Spice use to remain robust after COVID-19 as trends buoy demand | Food Dive

Spice consumption will stay strong as consumers accustomed to cooking during the pandemic keep making meals at home, and a summer spike in grilling has more people adding flavor to their meat, fish and vegetables, according to a top flavor executive. 

Greg Estep, managing director and CEO of Olam Food Ingredients’ (OFI) spices business, said the supplier of everything from garlic and onion to cinnamon and nutmeg has seen volume sales jump roughly 25% in the past year. For the most part, the division of agri-business firm Olam International has managed to avoid a predicted downturn in demand after shoppers stockpiled ingredients at home during the early months of the pandemic.

OFI, which sells its spices to CPGs, restaurants and other ingredient suppliers, said it expects demand to eventually ease but remain well ahead of pre-pandemic levels where growth averaged about 5%.

“Even though there might be some shifts as we come out post-COVID, our expectation is that growth will remain double digits,” Estep said.

Another source of growth will come from restaurants that welcome more diners into their establishments as jurisdictions ease up on crowd-size restrictions and vaccinated consumers feel more comfortable eating out.

The growth comes as consumer interest in discovering unique tastes grows. People have long looked to new flavors for a host of reasons, including the desire to eat better without sacrificing taste as well as an interest in experimenting and trying something new like an ethnic offering — trends that are unlikely to abate anytime soon.

A Mintel study found 35% of U.S. consumers would be tempted to try a new dish if it had unique flavors or ingredients, and 80% of people like trying new seasonings, spices and flavors. ADM said last fall that nostalgic, comforting flavors will become mainstream options for many manufacturers.

“We don’t believe it’s slowing down,” Estep said of the demand for new spices and other flavorings. “Those trends will help pick up consumption.”

In a bid to increase its presence in America, OFI announced last month that it was acquiring U.S.-based private-label spices and seasonings maker Olde Thompson for $950 million. The deal combines OFI’s sourcing and supply chain strengths with a lucrative U.S. product market.

The move marked a meaningful step in Olam’s transformation. Olam International, which is majority owned by Singapore’s state investment firm Temasek, started working to refocus its portfolio on ingredient products in high consumer demand in 2019. Last year, it announced it was splitting its business into two operating groups: OFI and Olam Global Agri, which deals with commodity crops and animal feed.

Similar to a lot of businesses, OFI’s spice arm also has been increasing its online presence in recent years. While the fast-growing e-commerce segment makes up less than 5% of its business today, it has more than 300 active users, many of them new customers that the spice business acquired during the past year.

“What’s been good about e-commerce is we’ve reached a lot of different customers that we weren’t really aware of,” Estep said.