Exploring the Spice Route in India: Market & Segments

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Spices, food additives that enhance taste, aroma, color, and texture to our food, are an integral component of virtually all recipes in all cultures. And they have medicinal value too, aside from adding flavor to food.

India, known as the hub of spices, is the largest producer, consumer and exporter of spices and spice products in the world. The country produces about 75 of the 109 varieties of spices that are listed by ISO. The most produced and exported spices include pepper, cardamom, chilli, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, garlic, nutmeg & mace, curry powder, spice oils and oleoresins.

The production of different spices in India has been growing rapidly over the last few years. Production in 2021-22 stood at 10.87 million tonnes. In terms of production volume, chilli, garlic, ginger and turmeric constitute 75% of the total spice production.

The largest spices-producing states in India are Madhya Pradesh, Rajasthan, Gujarat, Andhra Pradesh, Telangana, Karnataka, Maharashtra, Assam, Orissa, Uttar Pradesh, West Bengal, Tamil Nadu and Kerala. The southern region of the country plays a significant role in the spices market. It is not only the largest market but also its average monthly per capita consumption is the highest among all regions.

For instance, spice manufacturer, Devdutt Exports Bharat Pvt. Ltd, with a rich legacy spanning 90 years, sells its spices under the brand name Minar Spices holds key markets in the southern States of India, in different regions like Hyderabad, Telangana, Maharashtra, Chennai, Tamil Nadu, Pondicherry, among other locations. The brand’s spices are supplied to leading hotels, restaurants, cafes, and catering companies. Minar Spices has also incorporated functional ingredients known for their health benefits. This includes superfoods, adaptogens, and natural antioxidants to provide added nutritional value.

The spice market in India reached Rs. 67,500 crore in 2020 and is expected to cross Rs. 1 lakh crore by 2025. Within this, the organized spices market accounted for Rs. 24,000 crore or 24% of the total share in the year 2020. This is expected to touch Rs. 50,000 crore or 50% of the market share by 2025.

Branded spices constitute 35% of the overall spices market in the country currently. The total spices market, including both packaged and loose currently stands at Rs. 70,000 crore.

According to new research from Mintel, the spice market in India is dominated by the unorganized sector, with 56% of Indians stating that they currently purchase unpackaged single spices and 44% purchasing unpackaged masala mixes. However, factors such as convenience, competitive pricing and rapid urbanisation are propelling consumers towards the packaged format of spices and masala mixes.

The growing utilization of spices in processed and ready-to-eat food products is further driving the market growth in the country. The expanding HoReCa sector in India is also bolstering the market growth. Moreover, the increasing penetration of western food trends is further catalyzing the demand for a variety of newer spices.

Furthermore, the rising consumer concerns towards the negative health impact of synthetic additives in spices are augmenting the demand for natural and organic spices in the country. The Indian government has introduced stringent regulations to curb the adulteration of spices, thereby inducing the production of safer product variants.

While the market as a whole in India is experiencing growth, certain segments are growing faster than others. Here are some segments that are witnessing notable growth:

1. Organic Spices: Consumers are increasingly opting for organic spices due to health and environmental concerns, leading to a surge in organic spice production and consumption.

2. Value-Added & Processed Spices: These are in high demand and include prepackaged spice blends, ground spices, spice powders, and ready-to-use spice mixes. They cater to consumers seeking quick and easy cooking solutions, especially in urban areas.

3. Branded & Packaged Spices: Consumers – particularly in urban markets – increasingly prefer standardized, hygienically packaged spices from trusted brands which are convenient, are of consistent quality, and have a better shelf life.

4. Spice Extracts & Essential Oils: These products find applications in various industries, including food and beverages, pharmaceuticals, cosmetics, and aromatherapy. The demand for natural flavors, fragrances, and herbal remedies is driving the growth of this segment.

5. Export of Value-Added Spices: India’s export market for value-added spices – which includes products like spice mixes, spice pastes, and dehydrated spices – is growing faster than the overall spices export market.