Spice consumption will stay strong as consumers accustomed to cooking during the pandemic keep making meals at home, and a summer spike in grilling has more people adding flavor to their meat, fish and vegetables, according to a top flavor executive. Greg Estep, managing director and CEO of Olam Food Ingredients’ (OFI) spices business, said the supplier of everything from garlic and onion to cinnamon and nutmeg has seen volume sales jump roughly 25% in the past year. For the most part, the division of agri-business firm Olam International has managed to avoid a predicted downturn in demand after shoppers stockpiled ingredients at home during the early months of the pandemic. OFI, which sells its spices to CPGs, restaurants and other ingredient suppliers, said it expects demand to eventually ease but remain well ahead of pre-pandemic levels where growth averaged about 5%.”Even though there might be some shifts as we come out post-COVID, our expectation is that growth will remain double digits,” Estep said. Another source of growth will come from restaurants that welcome more diners into their establishments as jurisdictions ease up on crowd-size restrictions and vaccinated consumers feel more comfortable eating out.The growth comes as consumer interest in discovering unique tastes grows. People have long looked to new flavors for a host of reasons, including the desire to eat better without sacrificing taste as well as an interest in experimenting and trying something new like an ethnic offering — trends that are unlikely to abate anytime soon.A Mintel study found 35% of U.S. consumers would be tempted to try a new dish if it had unique flavors or ingredients, and 80% of people like trying new seasonings, spices and flavors. ADM said last fall that nostalgic, comforting flavors will become mainstream options for many manufacturers.”We don’t believe it’s slowing down,” Estep said of the demand for new spices and other flavorings. “Those trends will help pick up consumption.”In a bid to increase its presence in America, OFI announced last month that it was acquiring U.S.-based private-label spices and seasonings maker Olde Thompson for $950 million. The deal combines OFI’s sourcing and supply chain strengths with a lucrative U.S. product market. The move marked a meaningful step in Olam’s transformation. Olam International, which is majority owned by Singapore’s state investment firm Temasek, started working to refocus its portfolio on ingredient products in high consumer demand in 2019. Lamultivit min ferrous fumaratest year, it announced it was splitting its business into two operating groups: OFI and Olam Global Agri, which deals with commodity crops and animal feed. Similar to a lot of businesses, OFI’s spice arm also has been increasing its online presence in recent years. While the fast-growing e-commerce segment makes up less than 5% of itsferrous fumarate normal dose business today, it has more than 300 active users, many of them new customers that the spice business acquired during the past year. “What’s been good about e-commerce is we’ve reached a lot of different customers that we weren’t really aware of,” Estep said.The web allowed Olam Spices to connect with smaller upstarts who may not have otherwise been able to connect with its sales force. An online presence allowed it to work with smaller restaurant operators who wanted direct access to its spices. Even cattle farmers have turned to OFI’s platform to purchase garlic, which is eaten by the farm animals and acts as a natural deterrent for pests — a customer addition that alternative to ferrous gluconatesurprised many people at the company. Despite these tailwinds, Estep said the spice business is experiencing many of the same challenges as other agriculture and food-related companies.A major hurdle is the rapid swings in moisture and temperature that have been tied to climate change. OFI’s onion and garlic operations in California benefit during the winter from colder weather events that help kill off diseases and pests. A trend toward warmer nights in recent years has curtailed how many get eradicated.As OFI monitors crop conditions throughout the year, the change in weather has prompted it to make small changes to its operations. Warmer temperatures have encouraged the ingredients supplier to shift some of its acreage in the Central Valley of California further north to near Sacramento. Another difficulty that many companies face is in their supply chains. Uncertainty has been further exacerbated by the pandemic and gridlock tied to a large ship that was stuck recently in the Suez Canal. OFI’s spices business partners with U.S. growers to raise much of its onion, chili peppers, paprika and garlic. Estep said having greater control allows it to more easily maintain quality and provide transparency to customers on how, when and where the ingredients were grown.But OFI is dependent upon producers around the world for other ingredients, such as black pepper, cinnamon, nutmeg, hot red chilies, and turmeric that come from countries like Vietnam, Indonesia and India. The company has employees on the ground in many of these countries and works directly ferrous sulfate 44 mg/5mlwith the farmer.Estep said in order to minimize the disruption as much as possible, Olam Spices is trying to grow the product itself or partner with suppliers in different parts of the world. The company is building up so-called safety stocks that it can tap into during a disruption so a customer doesn’t have to wait. Olam Spices also works closely with its foodservice, CPG and retail partners to determine if excess supply in one channel can shift to another where there is elevated dem500mg ferrous sulfateand.In some cases, the disruption and elevated demand has left retail shelves empty in certain stores and regions for spices like pepper, garlic and cinnamon. With demand remaining high among consumers and ongoing challenges tied to the supply chain, it could take six to nine months to fully replenish low stockpiles.”It is pretty fragile and it’s pretty complicated,” Estep said of the supply chain recently. “Unfortunately, just where the logistics have hit, it’s been hard to get out ahead of it.”
Spice use to remain robust after COVID-19 as trends buoy demand, Olam executive says
