---
title: "Condiment Industry: How to Create a Big Flavor of Profit?"
description: "In the first half of 2015, while growth in most food and beverage sub-sectors slowed to single digits, the condiment industry maintained double-digit growth, leading the food industry. With consumption upgrading, rising living standards, and an increasing share of dining out, the condiment industry has broad growth space. Currently, per capita spending on condiments in China accounts for only about 0.4% of total consumption expenditure, leaving more than double the development space compared to countries like Japan."
author: "小镇青年朱迪"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-04-13"
language: "en"
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# Condiment Industry: How to Create a Big Flavor of Profit?

> In the first half of 2015, while growth in most food and beverage sub-sectors slowed to single digits, the condiment industry maintained double-digit growth, leading the food industry. With consumption upgrading, rising living standards, and an increasing share of dining out, the condiment industry has broad growth space. Currently, per capita spending on condiments in China accounts for only about 0.4% of total consumption expenditure, leaving more than double the development space compared to countries like Japan.

Condiment Industry: The Flavor Keeps Getting Better
In the first half of 2015, while growth in most food and beverage sub-sectors slowed to single digits, the condiment industry maintained double-digit growth, leading the food industry. With consumption upgrading, rising living standards, and an increasing share of dining out, the condiment industry has broad growth space. Currently, per capita spending on condiments in China accounts for only about 0.4% of total consumption expenditure, leaving more than double the development space compared to countries like Japan.

1 What Opportunities Are There in Retail Channels?
Condiments play an important role in every Chinese household and restaurant, but for thousands of years, this category has always been like a supporting role, never in the spotlight. Even though factors such as the structuring of small families, increased dining out, and upgraded consumer demand have driven a surge in condiment product lines, it is undeniable that consumer purchasing behavior for household condiments still shows:

■ Kitchen necessities with low single-purchase price thresholds and long consumption cycles (especially for young small families). A bottle of soy sauce might last three months, and consumers often only think of buying it when it runs out. **This means condiment brands must have as many retail outlets as possible to ensure opportunities for consumer contact.**

■ Because traditional staples like oil, salt, soy sauce, and vinegar have always been perceived as cheap and inexpensive, manufacturers must respond to consumer demand trends by **expanding product lines, creating more usage occasions, innovative functions, or lifestyle experiences**. Fortunately, for younger consumers, price is not an issue, and the barrier to trying new products is low.

2 What Tactics Can Retail Terminals Adopt?
**1) Outlet Strategy**: Widespread, high-density distribution
Outlet **tactics**: Database management of regional outlet numbers/types/appropriate product SKUs, and estimated regional sales/growth potential. Only through predictable market growth can channel distributors be "forced" to upgrade their management thinking and methods.

**2) Visit Strategy**: Stable cycles, targeted visits with high order rates
Visit **tactics**: Rationalize visit routes, introduce more flexible salesperson cooperation models such as contracting or vehicle sales; besides taking orders, as SKU numbers increase, manufacturers and distributors must precisely grasp channel inventory levels and control sales rhythm, making salesperson visits more valuable.

**3) Display Strategy**: Diverse and active, multiple touchpoints, increase ARPU (average revenue per user)
Display **tactics**: Expand display areas for different SKUs, e.g., combining braised pork soy sauce/BBQ sauce with fresh meat sections; increase exposure on shelves, end caps, and promotional areas through different pack sizes; orderly arrangement of cut-case displays, tastings (cooking demonstrations), bundling, and gifts; for "star-quality" big products, make them the leaders in terminal demonstrations (maybe the next Lao Gan Ma or Haitian Braised Soy Sauce); all visual merchandising must be included in standard quantitative assessments and implemented on the ground.

Tactical Tips
**1** Rapidly expand outlets: Establish standards for new outlets, management sets scoring criteria for expansion and reviews, with rewards for qualified ones. Outlet expansion seeks incremental growth, but more importantly, values existing stock; only outlets with stable supply relationships are valuable.
**2** Align visit assessment standards with SKU increases: Master channel terminal store ledgers and query average SKU increases/decreases per store.
**3** Increased outlet types and complex order variables: Terminal outlet credit periods, credit sales, gifts, and exchanges require maintaining tactical flexibility while managing in real time.
**4** Money in and out, refined financial management: Track actual receipts, receivables, uncollected amounts, and credit sales in real time.
**5** Seasonal/periodic featured product reminders: Use sales analysis functions for comparison queries.
**6** Near-expiry product alerts: Handle returns (to achieve quick digestion of near-expiry products in different store types).
**7** Vehicle sales: Query performance by salesperson and adopt a commission model.
**8** Enterprises help distributors output professional management skills and assistance, reversing the traditional broker-style business management model prevalent in the condiment industry.

**In Summary**
The professional management requirements of modern retail channels versus the traditional backward management methods of distributors are the core issues currently constraining the rapid development of the condiment industry. While enterprises continue to improve in product R&D, production, and sales management, they must always drive their distributors to grow together, or seek distributors more suited to development trends. Only then can the "big flavor" of condiments be stimulated, driving the transformation and upgrading of the traditional industry and creating a tipping point for enterprises to reap big profits.

This article is original (some data cited from Guosen Securities Liu Peng team report). Please retain all information below this line when reposting, indicate the source, and notify Xiaojia. Thank you.

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