market, it is also a source of trends and innovations, such as organic and fair-trade vanilla. The French market is characterised by the presence of a relatively large number of small and medium-scale companies, which makes the role of traders significant. Many of these traders specialise in vanilla, like Prova and Le Monde de la Vanille, while others trade in spices at large, like Ducros and Spigol.

Spain focuses on capsicum

Spain is different from the other top European spice importing countries because it has a very low 18% share of imports from within Europe. Spain’s portfolio of imported herbs and spices is also different from other countries. The most imported product is capsicum from China and (far behind) Peru, which is used in Spain’s paprika processing industry. Spain is the largest paprika producer and processor in the world, including many dried paprika derivates that are widely used as a colouring and flavouring agent in food preparations.

Saffron is the second most relevant product among Spanish spice imports, used by food processors in yellow colouring agents, but also as a central ingredient in the typical Spanish dish paella and many other culturally important rice recipes. Other spices also imported in significant volumes by Spain include pepper, ginger, cinnamon and cumin.

United Kingdom goes for Indian spices

The UK is different from Germany, the Netherlands, and France, in that UK spice imports are predominantly destined for the local market and re‑exports are small.

The UK is the leading market for curcuma in Europe, possibly because of its large South Asian population. Turmeric is an important ingredient in many Indian dishes, and particularly in curry powder (a British blend of spices popular in Western countries created to imitate and combine Indian flavours). Taking into account the enormous population of South Asian decent in the UK and its influence in British life and food since least the early 1800s, it is natural for the UK to have the largest market for curcuma, turmeric and curry powder in the EU.

The number-one spice imported by the United Kingdom is capsicum or paprika powder, followed by pepper and ginger. After those, come curry spice mixes and the popular Indian spices curcuma and cardamoms.

Because of the important role of Indian cuisine in the United Kingdom, it is not a surprise that India dominates the supply of spices to the United Kingdom (€57 million in 2019). China comes in second (€32 million), then Spain and the Netherlands (€29 and 28 million respectively). Other important suppliers to the UK are Vietnam €21 million), France (€19 million), and Germany (€16 million).

The British market for spices is characterised by the presence of large-scale players, such as Schwartz (part of Mc Cormick), British Pepper & Spice and Natco Foods. These companies account for a large market share, controlling the trade, processing, packing and marketing of a wide range of spices in the United Kingdom. There are not many small and medium-sized spice traders in the United Kingdom, such as Quay Ingredients and Rye Spice. Suma is also an interesting company, which specialises in distribution of vegetarian, vegan, fair-trade, organic, gluten-free ethical or natural products, including spices.

Poland the leader in Eastern Europe

Poland is the sixth-largest European importing country of herbs and spices. Imports from developing countries represent about 60% of total Polish spice imports (€61 million). By far the largest supplying country is Vietnam, sending €18 million worth of spice exports to Poland. Madagascar is second because of vanilla exports, with a value of €9.8 million in 2019. China only comes third with €7.4 million. This relatively low ranking for China comes from Poland’s relatively low consumption of ginger. Polish spice imports are carried out by Polish traders, such as Rolmex and TomPol, but also by production facilities of German spice manufacturers in Poland, most notably AVO.

Medium and small-volume importing countries

Three countries in the European Union can be considered as medium-sized importers: Italy, Sweden, and Belgium. Italy’s imports from developing countries reached €34 million in 2019, followed by Sweden (€24 million), and Belgium (€20 million). Their imports from developing countries declined between -10% and ‑16% per year on average in the 2015–2019 period, but absolute import values are solid enough to justify focusing on one of these countries.

Tips:

  • Study your options in the large import markets of Germany, France, Netherlands, UK and Spain. A good way to make up your mind about these markets is to visit European trade fairs. Start with the leading trade fairs in Europe: Anuga in Cologne (Germany), Sial in Paris, and Biofach in Nuremberg (Germany). Another fair that might also yield potential trading partners is Fi Europe, which is dedicated to food ingredients.
  • Take part in the online initiatives that trade event organisers have put forward during the Covid-19 crisis, such as the matchmaking platform Fi Connect, and the events SIAL Insights and ANUGA Horizon 2050.
  • Find more information about the British spice market on the website of The Seasoning and Spice Association.

3. Which herbs and spices from developing countries have most potential in the European market?

The products from developing countries with the most potential in the European market are ginger, unprocessed black and white pepper, dried capsicum or pimenta, and curcuma. This is based on the assumption that the strong performance of these products since 2014 will continue in the coming years, partly because these spices are thought to contribute to healthy lifestyles.

The same is true for processed cinnamon and cloves, which are traded in lower volumes, but have good potential.

It must be noted that there are many spices that provide opportunities for developing country suppliers, simply because Europe depends on imports. Additionally, the number of supplying countries for certain spices and their quality levels may be too restricted for certain European buyers who are thus open to new options that could mitigate supply risks. Although several countries are important suppliers of herbs and spices, most individual countries supply only a limited range of products.

In order to learn more about other products, please check the annex to this study.

Ginger

Ginger imports from developing countries totalled more than 130 thousand tonnes in 2019, roughly 40 thousand tonnes more than in 2015. China dominates the supply of ginger to Europe, followed by Brazil, Nigeria, Peru India, Thailand, Vietnam and Pakistan.

The most interesting markets are the top-three markets in Europe: Netherlands, United Kingdom and Germany. These countries import huge volumes of ginger from developing countries, which makes them good focus markets. In addition, Italy and Spain could also be interesting for reasons of size and direct imports from developing countries.

Pepper

Vietnam is Europe’s main supplier of pepper, followed by Brazil, Indonesia and India. The supply of pepper to Europe is quite diversified; for instance, the seventh-largest supplier accounts for just 1% of the total supplies. While China is an important player for ginger and capsicum, it only represents 1% of the European pepper market.

Capsicum

China is an important supplier of herbs and spices to the European market in general, but Chinese dominance is more evident in capsicum, taking 70% of the total European imports of capsicum. The leading destination is Spain, followed by Germany in a distant second.

Curcuma

European demand for spices has been growing for years, partly because of the trend towards healthier eating habits, which incudes curcuma. The main European market for curcuma longa by a large margin is now and is expected to remain the UK, where millions of people have a South Asian background and more than two centuries of cultural exchanges have placed curcuma as a primary food ingredient. India is the leading supplier of curcuma to the European market: 87% of all curcuma imports to the EU comes from India, followed by Peru with just 6%.

Fast-growing demand for organic herbs and spices

The next decade is expected to be marked by impressive growth in organic herbs and spices, along with the fast-growing organic food trend. Another important driver is the growing attention for medicinal properties of spices, especially those produced under organic certification. The largest growth are expected in western and northern European countries, led by Germany and Switzerland. Meanwhile, conventional products already under increasingly stricter requirements, such as Europe’s maximum residue levels legislation, are expected to continue to be targeted for even lower levels of contamination for the sake of mitigating food safety risks.

Statistics for organic herbs and spices are scarce, but the most traded herbs and spices — chilies, capsicums, ginger, garlic, and curcuma — are also assumed to be the most relevant in the organic market segment.

Tips:

  • Read the CBI’s trends report for a summary of trends in the European herbs and spices market.
  • Learn more about various products with potential on the CBI’s product factsheets (under ‘Promising export products’).
  • Review the full list of herbs and spices from developing countries in the annex to this study.

This study has been carried out on behalf of CBI by Autentika Global and ICI Business.

Please review our market information disclaimer.

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