Executive Summary

The UK sauces and spreads market comprises three main sectors: meal enhancers, cooking sauces, and sweet and savoury spreads. Sauces and spreads represent a well-established grocery sector, with total retail sales of around £1.21bn in 1999, which accounted for around 2.5% of all consumer expenditure on food. Meal enhancers (including products such as table sauces, mayonnaise and salad dressing, pickles, chutneys and relishes, vinegar, condiment sauces, mustard and ingredient sauces) represent the largest sector, followed by cooking sauces, and sweet and savoury spreads.

Changing eating habits have seriously impacted upon the sauces and spreads market. The decline in traditional family meals has affected sales of table sauces and condiments, while consumption of sweet spreads has also been affected by the demise of afternoon tea and the traditional English breakfast, as consumers move towards more informal meals and snacking.

Growth in the sauces and spreads market has been mainly driven by increasing consumer demand for more convenience foods, especially wet cooking sauces, which have seen a dramatic increase in new product development (NPD) during 1999/2000. Health concerns have also stimulated demand for more organic products, while leading manufacturers have been revamping their core brands and introducing more premium and speciality products to attract younger consumers.

The repositioning of many sauces and spreads as cooking ingredients, as well as on-table accompaniments, has been a successful marketing strategy in boosting sales.

The UK sauces and spreads market is dominated by major multinational food companies, i.e. Unilever, Nestlé, Heinz, Campbell's and Groupe Danône, while there is a large multitude of specialist suppliers, mainly concentrating on niche markets such as ethnic cooking sauces and organic preserves.

1999/2000 has seen greater consolidation in the marketplace, with many leading manufacturers involved in major restructuring of their businesses and brands. The main corporate development has been the recent acquisition of the US food giant Bestfoods, by Unilever, for an estimated £16bn, making it one of the biggest takeover bids in the food industry in recent years.

The UK sauces and spreads market is forecast to grow by around 14.2% between 2000 and 2004, from £1.24bn to £1.42bn. The strongest growth will come from the cooking sauces sector, mainly due to the strong performance of the wet varieties. The meal enhancers sector is also predicted to see steady growth, while there will be a decline in the sweet and savoury spreads sector.

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