Chinese compound seasoning market is expanding. 

Frost and Sullivan data show that in 2020, China's compound seasoning market size was about RMB 150 billion, with an annual compound growth rate of about 15.83%. According to Euromonitior, the penetration rate of compound condiments in the U.S. and Japan is 73.39% and 59.32%, respectively, while it is only 26% in China.¹ High growth and low market penetration rates imply enormous growth prospects for this sector. 

Compound seasoning mainly includes five subcategories: chicken powder, hotpot condiment, Chinese compound seasoning, Western compound seasoning, and others. Salad dressing is a representative of Western compound seasoning, and its rapid growth in China is mainly driven by the popularity of western-style catering.

Modern lifestyle evolvement fuels the growth of the salad dressing market.

Light meal & salad trend maintains strong momentum.

The light meal (refers to healthy and nutritious food that is low in calories, fat and high in fiber) trend, represented by salad diet, has made waves in China since 2015, and the trend has shown no signs of abating until now.

According to data released by NCBD (New Catering Big Data)², the size of China's light meal and salad market was 3.64 billion yuan in 2018 and was expected to exceed 5 billion yuan in 2020. Meanwhile, data show that in 2018, the consumption population of light meal and salad in China was 7.6 million, which was expected to exceed 10 million in 2020. Under this tide, salad dressing has maintained double-digit sales growth in recent years. The sales of low-fat salad dressings even grew 154% year-on-year (for the past year ending September 2020).³

Salad tide has swept the whole country.

Upward-sloping consumer demands have also led to an expansion of the salad consumption scenes from outdoor catering to home cooking. The Kantar Consumer Index found that about one in five urban households had bought salad dressing in 2020.

The takeaway industry further adds to an upward projection.

The takeaway has become necessary for Chinese urban workers and young people during lunch and dinner time under the fast-paced way of life. Light meal and salad are among the most popular categories for them due to low calorie and fat. In 2019, light meal merchants on Meituan (China’s leading takeaway platform) saw a 58% year-on-year increase, and light meal orders increased 98%.

There are many salad takeaways options on Meituan app.

Overseas brands occupy a dominant position in the Chinese market.

Chinese consumers' preference for overseas salad dressing brands has led to the dominance of imported brands in the Chinese market, represented by Heinz, Kewpie, Kuhne, Hellmann’s, and Praise. Japanese brand Kewpie has accounted for about 60%³ of China's domestic market share. During the 2020 Tmall Double 11 Shopping Festival, Kewpie was the Top1 selling brand in the salad dressing category.

Japanese brand Kewpie has many salad sauce SKUs in the Chinese market. Photo source: Tmall

Overseas brands should get to grips with the local consumer preferences.

Currently, young people, fitness groups, and high-income families are major salad dressing users in China. Consumer demand for salad dressing in lower-tier cities is also becoming prominent. Kantar consumer index data shows that in the past year ending September 2020, household consumption of salad dressing in lower-tier cities showed double-digit growth, which was much higher than those in top-tier cities. Young singles in lower-tier cities are more willing to try Western-style sauces.

Compared with consumers in European and American countries who prefer Caesar sauce and vinaigrette, Chinese consumers are more receptive to the sweet flavor, which accounts for nearly one third⁴ of the market share. Mayonnaise and plain salad dressing ranked second and third, respectively.

The salad dressing category has the potential to grow rapidly in the long term in the Chinese market. More overseas brands are expected to entering this potentially lucrative market segment, introducing flavors that better meet the needs of Chinese consumers and expanding the consumption scenes of this category.

If you would like to know more details about China’s salad dressing or compound seasoning market, or need any assistance in introducing your products to China, welcome to consult with ChemLinked.