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Pasta Sauce, Hot Sauce, & Specialty Food Market Research

• Hello, We're looking for a comprehensive research of the specialty food (ethnic) industry in the United States. We're in the process of developing a business plan for a new specialty food company that will focus on making specialty food pasta sauces and hot sauces. We need market/industry data on the specialty food industry as a whole (with segment breakdowns) as well as data for the pasta sauce and hot sauce markets since these two will be the initial products. - We need to know major players in the industry, web addresses, revenues, total market value, growth strategies, competitive factors (what are they good at - distribution? new product development and research? or advertising?), what are their resources? - Also, we need information on specialty food market trends. We know the specialty food industry is currently a trend in of itself since people are moving over to try different food concepts from different cultures, etc. but what is the trend in this trend? If possible, we will like to have a break of country/regions etc. that their food make up the market. - We will like to know the relevant market - how big is the hot sauce market? ==> then how big is the specialty food (ethnic) hot sauce market?. Also, what stage is the market in its product lifecycle? - What are the key competitive factors within the industry? Any barriers to entry? - What is the selling process like? How does the product reach the consumer? What is the distribution channel like? How do players in each distribution channel profit? Who has the power in the distribution channel? Recommended distribution strategy? - What are the currently methods by which competitors promote their specialty pasta sauce and/or hot sauce in the market? What promotional/marketing strategies do they employ? - What does the consumer look like (age, sex, income levels, etc.)? Please reference industry trade publications, analyst reports, etc

• Answer:

  <Pasta sauce, hot sauce, & speciality food market. Speciality foods. In 2002 the US speciality food and drink market was valued at $53 billion in 2002, compared to $37 billion in 1997. (Source: US Going Ethnic. Meat News.com.) http://www.meatnews.com/index.cfm?fuseaction=article&artNum=5379 The National Restaurant Association found that the most popular ethnic cuisines are Mexican, Italian and Cantonese-Chinese. Cuisines gaining in popularity are Cajun/Creole, Indian, Thai and Vietnamese. (Source: Non-Traditional Ethnic Cuisines Gain in Popularity. Restaurant.org.) http://www.restaurant.org/pressroom/pressrelease.cfm?ID=126 According to this report, sales of ethnic foods are on the rise. Sales of private label Mexican foods increased 8.8 percent versus 7.6 percent for branded products. Sales figures for a range of ethnic foods (Mexican and Oriental products) are given in a table at the end of the article. (Source: Private Label Ethnic Products. Joanna Cosgrove. http://www.privatelabelbuyer.com/content.php?s=PB/2004/09&p=10 Trends. This report examines how products from the gourmet/speciality segments are likely to cross over to the mass market. (Source: Gourmet and Speciality Food Trends. Elizabeth Sloan.) http://www.ift.org/publications/docshop/ft_shop/07-04/07_04_pdfs/07-04-sloan.pdf The consumers. There are an estimated 50 million buyers of speciality foods. They are located in all regions of the country, particularly in the 21 largest metropolitan areas. According to the National Association for the Speciality Food Trade (NASFT) heavy buyers of speciality foods are affluent, educated consumers and aged late fifty to early sixty. 55% of consumers buy their gourmet foods in supermarkets rather than speciality stores although the heaviest buyers tend to frequent speciality food stores. Segments: Baked goods and cereal-based products. Sauces, dressings, vinegars and oils Cereals and pulses Meats Dairy products. Beverages Herbs and spices. Ethnic foods. (Source: Market Brief. The Speciality Food Market in the United States. June 2001. Department of Foreign Affairs and International Trade.) http://atn-riae.agr.ca/us/e3248.htm Sauces. This report gives details of the top flavours, flavour trends, sales trends and industry trends. Dressing and sauces are worth $9 billion. The 6 major growth categories are salad dressing, ketchup/barbecue/mustard, mayonnaise, dry seasoning, Mexican sauce and spaghetti/marinara. Sales of Hot Sauce in 2002 reached $66.41 million. (Source: Salad Dressing and Sauce Trends. The Association for Dressings & Sauces.) http://www.dressings-sauces.org/pressroom_trends.html ------------------------------------------------------- Pasta sauce market. The pasta sauce market is worth $1.5 million. The market has been relatively flat over the period 1997 to 2002, with an overall increase of 6.1%, which translates to a loss of 6.4%. The decline is a result of stiff competition, ?Italian food fatigue? and lack of product innovation. This report predicts a 6% decline in constant terms between 2002 and 2007. This report costs $3,000. (Source: Pasta Sauce Market ? US Report. Mintel International Group Ltd. Jan 1, 2003.) http://www.marketresearch.com/map/prod/856709.html According to IRI reports, jarred pasta sauce dollar sales fell 1.9 percent to $1.5 billion in 2003 and sales volume fell 3.6 percent. Performance of top brands. 1. Prego ? declined. 2. Classico ? 2.4 percent growth and private label growth of 1.8 percent. 3. Basic Ragu ? 4.2 percent growth. 4. Ragu Old World ? 7.2 percent loss 6. Ragu Chunky Garden Style ? 8.4 percent loss. 6. Hunts ? declined. 7. Five Brothers Bertolli Lucca - 15.9 percent growth to $78 million. 9. Barilla ? 10.5 percent growth to $61.9 million. 10. Ragu Hearty ? 8.9% loss. http://www.fmi.org/advantage/issues/062004/pdfs/pub/ItalianSivak.pdf New products. Unilever recently introduced Carb Options, low-carb versions of existing products including Ragu pasta sauce. Easy Mac microwave products. (Kraft Foods Inc.) ? On-the-Go Dinners, microwave-in-a-minute, pre-cooked pasta pouch dinners are set to be launched in 2005. The product is aimed at the ?ultra-convenience? market. It includes Deluxe Rotinin, Marinara and varieties of macaroni and cheese. Ragu Express (Unilever) was launched in 2003. This is a pouch pasta snack which cooks in under 4 minutes with the pouch doubling as a serving dish. Betty Crocker ? Complete Meals Lasagna Pasta Bake with Meat Sauce and Chicken Ferruccini Alfredo. FreshPrep Dinner Kits (Kraft) include Classic Italian Lasagna, Four Cheese Chicken Alfredo and Chicken Parmesan with Linguine flavours. Issues. Health issues are becoming more prevalent for consumers with particular attention paid to diabetes and obesity. Consumers are becoming more aware of high-sugar, simple carb food. Giant Eagle anticipates a rising demand for no additives, preservatives and hidden sweeteners. (Source: Diversification and authentication keeps Italina competitive in the ethnic foods marketplace. Cathy Sivak. Advantage. June/July 2004.) http://www.fmi.org/advantage/issues/062004/pdfs/pub/ItalianSivak.pdf -------------------------------------- Major players 1. Unilever (Ragu) 2003 sales - $53.67 billion. (Source: Hoover?s Online.) http://www.hoovers.com/unilever/--ID__41850--/free-co-factsheet.xhtml Sales of Ragu Express reached $20 million in 2002 (Choosing Sides. William A. Roberts, Jr. 1, January 2004. Prepared Foods.) http://www.preparedfoods.com/CDA/ArticleInformation/features/BNP__Features__Item/0,1231,117072,00.html Unilever - company website. http://www.unilever.com/home/ 2. Campbell?s Soup Co. (Prego) 2004 sales $7.1 billion. (Source: Hoover?s Online.) http://www.hoovers.com/campbell-soup/--ID__10287--/free-co-factsheet.xhtml Prego Italian sauces and Pace Mexican sauces have sales of about $450 million. http://66.102.9.104/search?q=cache:ro4tkAG2TbIJ:www.philly.com/mld/philly/business/7158851.htm+prego+sales+2003&hl=en Campbell?s - company website. http://www.campbellsoup.com/index.asp?cpovisq= Prego pasta sauce brand http://www.campbellsoup.com/prego.asp?cpovisq= 3. H.J. Heinz Co. (Classico) 2004 sales - $8.4 billion. (Source: Hoover?s Online.) http://www.hoovers.com/heinz/--ID__10693--/free-co-factsheet.xhtml Heinz ? company website. http://www.hoovers.com/heinz/--ID__10693--/free-co-factsheet.xhtml Classico brand ? 20 varieties. http://www.heinz.com/jsp/classico_f.jsp New product ? Classico Four Cheese Alfredo. http://www.heinz.com/jsp/classico_f.jsp 4. Nestle USA (Contadina, Buitoni) 2003 sales - $12 billion http://www.hoovers.com/nestl%c3%a9-usa/--ID__43903--/free-co-factsheet.xhtml Nestle ? company website. http://www.nestleusa.com/flash_home.asp Buitoni brand. http://www.buitoni.com/Index/Index.aspx 5. Kraft Foods, Inc. (Di Giorno) 2003 sales - $21 billion. (Source: Hoover?s Online.) http://www.hoovers.com/kraft-foods-north-america/--ID__55825--/free-co-factsheet.xhtml Kraft Foods ? company website. http://www.kraft.com/default.aspx ------------------------------------- Trends. According to Neil Fusco, owner of Cucina Antica Foods, Bedford Hills, N.Y. there is a trend to more expensive, high-quality sauces with more natural ingredients, better tomatoes, spices and less fillers for which people are willing to pay more. Cucina Antica?s top-selling Marinara accounts for 40 percent of sales and retails for $6.99 for 16 ounces. Some retailers believe that cross-merchandising helps retain and grow pasta sauce sales, while others say it moves better in a grocery setting. http://www.specialtyfood.com/do/news/ViewNewsArticle?id=1882 Reports. Market Research.Com has a number of reports on the Ethnic food market. http://www.marketresearch.com/browse.asp?categoryid=489&SID=61239311-305593645-294685986 -------------------------------------------------- -------------------------------------------------- Hot sauces. According to this report the market for hot sauces is estimated at $2 billion. (Source: The Retail Grocery Market in the U.S. Upper Midwest. December 1998. Department of Foreign Affairs and InternationalTrade (Canada). ) http://atn-riae.agr.ca/us/e2231.htm Last year sales of Hot, Chilli and Tabasco sauces reached $165 million. According to A.C. Nielsen for the 12 months ending Oct. 5, 2002, unit sales of Chilli Sauces were up 4.9 percent, Hot sauce up 5.6 percent, and Tabasco/Pepper Sauce up 10.3 percent. (Source: Flavor and fire mark the hottest chillies on the market. 23, November 2004. Sweatnspice.com.) http://sweatnspice.com/hotsauce-blog/ According to Eric Hintz, brand manager for Frank?s, they have historically targeted 18 to 49 year old adults but growth is coming from young males. The McIlhenny Company which produces Tabasco has 26.5 percent of the hot sauce market. Frank?s (Reckitt Benckiser) has 16.1 percent. (Source: Hot Sauces Are Battling It Out For Market Share. Stuart Elliott. New York Times. November 7, 2002.) http://www.nytimes.com/2002/11/07/business/media/07ADCO.html ---------------------------------------------- Companies. McIlhenny Company. Established 1868. The company has a market share of approximately 25%. It produces 450,000 bottles of Tabasco a day. The sauce is distributed in over 100 countries. 2001 sales - $150 million (estimated) 2000 sales - $150 million (estimated) 1999 sales - $150 million (estimated) 1998 sales - $120 million (estimated) (Source: Hoover?s Online.) http://www.hoovers.com/mcilhenny/--ID__55649--/free-co-factsheet.xhtml Reckitt Benckiser Inc. Makes French?s mustard, Worcestershire, barbecue and hot sauces. The company also makes cleaning and disinfectant products. 2003 sales - $1.8 billion 1 year sales growth 1.8% Employees 2,400 (Source: Hoover?s Online.) http://www.hoovers.com/reckitt-benckiser/--ID__43927--/free-co-factsheet.xhtml B&G Foods, Inc. Makes pickles, peppers and hot sauces under the B&G Red Devil and Trappey labels. 2003 sales - $328.4 million. 1 year sales growth ? 11.8% 2003 net income $15.2 million 1 year net income growth (0.5%) Employees 774. (Source: Hoover?s Online.) http://www.hoovers.com/b&g-foods/--ID__60245--/free-co-factsheet.xhtml ---------------------------------------- Bruce Foods Corporation. Established 1928. Produces the top selling Original Louisiana Hot Sauce. (Source: Hoover?s Online.) http://www.hoovers.com/bruce-foods/--ID__103494--/free-co-factsheet.xhtml McCormick & Company, Incorporated. The world?s number one spice maker. Makes spices, seasonings, flavourings, sauces and extracts. 2003 sales $2.269 billion. 1 year sales growth (2.2%) 2003 net income $2.1 billion 1 year net income growth 17.2% Employees 8,000. (Source: Hoover?s online.) http://www.hoovers.com/mccormick/--ID__14057--/free-co-factsheet.xhtml -------------------------------------------- Distribution. Trade shows. The National Association for the Speciality Food Trade. 2,100 members including manufacturers, importers, distributors, brokers, retailers, restaurateurs, caterers and other businesses in the speciality food business. They organise three trade shows annually. They also publish Speciality Food Magazine. http://www.specialtyfood.com/do/about/Organization National Fiery Foods & BBQ Show. An annual show held at the Albuquerque Convention Center, Albuquerque, New Mexico in March. http://www.fiery-foods.com/ffshow/ How d?Oni Enterprises, a new company put its products into stores all over the Country. This company gained recognition by entering contests. The winning of awards was a powerful selling tool. The company took part in trade shows. They also partnered with other companies to minimize shipping costs and gain entry into key markets. http://www.fiery-foods.com/zine-industry/kindergarten1.html Distribution Plus Inc is a company that specialises in distributing speciality foods. They represent over 10,000 different gourmet, organic and ethnic line items. Contact details: Distribution Plus, Inc. 825 Green Bay Road, Suite 200, Wilmette, IL 60091 Telephone 847 256 8289 Fax 847 256 8299 http://www.distribution-plus.com/about/about.asp Links to Food Wholesale Distributors. http://www.hoovers.com/food-wholesale-distributors/--HICID__1361--/free-ind-factsheet.xhtml This article looks at a start up company with a chip product. They made industry contacts throught trade shows. A marketing specialist was hired. 85% of sales are predicted to come from sales to gourmet shops and natural food stores. It is becoming more and more difficult to get placement in health food stores due to increased competition. According to Michael Schall, president of Guiltness Gournet, if you use the best distribution for this type of product, you run the risk of being a few items among 6,000 or 8,000 items handled by specialty or gourmet food distributors. Specialty distributors play a critical role in bringing new, specialty, niche-type products to retailers where smaller marketing budgets don't justify warehouse or direct distribution. http://www.inc.com/magazine/19990301/743.html> <Search strategy:> <"pasta sauce" market billion> <://www.google.com/search?hl=en&q=%22pasta+sauce%22+market+billion> <"pasta sauce" share percent> <://www.google.com/search?sourceid=navclient&ie=UTF-8&q=%22pasta+sauce%22+share+percent> <"hot sauce" billion market> <://www.google.com/search?hl=en&lr=&q=%22hot+sauce%22+billion+market> <hoover's online> <://www.google.com/search?hl=en&q=hoover%27s+online> <ragu sales 2003> <://www.google.com/search?q=ragu+sales+2003&hl=en&lr=&start=10&sa=N> <Hope this helps.>