U.S. Hot Sauce Market Size, Share & COVID-19 Impact Analysis, By Type (Tabasco pepper Sauce, Habanero pepper Sauce, Jalapeo Sauce, Sweet and Spicy Sauce, and Others) and By Distribution Channel (Mass Merchandisers, Specialist Retailers, Convenience Stores, Online Retail and Others), 2023-2030

The U.S. hot sauce market size was valued at USD 963.08 million in 2022. The market is projected to grow from USD 1,026.28 million in 2023 to USD 1,668.19 million by 2030, exhibiting a CAGR of 7.19% during the 2023-2030 period.

Consumption of fast foods and snacks is on the rise in U.S., especially among the urban population. As per a report published by the Centers for Disease Control and Prevention (CDC), 84.8 million consumers consume snacks and fast food regularly. Hot sauces are often used in culinary preparations and for complimenting snacks or fast foods as they add a fiery taste and enhance their flavor profile. Hence, the growth in demand for these products is expected to positively influence the market growth.

COVID-19 IMPACT  

Supply Chain Disruption Offsets the Hike in Hot Sauce Sales and Impact the Overall Market Growth 

The sales of sauces and condiments, especially these sauces, were stable during the COVID-19 pandemic. As consumers were locked in their homes and foodservice restaurants were closed or operating at half capacity, they switched to cooking food in the comfort of their homes. Hot sauces were widely used in households to add flavor and spiciness to meals. As they have a higher shelf-life, these products were hoarded by consumers in large amounts for future use, contributing to their increased sales. Furthermore, as health awareness increased among consumers, the demand for clean-label products increased during the period. For instance, McCormick & Company, which is the Cholula hot sauce manufacturer, emphasized using clean-label ingredients for manufacturing its sauces during and after the pandemic.

Although the demand for sauce was stable in the U.S. market, the supply chain disruption significantly affected the cost and availability of raw materials required for sauce production. Furthermore, after the government announced strict lockdown, several companies faced labor shortages and were forced to stop their operations in fear of infection spreading among workers. Therefore, the operations of small-scale hot sauce manufacturers and larger players were heavily affected during that period.   

LATEST TRENDS

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Adoption of Experimental Diets by the Consumers to Further Promote Hot Sauce Adoption among Consumers

Experimental dietary trends are on the rise in the U.S., with consumers opting for a wide range of diet regimes to reduce calorie intake, control obesity, and improve immunity. Vegan, keto, and flexitarian diets have become some of the most popular diets in the U.S. The growth in popularity of such diets prompts food manufacturers to develop condiments such as hot sauces, which can improve the dishes prepared under such diets. This creates the opportunity for the manufacturers to pursue new product development and effective product positioning in the market. For instance, family-owned company ‘The Back 40’ launched a keto-friendly hot sauce, “The Back 40 hot sauce”, for consumers in 2021.   

DRIVING FACTORS

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Favorable Government Initiatives to Fuel the U.S. Hot Sauce Market Growth

The U.S. government has tapped into the immense potential presented by the increased hot sauce consumption globally. The Federation of American Scientists, a non-profit research organization, is working with U.S. Ag exports and collaborating with sauce distribution partners and culinary schools to promote U.S.-made hot sauce in the global market. Some of the major countries with which the country is collaborating include Brazil, Japan, and Thailand. For instance, the USDA Agricultural Trade Office partnered with the Japan-based brand ‘Hot Sauce Bar’ to promote U.S. products at the annual Takatsuki Food Festival in October and the Kyoto USA Food Festival. Thus, the export of sauces increased from USD 25.4 million in 2020 to USD 30.3 million in 2021. As per a report published by the U.S. Department of Agriculture (USDA), exports of U.S. condiments and sauces increased by 67%, reaching USD 2 billion in 2021.

Rising Popularity of Hot Sauce among Millennials and Geriatric Population Alike to Promote Market Growth 

Hot sauces help improve the taste profile of these foods and help consumers enjoy a pleasant taste in their food. Young consumers prefer to experiment with their food, and add new flavor to their dishes. Furthermore, the geriatric population with compromised taste buds can also benefit from adding such sauces to their food. These sauces can help stimulate their taste buds and help them enjoy their food. As per data provided by the census bureau of the U.S., around 55 million people in the country are older than 65 years. The popularity of hot sauces has led to January 22 being celebrated as national hot sauce day every year.  

RESTRAINING FACTORS

Uneven Raw Material Production due to Global Weather Change to Significantly Impact Hot Sauce Production 

The global weather conditions are changing significantly, affecting the yield of raw materials required for hot sauce production. For instance, chili pepper is one of the major raw materials used for sauce production. On July 2020, crop failure due to bad weather conditions in Mexico, the major supplier of chilli used in hot sauce manufacturing in the U.S., caused Sriracha hot sauce manufacturer Huy Fong Foods to suffer from a raw material shortage. Hence, the availability of hot sauce in the market suffered due to a production shortage. Therefore, manufacturers are expanding their supplier base and identifying potential raw material suppliers from other regions to prevent such shortages in the future.

As per the data provided by FAOSTAT, the above graph depicts the decline in the production of chilli in 2020 compared to 2019 in Mexico. Mexico is one of the largest suppliers of chilies used by the U.S. hot sauce manufacturers.

SEGMENTATION

By Type Analysis

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Tabasco Pepper Sauce is the Leading Segment Owing to its Healthy Attributes and Better Food Adaptability 

Based on type, the market is classified into tabasco pepper sauce, habanero pepper sauce, jalapeno sauce, sweet and spicy sauce, and others.

Tabasco pepper sauce is widely enjoyed by consumers compared to other sauces. Classic dishes and drinks use Tabasco pepper to add flavor and spiciness to the food. The popularity of food dishes such as buffalo wings, salsa, and others is prompting consumers to adopt tabasco sauce to compliment the taste of such food items. Furthermore, it contains low amounts of sodium compared to other sauces and condiments available in the market. McIlhenny Company, the manufacturer of Tabasco sauce, enjoys significant popularity in the U.S. market.

Among other varieties, the Habanero pepper sauce is also growing in popularity in the U.S. Demand for ingredients such as Habanero pepper grown locally in tropical regions, is gaining significant popularity in the country. Several companies are launching new products to meet growing market demand. In 2021, the Rhode Island-based Woodstock hot sauce company launched a habanero pepper-based new hot sauce in the market.

By Distribution Channel Analysis

Mass Merchandizer Hold Maximum Share as it Provides Wider Product Options at Higher Discount Rates 

Based on distribution channel, the market is characterized as consisting of mass merchandisers, specialty retailers, convenience stores, online retailers, and others.

Among the different distribution channels, mass merchandisers segment accounts for a higher market share than others. Consumers' buying behavior is significantly impacted by product availability, product sizes, discounts and offers on the products, and other factors. Target, Sam's Club, and Best Buy are some of the mass merchandisers that provide a wide assortment of sauces in a single location at affordable rates.

Specialist retailers offer better product varieties than other distribution channels and are another major distribution channel in the U.S. market. Such stores provide consumers with premium quality, authentic products and also help consumers understand the product attributes. Such stores also help the manufacturers expand their community engagement and ensure repeat purchases and higher brand loyalty.

Online shopping of hot sauces has also gained rapid traction, especially after the pandemic disrupted the purchasing behavior of consumers. Some of these supermarket chains partnered with delivery partners like DoorDash and offered a service called “DoubleDash” that can deliver food and grocery orders at the same time. For instance, in 2021, Albertsons partnered with Door Dash to provide direct grocery delivery from grocery chains to consumers. The online channel is expected to undergo significant growth in the future.

KEY INDUSTRY PLAYERS

Key Players re Focusing on New Product Launches to Meet the Growing Consumer Needs

The market is highly competitive and has several major market players competing with small startups to expand their market share. Some of the major hot sauce manufacturers operating in the country include McIlhenny Company, The Kraft Heinz Company, McCormick & Company, Inc., and several other manufacturers. Manufacturers are launching a wide range of unique flavored hot sauces for different target segments, including millennials and the adult population. Some startups, such as Smokin’ Dave’s, Bibigo are also providing free samples to the consumers so they can try out the flavors before purchasing the product.

LIST OF KEY COMPANIES PROFILED:

• The Kraft Heinz Company (U.S.)


• McCormick & Company, Inc. (U.S.)


• Campbell Soup Company (U.S.)


• Unilever PLC (U.K.)


• Conagra Brands Inc. (U.S.)


• McIlhenny Company (U.S.)


• Southeastern Mills, Inc. (U.S.)


• Hormel Foods Corporation (U.S.)


• Baumer Foods, Inc. (U.S.)


• T.W. Garner Food Company (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• February 2023: TABSCO, a popular hot sauce brand of McIlhenny Company, launched a new hot sauce-based dressing named TABASCO Brand x TINX Avocado Jalapeño Hot Sauce Dressing, available for USD 9.99. Such partnerships help the company generate positive social media engagement and enable product innovation.


• January 2023: Mountain Dew, a soft drink manufacturer, partnered with a Houston-based hot sauce shop, namely iBurn, and introduced a limited edition hot sauce in the market named Mtn Dew Baja Blast. Such limited edition products help the company increase consumer engagement and ensure higher market penetration.


• November 2022: Custom printing company Sticker Mule, a U.S.-based company, expanded its product offerings and entered a new business by launching a hot sauce named Mule Sauce in the market. The company has an existing customer base and wants to build its sauce business in the Direct-to-Consumer (D2C) category.


• July 2022: Fat Chang Hot Sauces expanded its hot sauce product line by launching new products, namely Fat Chang’s Original Hot Sauce, Fat Chang’s Lost Warrior, and others. Such sauces help to provide a farm-to-table, small-batch hot sauce experience to consumers and allow them to enjoy high-quality, unique flavor products.  

REPORT COVERAGES

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The research report includes quantitative and qualitative insights into the market. It also offers a detailed analysis of the market size and growth rate for all possible market segments. Various key insights presented in the report are an overview of related markets, competitive landscape, recent industry developments such as mergers & acquisitions, the regulatory scenario in U.S., and key industry trends.

Report Scope & Segmentation