Pushkar Mukewar, CEO/Co-Founder, Drip Capital, explains how Indian spice exporters can enter the complex spice products market and cater to a growing consumer base from various geographies given that the global spice trade market is projected to reach US$ 24.2 billion in 2028.
- The COVID-19 pandemic opened up new opportunities for Indian spices, fuelling a new wave of appreciation for Ayurveda and Indian cuisine, the demand for convenience, and the desire of people to experiment with different flavors.
- India, the land of spices, exported spices worth US$ 4.1 billion in FY 2021-22. The country was even the top-most exporter of chilli, cumin, and turmeric in 2021.
- With the global global spice trade market projected to reach US$ 24.2 billion in 2028, it is imperative that this trajectory is maintained. This shows how constant marketing efforts and export strategies are needed to help India promote its spices on the international front.
- Highlighting the various flavor profiles in the international market will create a specialty space for them globally and help strengthen ‘Brand India’.
Image credit: Pexels
The COVID-19 pandemic opened up new opportunities for Indian spices, fuelling a new wave of appreciation for Ayurveda and Indian cuisine, the demand for convenience, and the desire of people to experiment with different flavors. During this period, spices like turmeric, ginger, and cinnamon, came to the fore as people the world over rediscovered the health benefits and medicinal value of beverages like ginger tea and turmeric latte as immunity boosters.
Currently, India produces 75 of the 109 varieties of spices listed by the International Organization for Standardization, of which 80% is for captive usage while only 15-20% get exported. India, the land of spices and a prominent destination during the ancient spice trade, exported spices worth US$ 4.1 billion in FY 2021-22. The country was even the top-most exporter of chilli, cumin, and turmeric in 2021. With the global market for spices and seasonings projected to reach US$ 24.2 billion in 2028, it is imperative that this trajectory is maintained. This shows how constant marketing efforts and export strategies are needed to help India promote its spices on the international front.
India’s spice bowl mix
China and the US are the major export markets for India’s spices, while Bangladesh and the UAE import core spices, such as turmeric and ginger. These economies account for over 50% of India’s export market.
India accounted for 75% of the whole dried chilli market in 2021. While the product does not have a direct replacement, India should be wary of the competition from Spain, Mexico, and the Netherlands, which hold the largest export market share for fresh chillis.
Speaking about coriander, although coriander exports reached 57 million metric tonnes in 2021, its incremental unit pricing has been affected due to the volatile size of the sowing area and the availability of a cheaper variant from Russia. Ginger exports, too, accounted for 147.6 million metric tonnes in terms of volume driven by the spice’s potential health benefits. However, to compete with China – the market leader for ginger exports – India must increase its sowing area.
About 12.6 million metric tonnes of cardamom were exported last year, but the need of the hour is to reposition the product. Experimenting with cardamom’s fragrances and flavors with other products, such as coffee, and curating special blends could open new opportunities in markets interested in trying different products.
When it comes to pepper, unfortunately, its export is on the decline. Countries like Vietnam, Brazil, and Indonesia are giving tough competition to India. This is because the average export unit value of the Indian pepper is considerably higher than the export unit value of pepper from these countries.
Tapping into new opportunities
To support the new India vision ‘Amrit Kaal, Indian spices should be the torchbearer for agro products to boost the prominence of ‘Brand India’ worldwide. For starters, India can start by exploring new opportunities emerging from COVID-19. Capitalizing on the growing trend of Ayurveda and identifying countries that are influenced by Ayurveda and natural remedies will reveal new opportunities for Indian spice exporters. Moreover, the health benefits of spices can be used to create demand from the pharmaceutical and nutraceuticals manufacturing industry.
To meet the rising demand for ready-to-use spices, technological improvements must be introduced to ensure these mixes retain their authentic flavor. Currently, only 30% of India’s spice exports constitute goods like spice mixes, oils, oleoresins, and extracts. This offers an opportunity to enter the complex spice products market and cater to a growing consumer base from various geographies.
Re-branding the humble Indian spice as a specialty item and highlighting the various flavor profiles in the international market will create a specialty space for them globally and help strengthen ‘Brand India’. Additionally, countries where more Indians are migrating should be the next expansion focus for exporters.
Conclusion
Spices today are finding their way in different spiced beverages, concoctions, and ready-to-use products that cater to the international palette. Keeping this in mind, India must be in a position to predict these trends to leverage these opportunities and to achieve the government’s US$10 Bn export target by FY 2027. India needs to focus on diversification and promotion of Indian spices abroad. The government, too, can aggressively brainstorm new ways to ensure product innovation and marketing of Indian spices by stressing the various rich flavors spices can provide.
Pushkar Mukewar is the CEO/Co-Founder, Drip Capital. Views expressed are personal.
