SUMMARY OF MARKET TRENDS AND HERBS CONSUMPTION IN THE UNITED STATES

Prepared by:
Peter Furth
FFF Associates, Inc.
October 2001

TABLE OF CONTENTS

SECTION I
SUMMARY OF GENERAL MARKET SITUATION AND TRENDS


SECTION II
HERB CONSUMPTION IN THE UNITED STATES - A REVIEW

APPENDIX
APPENDIX A Total US Spice Imports - 1981-2000
APPENDIX B Imports of Herbs - 2000
APPENDIX C US Sage Imports - 1998-2000
APPENDIX D US Sage Imports by Country of Origin - 2000
APPENDIX E US Basil Imports - 1998-2000
APPENDIX F US Basil Imports by Country of Origin - 2000
APPENDIX G US Oregano Imports - 1999-2000
APPENDIX H US Oregano Imports by Country of Origin - 2000

SECTION I
Summary of General Market Situation and Trends

General Market Trends

Spice consumption continues to grow at a healthy rate. In the United States, it has increased on a per capita basis (amount consumed per 1000 population) as well. This means that there has been a healthy compounded growth rate in the overall consumption of spices. According to the American Spice Trade Association (ASTA), per capita consumption has increased from approximately 1,000 kilos in 1980 to over 1,600 kilos today, an increase of 60 percent. However, one must be cautious when looking at this trend. Over the last twenty years, consumption of some spices has increased far more dramatically than others.

The top 10 spices are as follows:

Dehydrated Onion & Garlic
Mustard Seed
Red Peppers (except Paprika)
Sesame Seed
Black Pepper
Paprika
Cinnamon
Cumin Seed
White Pepper
Oregano

Some Specific Market Situations and Opportunities

Consolidation in both the spice industry has been occurring for the last ten to fifteen years and this trend continues. The number of buyers is shrinking as a result of mergers such as McCormick's recent acquisition of Ducros. In addition, the buyer's continue to become more scientifically sophisticated and specifications are constantly becoming stricter.

The demand for increased quality and sanitation continues to increase in the United States and Europe. Buyers of natural raw materials continue to demand greater consistency of product; proper harvesting, storage, processing, and transport; and sanitation and cleanliness levels that are often most difficult to meet on a consistent basis. However, it has been shown in many developing areas that meeting these needs is possible. While it takes a lot of hard work, effort, and often money to do so, the rewards for those who can seem to be great - in terms of increased market share, consistency of market share, and higher prices. This is an area where there is great room for improvement in all developing countries and, as such, represents a tremendous opportunity for those who are willing to undertake such efforts.

One other area remains of specific interest. For some time, there has been an increasing demand for organic spices and herbs - those that are grown without the use of synthetic pesticides, herbicides, or fertilizers. Over the last few decades, the growth in this demand has been exponential. The United Nation's International Trade Center reports that sales of organic foods rose more than 20 percent during the 1990's. This trend is expected to continue, with some industry experts predicting a 40 percent growth rate in certain European markets and a 20 percent growth rate in the United States. Exporters should make every effort to take advantage of this market trend. However, to do so will require much effort in the areas of education, quality control, and implementation of other control systems.

SECTION II

Herb Consumption in North America Herb consumption in the United States has grown significantly over the last twenty years. The following chart illustrates this:

In addition, the United States produces various herbs domestically, mostly in California. It is estimated that total domestic production of all herbs is now approximately 2,250 metric tons. There are no statistics available for each herb, however the estimated domestic production of herbs has been obtained from the American Spice Trade Association - ASTA).

A review of the overall imports of herbs into the United States in recent years shows that oregano is the largest in quantity and in dollar value by far. This is followed (in descending order based on quantity) by: basil, sage, laurel leaves, parsley, mint leaves, and thyme.

The situation for oregano is very good. Oregano imports have increased from approximately 2,800 tons in 1980 to just over 6,200 tons in 2000, an increase of 121 percent or twice the average. As a comparison, during the same period, imports of red peppers (capsicums) increased by over 300 percent; cinnamon increased by 102 percent; black pepper increased by 55 percent; and nutmeg actually decreased by 21 percent. Sage falls slightly ahead of average compared to overall consumption. Over the last twenty years, sage imports into the United States have increased from approximately 1,500 metric tons to approximately 2,500 metric tons. This is an increase of about 65 percent.

APPENDIX A


Some Notes: The U.S. as a nation is using a much greater tonnage of spices than it did only a few years ago U.S. per capita consumption is increasing as well.
APPENDIX B


APPENDIX C


APPENDIX D


Note: Based on Kilos
APPENDIX E


APPENDIX F


Note: Based on Kilos