Dips and Spreads Market Size, Share & COVID-19 Impact Analysis, By Type (Salsa, Mayonnaise, Cheese, and Others), By Distribution Channel (B2C and B2B), and Regional Forecast, 2022-2029

The global dips and spreads market size was valued at USD 85.6 billion in 2021. The market is projected to grow from USD 91.3 billion in 2022 to USD 132.2 billion by 2029, exhibiting a CAGR of 5.43% during the forecast period. Asia Pacific dominated the dips and spreads market with a market share of 40.63% in 2021.

The global COVID-19 pandemic has been unprecedented and staggering, with dips and spreads experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a growth of 12.62% in 2020 compared to 2019.

Dip is one of the commonly used condiments for various types of food such as appetizers, finger food, and other snack foods. Dips add texture and flavor to any food item such as dumplings, pita bread, seafood, chopped raw vegetables, cubed pieces of meat, crackers, fruits, tortilla chips, potato chips, and falafel. Spread is a food usually spread with a knife onto crackers, bread, and other similar foods and is added to dishes to enhance the texture or flavor of food. Most popular spreads include plant-derived spreads (jellies, hummus, and jams), honey, margarine, meat-based spreads such as pate, and yeast spreads (such as marmite and vegemite).

The flavor-driven, nutritious, and healthy dips and spreads have become majorly popular. This is due to a higher percentage of the under-45 age group consumers preferring to try different ingredients and flavors such as gochujang, chimichurri, peri peri, and others in a dip. Usually, dips were offered with fried salty snacks but the trends have moved far beyond unhealthy snacking to healthy snacks owing to increased consumer awareness about ethnic food.

COVID-19 IMPACT

Increased Demand in the Household Segment Positively Aided Market Growth

The COVID-19 pandemic forced countries across the globe to follow numerous measures to reduce the spread of the virus such as closure of non-essential businesses, closing internal state borders, and other measures to adhere to social distancing. These restrictions and regulations caused work, sports, travel, and tourism to halt. But, in contrast, the spreads dips market scenario proved to be different compared to other industries.

The pandemic changed consumers' eating preferences, resulting in consumers practicing healthy eating habits. The consumers were willing to try new tastes and flavors, thus, a rising preference for condiments and snacking products that are organic and natural, healthier, delicious, and nutritious led to an increased demand for the products. Further, the use of dips and spreads was also observed to be increasing in the household segment, as the preparation of food dishes from various cuisines at home was a new trend observed during COVID-19.

LATEST TRENDS

Increased Use of Exotic Condiments in Restaurants and Home Cooking to Augment Industry Growth

The primary trend observed in the market is the growing popularity of exotic condiments, including dips and spreads, in dining at restaurants and at home. The most used exotic dip at many fine-dining restaurants is salsa. Salsa serves as a salad dressing or side dish, attracting many customers. During the COVID lockdown restrictions, cooking at home was the trend observed in many countries and dips and spreads were used as side dishes for majority snacks. Thus, the product demand is increasing from the household segment. Hence, the growing use of these condiments is anticipated to drive market growth.

Besides this, the unrivaled flavors of these dips and spreads are expected to influence the market demand. Increased demand for these exotic condiments can be attributed to rapid urbanization and altered eating habits focused on eating healthy, nutritious, and more delicious foods. Owing to the COVID-19 pandemic, consumers' awareness about healthy diets has increased, and the demand for plant-based dips has significantly increased from the COVID-19 outbreak. According to the Plant Based Foods Association, Canada, sales of dips, spreads, and sauces shot up 53.7% in 2019 worldwide. Therefore, the growing use of exotic spreads from restaurants and at-home consumption is expected to positively impact the dips and spreads market growth in the coming years.

DRIVING FACTORS

Rising Popularity of Ethnic Cuisine Around the World to Foster the Demand for Condiments

Dips and spreads are prepared with different ingredients, such as black bean, tomato, white bean, jalapeno, mushroom, and others, playing a vital role in enhancing the dining and snacking experience as they are considered condiments or side dishes. Ethnic cuisine or ethnic food is the cuisine that originates from the culture and heritage of specific ethnic groups such as Mexican food, Chinese food, Italian food, and others. In addition, ethnic foods are considered ethnic outside their territories or countries.

For example, Japanese ethnic cuisine is seasoned with a combination of soy sauce, mirin, sake, and dashi. Tonkatsu is a deep-fried, breaded pork cutlet served with tonkatsu sauce. In Italian cuisine, there are different sauces for different food dishes. For pasta, Ragu alla Bolognese is one of the famous pasta sauces in Italy. Bolognese sauce is a meat-based sauce derived from Bologna, Italy and can be served with different forms of pasta and baked into lasagne. In the case of Chinese cuisine, sauces are used as condiments with food dishes and as ingredients in the preparation of food items. Nanpie is a sour and spicy Dai dipping sauce. Nanpie can taste different, either sour, salty, numb, bitter, numb, sweet, or spicy, depending on its recipe. It can also be used as a dip.

These innovations are likely to aid the global market positively. The potential of dips and spreads to make food more exotic and desirable is aiding the sales value in the global market.

According to the Simmons National Consumer Survey (NHCS) based on the U.S. census data, 191.14 million Americans used dips for vegetables and snacks in 2020. This is attributed to the fact that adding condiments is one of the most preferred options while preparing food dishes. It has also been proven that adding these products to food provides multiple health benefits enhancing the nutritious value of foods. The easy availability of dips and spreads products on offline and online platforms, such as hypermarkets, specialty stores, supermarkets, and others, will further propel the market growth. Rising social media advertising on platforms, such as YouTube, Facebook, Instagram, and others, has quickly increased the consumer base with efficient cost.

Rising Demand for Premium and Healthy Products Combined with High Shelf Life to Fuel the Market Growth

There are various dips and spreads, out of which some flavors require refrigeration for storage, and the rest can be stored at room temperature. For example, French onion dip requires refrigeration while tomato-based dips such as salsa do not require refrigeration. Salsa dips can be stored at room temperature until they are opened. In addition, introducing all-new flavors in the product category is likely to fuel their demand in the market, helping the market grow remarkably. However, the growing demand for premium dips and spreads, combined with the higher shelf life of these products, is expected to drive market growth.

The shelf life and nutritious quality are impacting buying decisions of consumers. Various flavored dips have higher demand only for their better storage ability and longer shelf life. The higher pressure processing technique has made it possible to consume dips worldwide by increasing their shelf life. This technology breaks down bacteria with minimal nutritional value and flavor loss.

RESTRAINING FACTORS

Higher Prices of Organic Dips and Spreads and their Lesser Adoption in Rural Areas to Hamper Market Growth

There are various price points for condiments and dips in the market. The taste enhancing and exotic ingredients of dips and spreads are available at higher costs. The rising input costs of raw materials and increasing packaging prices can lead to increasing end product prices and resultantly declining demand for various products. Several different ingredients are used for manufacturing numerous flavored products. Utilization of different ingredients in manufacturing flavored dips is the reason for fluctuations observed in the manufacturing costs. This is attributed to the fact that different ingredients have different costs, which is likely to hamper the market expansion.

Furthermore, the penetration of these exotic condiments is lesser in rural areas than in urban areas as exotic dips are costlier and population groups residing in rural areas cannot afford costly products in the daily food category. Also, the traditional lifestyle of consumers in rural areas does not require exotic dips and spreads. These reasons are attributed to the lesser adoption of these products in rural areas, which can hamper the expansion of the global market in untapped domestic markets.

SEGMENTATION

By Type Analysis

Cheese Segment to Record Significant Growth Owing to Maximum Use in Several Cuisines Worldwide

Based on type, the market is divided into salsa, mayonnaise, cheese, and others. The cheese segment holds maximum share in the global market. These products are made from different types of cheese, such as cheddar cheese, mozzarella cheese, parmigiana cheese, and others, as the base ingredient. Over the last few years, a wide array of cheese dips has made their place in the market such as cream cheese dips, hot cheese dip, garlic bread cheese dip, queso (Mexican cheese dip), three cheese spread, warm and cheesy crack dip, cheese curd dip, garlic herb tomato goat cheese dip, and others. These products are increasingly becoming popular as cheese has become an essential component of several cuisines worldwide, especially in Europe.

The growing demand and acceptance of western food is a key factor contributing to the major market share of the cheese segment. In addition, the rise in innovation in the preparation of cheese dips with different flavors and tastes is also helping to gain a considerable consumer base, resulting in making the market competitive.

For instance, in January 2019, Blue Moose added artisanal cheese dips and pesto in its portfolio. The artisanal cheese dips contain no colors, artificial flavors, or preservatives, making them unique in the dips and spreads category. These cheese dips are also kept fresh by utilizing the HPP technique, which offers products a shelf life of 100 days from production. Blue Moose's artisanal cheese dips category includes flavors such as Roasted Onion Dip, Green Chile Cheddar Dip, White Balsamic Fig Dip, Red Pepper Artichoke Cheddar Dip, Truffled Ricotta Dip, Spinach Artichoke Parmesan Dip, and Basil Pesto.

Due to the vast preference for cheese dips and spreads, several companies have come up with different variants of such products containing cheese. This is expected to play a significant role in boosting the market revenue.

By Distribution Channel Analysis

B2B Sales Channels to Lead the Market Due to Wide Availability of Products and Offers

By distribution channel, the market is divided into B2B and B2C. The B2B segment has the highest market share, which can be attributed to the sales of dips and spreads products to businesses, such as dining at hotels and restaurants, where the use of such products in various dishes has increased. In comparison, the purchase of these products directly by consumers is lesser than by businesses.

REGIONAL INSIGHTS

The market has been studied across Asia Pacific, South America, Europe, North America, and the Middle East & Africa.

The Asia Pacific region accounted for the highest global dips and spreads market share attributed to well-established restaurants and food & beverage industries in developing countries such as China, India, Japan, and Australia. This region's rapidly evolving food service industry has witnessed an increased product demand. The Asia Pacific region also has a significant market share due to the rising demand for wholesome and on-the-go snacks, as there is an increased demand for on-the-go snacks and foods. This has resulted in an increase in product demand in the region.

Moreover, the region of Asia Pacific is expected to progress at a significant CAGR due to the rising popularity of dips and spreads products in China and India. In April 2022, Marico Ltd., an Indian multinational consumer goods company, expanded into the condiments and spread category with the launch of Saffola Mayonnaise and Saffola Peanut Butter. The newly launched products are currently available on significant e-commerce platforms. Apart from this, yogurt-based spreads and dips signify the emergence of an all-new category in India's seasoning segment, which has gradually started witnessing a massive consumer demand.

• In April 2022, Greendot Health Foods Pvt Ltd.'s brand Cornitos expanded its product portfolio by launching a new range of dips, Avocado Pulp and Dip. This dip comes in two variants, Cornitos Avocado Pulp and Cornitos Classic Guacamole, which are imported from Mexico.

Usually, the term European or continental food refers to the cuisine from the western regions of Europe. Consumers in Europe are willing to eat small portions of different foods with side dishes such as dips and spreads, resulting in increasing product demand. This lifestyle in Europe has led to more emphasis on convenience foods and is the primary force behind the increased consumption of convenience foods. Various dips have been introduced to fulfill consumer demand for new tastes and flavors.

Popular dips in the Europe market are Greek red pepper feta dip, Tzatziki dip, Spinach-artichoke dip with feta, Cannellini bean dip, Mint fava bean dip, and Romesco dip. Europe contributes to a significant market share. Some of the significant manufacturers operating in Europe are Hot Sauce Harry, Frontera Foods, Desert Pepper Trading Company, and Arizona Spice Company. 

The Middle East & African cuisine mainly comprises regional cuisines of South Africa, the UAE, and the rest of the Middle East & Africa. One of the Middle Eastern cuisine's famous dips is hummus, a chickpea-based dip. Hummus is paired with pita bread or is consumed as a dip with vegetables. In addition, the abundant availability of fresh produce in supermarkets and hypermarkets has increased consumption of healthy food and salads, thereby leading to increased sales of dips, spreads, and sauces.

South American cuisine is a mix of North American, European, and indigenous cuisines. South America holds a remarkable market share, followed by the Middle East & Africa.

KEY INDUSTRY PLAYERS

Key Players Reinforce Product Innovation to Strengthen Market Position

Leading players in the market are increasingly emphasizing business expansion by expanding their product portfolio and widening their existing distribution network. They are focusing on initiating e-commerce sales channels owing to the ease and convenience of consumers for purchasing required food items. The companies are investing in starting their distribution of products through online mode, which is anticipated to increase their sales and revenue. In addition, they are taking steps to develop their marketing strategies, which will help to attract customers. Companies are taking initiatives toward innovating technological assets to meet growing consumer demands.

LIST OF KEY COMPANIES PROFILED:

• The Kraft Heinz Company (U.S.)


• Campbell Soup Company (U.S.)


• Greendot Health Foods Pvt Ltd (India)


• PepsiCo (Frito-Lay) (U.S.)


• McCormick and Company, Inc. (U.S.)


• Wingreens Farms Pvt Ltd (India)


• AVT Gavia Foods Pvt Ltd (India)


• Conagra Brands, Inc (U.S.)


• Sandridge Food Corporation (U.S.)


• Veeba Foods (India)


• Britannia Industries Limited (India)

KEY INDUSTRY DEVELOPMENTS:

• April 2022 - Sandridge Food Corporation released its unique, High-pressure Processing (HPP) system at its Ohio facility. This innovative technology helped Sandridge become one of the significant companies for good taste, food safety, and technology. This newly installed technique provided minimally processed foods with better texture, appearance, nutritional value, and taste. This revolutionary change moved Sandridge even more closely to its goal of "bacteria-free" foods.


• February 2022 - Kraft Heinz partnered with Google to speed up and scale digital transformation and sustainable innovation agenda. The partnership was aimed at strengthening Kraft Heinz's focus on its consumers and providing them the required products and experiences. This partnership benefited the company in analyzing the current market trends and focusing on new product development, strengthening consumer relationships and engagement.


• November 2020 - McCormick and Company acquired the parent company of Cholula hot sauce, a hot sauce brand based in Mexico. The acquisition of Cholula hot sauce proved to be a strong addition to McCormick's global branded flavor portfolio. It has benefitted McCormick and Company to expand its offering in the growing hot sauce category to food service operators and consumers.


• November 2020 - McCormick and Company completed the USD 800M acquisition of The Cholula Food Company Inc. from private equity firm L Catterton Partners. The acquisition is expected to help the company further increase its market reach, thereby increasing the consumer base. This acquisition also can help McCormick and Company to reduce the competitive threats and become economically strong, thereby achieving a more significant market share.


• May 2020- PepsiCo launched new D2C (Direct-to-Consumer) offerings for providing food and beverage products for meeting the escalated demand amid the COVID-19 pandemic. The company launched two websites, PantryShop.com and Snacks.com, as during those uncertain times, maximum consumers were using e-commerce channels to purchase food and beverage products.

REPORT COVERAGE

The research report analyzes the market in-depth and highlights crucial aspects such as prominent companies, competitive landscape, product types, categories, and distribution channels. Besides this, the report provides an insight into the market trends and highlights significant industry developments. In addition to the aspects mentioned earlier, the report encompasses several factors contributing to the market growth.

REPORT SCOPE & SEGMENTATION