Condiments are getting more expensive. Recently, Haitian launched its "Naked Soy Sauce" series, which emphasizes a 0-additive concept and highlights only five ingredients, pulling Haitian soy sauce into a new price tier. A single 460ml bottle is priced at 39.9 yuan on Tmall. Through the display of "water, non-GMO soybeans, edible salt, wheat, white sugar, nothing else," and the use of oxygen-isolating fresh-keeping bottles, the product's purity and freshness are highlighted. Qianhe, a brand long known for its high-end positioning, continues to position itself around "0-additive," supplemented by concepts like organic, targeting the high-end soy sauce market. Its organic soy sauce is priced as high as 49.9 yuan per 500ml, earning it the nickname "Hermès of soy sauce." Xinhe, Lee Kum Kee, and other brands have also launched soy sauce products priced above 30 yuan per 500ml. Beyond soy sauce, vinegar, cooking wine, chili sauce, and other condiments have also seen price increases through upgrades like zero-additive and organic options. With a flurry of high-end new condiment products, what is the logic behind this? With the shift in new consumer groups, how will condiments win favor? -01- Why are condiments getting more expensive? Condiments are absolutely a market whose scale and potential have been underestimated. Due to the essential, high-frequency, and favorable development prospects of the condiment category, it is relatively less affected by economic fluctuations. As consumers' demands for food quality rise, condiments have become a key track for investors, and several listed condiment companies have performed well. For example, Haitian, with a market value of up to 650 billion yuan, was once called the "Moutai of the condiment industry," even surpassing brands like Sinopec in market value. Zhongjing Mushroom Sauce, listed in November 2020, surged 200% on its first day. Qianhe, with steady growth, is also considered by investors as a brand with the potential to rival Haitian. In tracks like takeout side dishes, brands such as Zuodashi and Hubang have attracted significant investor attention. Capital attention has accelerated category growth. It can be said that the current condiment market is experiencing a spring of category development. The scale of the condiment market is equally impressive. According to Qingshan Capital, the overall condiment market is approximately 300 billion yuan, with an annual growth rate of around 7%. Compared to other mature categories like dairy (400 billion yuan, 2% growth), the condiment market is moving faster and has greater potential. Within this 300 billion yuan market, there are complex and diverse category attributes. It is distributed across catering (45%), household consumption (30%), and food processing (25%) [1], with household consumption alone representing a 100 billion yuan market. Due to the complexity of Chinese food culture, condiments are also rich and varied, ranging from highly versatile seasonings like soy sauce and vinegar to specialty ones like satay sauce and mayonnaise. As consumers pay more attention to condiment quality, major brands with safety guarantees have gradually gained recognition, achieving a shift from bulk to packaged products. The brand and capital advantages of major brands have further driven industry consolidation. But even today, the market concentration of condiments is far lower than that of other FMCG products. According to Euromonitor data, the CR10 of the condiment retail market is only 28%. Among soy sauce brands, Haitian has the highest market share at 18%, Zhongju Hi-Tech 5%, and Lee Kum Kee 4%, with CR3 below 30%, far lower than dairy (59.2%) and purified water (57.9%), and also significantly behind Japan, where the soy sauce market is mature (CR3 as high as 50%). In the vinegar industry, CR5 is only around 16%, and other categories like chili sauce show similar conditions. It can be said that in the condiment market, the power of major brands has not yet been fully unleashed, and there is still much room for improvement. With the upgrade of catering and household consumption, condiments have visibly become "expensive." New condiment products are getting "more expensive." Whether it's the old brand Haitian or new brands like Hubang and Li Ziqi, the unit prices of new products are increasingly higher. On one hand, the higher price is due to better ingredients and craftsmanship. Taking soy sauce as an example, Kantar data shows that in 2014, high-end soy sauce had a growth rate of 63% and a penetration rate of 32%, far higher than the 26% and 3% for economy soy sauce, respectively. This is closely related to consumers' focus on health and taste needs. To meet taste and quality requirements, high-end soy sauce is relatively stricter in terms of process and raw material quality. Brands achieve this by reducing additives and increasing fermentation days to provide richer, more umami products. On the other hand, brands are no longer catering to mass needs but focusing on segmented categories and consumer groups. This trend is more evident in compound seasonings. Taking flavored sauces as an analysis target, among traditional brands, although Laoganma's taste is unshakable in the chili sauce world, it lacks in product variety, flavor trendiness, and packaging refinement. Its channels are mainly traditional trade and supermarkets. New brands on e-commerce platforms, such as Yidunban and Fanye, can provide more "suitable" choices by targeting young consumers with individual needs. These brands have a very concentrated target audience, and consumers prefer products with more distinctiveness and characteristics. In terms of category selection, new brands tend to favor niche and scarce options, such as Fanye's truffle oil and king oyster mushroom chili sauce, or Yidunban's salted egg yolk sauce—products that are relatively niche but deeply loved by young people. Although these brands are still smaller in scale compared to Laoganma, the trends they represent should not be underestimated. Fanye's Three-Flavor Vegetarian Noodle Sauce shows monthly sales of over 50,000 units, with a 180g bottle priced at about 15 yuan. Another product, Spicy Fried Pork Ribs Chili Sauce, is priced at 26 yuan for 180g. In contrast, Laoganma's Beef and Black Bean Chili Oil, 210g per bottle, sells for less than 12 yuan. When condiments serve purely as side dishes or cooking ingredients, taste and cost are the most important evaluation criteria. But when they take on a certain social currency factor, both the product and the brand have room for premium pricing. Taking Li Ziqi as an example, in addition to providing brand support, it also represents values such as pastoral life and Chinese style. Consumers choosing Li Ziqi's chili sauce is also a form of personal expression. The cost per cooking session has become "more expensive." Besides the unit price increase of condiments themselves, beyond single seasonings and compound seasonings like side dish sauces, newly emerging quick-cooking dish seasonings and hot pot bases have also raised the price of a single consumption. Especially the booming catering industry has inversely stimulated the growth of the condiment market. For example, the growth of the sauerkraut fish dish not only successfully created chain restaurants like Tai Er, but also drove the sales of sauerkraut fish seasoning packets in the household consumption segment. Brands like Haidilao and Dezhuang have launched their own hot pot base and dipping sauce brands to compete for the home hot pot market. The amount spent per condiment consumption is higher. Additionally, in the takeout channel, users are also getting used to ordering side dishes and pickles to satisfy their taste needs. In this track, Zuodashi is deepening its focus, mainly offering one-person meal side dishes such as beef sauce and appetizers. A single sauce is priced at about 5 yuan for 30g, and appetizers are about 3 yuan. A small portion can just meet a consumer's needs for one meal. According to data from October 2019, Zuodashi has cooperated with a total of 7,400 brands, and it is estimated to help merchants earn over 100 million yuan more. It can be seen that old brands' new products are getting more expensive, and new brands start with high prices. On one hand, this is based on quality upgrades, producing higher-quality products with rarer ingredients; on the other hand, it creates more compound and convenient products to reduce users' reliance on cooking skills. Behind this change is the shift in consumer demographics, which brings changes in market demand. The high price is just a surface phenomenon; the underlying reason is the change in consumer demand for health, convenience, and other factors. -02- With the shift in consumer demographics, how can condiment brands adapt? Similar to other FMCG products, the condiment market is also undergoing an upgrade and iteration driven by changes in consumer groups. The changes in the condiment market reflect the market shifts brought about by changes in consumption levels and also indicate clear demographic dividend opportunities in the category. Based on the age of condiment consumers, they can be roughly divided into pre-80s, post-80s, post-90s, and Gen Z. The pre-80s group generally has more mature cooking experience, with relatively fixed needs for condiment types and quantities, and not much demand for taste changes. Existing old brands can basically meet their needs. Moreover, this group is relatively price-sensitive and cooks frequently, so overly high pricing would affect their choices. Among the post-80s group, a high proportion are working professionals, generally with stable family relationships, and some have children. Their cooking experience is weaker than the pre-80s, but as a group with high information penetration, they are willing to pay more for their own and their children's health, and are more inclined to buy products with concepts like "0-additive," "organic," and "real ingredients." At the same time, they are also keen on consuming internet-famous foods and popular dishes, but due to busy work, they tend to prefer simpler cooking methods. Products like compound sauces and quick-cooking seasoning packets allow consumers to quickly prepare a "big dish," meeting their need for a balance between taste and convenience. As post-90s and Gen Z consumers become the new force in the workplace, some of them have started living independently. Single and couple households have become the main family models. These consumers have little cooking experience and basically lack cooking skills. Their tastes have been "spoiled" by various restaurants and takeout, and they are neither willing to endure complex kitchen work nor able to resist the desire to satisfy their appetites. At the same time, beyond "stomach satisfaction," posting photos of their food on social platforms is also essential. This requires products to be not only easy to make and delicious but also visually appealing and substantive. This group of consumers has higher information sources and acceptance, likes to try new things and share, has a higher demand for food diversity, and is less price-sensitive. However, due to lack of experience, they are more dependent on condiments, especially compound seasonings that provide quick solutions. These views are not subjective. The Japanese market once experienced similar changes. Between 1980 and 2010, Japan's family structure trended toward smaller households, with a sharp decline in families of three or more, an increase in the proportion of working-age women in the workforce, and less time for household care, creating a need for convenient and efficient cooking. Currently, Japan's compound seasoning consumption accounts for 65.79%, while China's is only 26%. It can be seen that changes in consumer demographics bring changes in the cooking environment, which in turn alter the demand for condiments. Gao Hongqing, CEO and Managing Partner of Lianchuang Capital, once said, "When the younger generation steps to the center of the consumption stage, 99% of products can be redone." For young consumers, being expensive is not a reason to buy; products that satisfy their appetite and psychology are. Single condiments require more complex cooking skills, while compound seasonings are simpler and more in line with their needs. Besides kitchen cooking, side dishes and takeout seasonings are also important choices. A flavorful chili sauce can quickly "revive" a tired young worker. This has also contributed to the rapid growth of takeout condiment brands like Zuodashi and Hubang. -03- Beyond "suiting the taste," condiments must also "match the vibe" of young people As auxiliary materials for dining, whether in kitchen cooking or restaurant consumption, condiments cannot bypass the hurdle of cooking. But one point to note is: an increase in consumption in one scenario means a decline in another. Any trend that affects dietary changes will have a certain impact on the condiment market. Therefore, the analysis of condiments cannot avoid the overarching trend of changes in consumer dietary consumption. Although from the current perspective, major brands have much room for improvement, consumers now have more choices than ever, including meal replacements, instant foods, and snacks, in addition to regular meals. Therefore, for condiment companies, their competitors are not only players within their specific category or the broader condiment category, but also the many instant foods and side dishes that could replace users' dining consumption. Especially as consumers' demand for convenience increases, various self-heating pots, river snail rice noodles, and semi-finished dishes have become competitors to condiments. Brands need to constantly monitor consumer changes, adjust their business directions accordingly, and guide consumer demand through brand communication. For condiment brands, what they need to compete for is not the user's kitchen share, but the user's stomach share. Encouraging consumers to use their products more and developing more usage methods can further promote market changes in condiments. Based on consumers' pursuit of diversity and trending foods, provide solutions in a timely manner with products. When an internet-famous dish appears, brands need to react quickly to see if their products can ride the wave, provide cooking solutions, allow consumers to "perfectly" recreate it at home, and share it with others, potentially stimulating imitation and driving consumption conversion. This also provides good reference for product development. Shen Yueren, founder of the condiment innovation brand "Huadian Ziwei," mentioned in an interview: "Using social media hot topics to reverse-engineer products is a great method for new product development. Based on analysis of trending topics, food programs, and related category growth changes, you can find inspiration for product ideas." Leverage KOLs and platforms. Unlike the previous generation who cooked by experience, the new generation of consumers trusts professional cases more and is willing to share and learn on social and food platforms. Therefore, appearing in various scenarios where young consumer groups are present to achieve communication and dialogue is a direction that condiment companies, especially traditional ones, need to emphasize. Good product + high aesthetics is the "attention-grabbing tool." For young consumers, good-looking products are more shareable. Think of the products that have been hugely popular in recent years: SanDunBan's colorful mini coffee cups, Genki Forest's sparkling water, and Laxin Shuo's paper boxes. These brands not only have good products but also ensure their designs are distinctive and memorable, making consumers willing to share them on social platforms like WeChat Moments. These products also help consumers convey a lifestyle attitude. Summary: The "expensiveness" of condiments is based on upgrades in craftsmanship and ingredients, but beyond upgrades, we must also see changes in the environment. Perhaps young people don't cook very often now, but as family structures and social environments change, consumers will need new products to meet their dietary needs. In different settings—kitchen, dining table, outdoors—condiments that better understand young people are needed. References:

  1. Daren Fund, "5x Soy Sauce, 10x Vinegar—Overview of the Condiment Industry," July 1, 2019;
  2. Chen Mengyao, Guo Wei, "In-depth Report on the Condiment Industry: An Underestimated Industry, a Leader That Isn't a Leader," Condiment Business Circle, October 22, 2017;
  3. Sherry, "Condiment Brand 'Jiadian Ziwei' Secures First Round of Financing of Several Million Yuan, Making Every Meal Flavorful for Young People," FBIF Food & Beverage Innovation, November 11, 2020. Tips will be paid 400-2000 yuan once the tip is adopted. If you like this article, click [Wow] and share it with friends.********************