Market Information
Southeast Asia

Condiments: Seasoning for All Seasons ⁽¹⁾

Senen U. Reyes
Senior Management Specialist
Center for Food and Agri Business UA&P

The Filipino penchant for food is none the more manifested by our festive nature. Despite economic difficulties, we love to fiesta and party even on short notice.

We even use the most trivial occasions to get together and celebrate. One reason for our love for food is the condiment and seasoning that go with it. One would always find a match: mangga at bagoong, chicharon and vinegar, kare-kare at alamang, lumpia and vinegar with garlic, pansit and soy sauce with kalamansi or a mix of vinegar, soy sauce, kalamansi with chili pepper as dipping sauce for fried, grilled, steamed, or roasted meat, fish, and seafood.

Webster's Third New International Dictionary defines condiment in three ways. One, a condiment is something usually pungent, acid, salty, or spicy added to or served with food to enhance its flavor or to give added flavor. Thus, condiments are related to or synonymous to seasoning. Second, it is an appetizing and usually pungent substance of natural origin (as pepper, vinegar, or mustard). Third, condiments are any of various complex compositions having similar qualities (as curry or chili powder, pickles, or catsup).

Products

Webster's definition aptly describes the local condiments industry. The wide range of products include tomato ketchup, banana sauce, fish sauce, soy sauce, vinegar, salt, pepper, monosodium glutamate, liquid seasoning, broth cubes, garlic, ginger, mayonnaise, mustard, sweet and sour sauce, hot sauce, Worcestershire sauce, barbecue sauce, lechon sauce, wasabe, and food mixes. Most of these condiments can be used as seasoning, flavoring, dipping sauce, preservative, dressing, soup stock base, and marinate.

There are four major condiments regularly found in the Filipinos' kitchen and dining table: fish sauce, soy sauce, vinegar, and ketchup. There are several variants to these condiments.

Fish sauce, a common condiment in Asia, is made from the liquid drained off by fermenting fish with salt in large barrels or vats. It is locally called patis and is known as nam pla in Thailand and nuoc mam in Vietnam. Fish sauce is available in both premium quality and low grade. However, fish sauce is not a common seasoning in the Visayas as the locals are bound to give soy sauce when one asks for fish sauce.

Soy sauce is a salty, dark colored liquid produced from a mixture of fermented soybeans and roasted grain. There is light and dark soy sauce as well as a variant with kalamansi known as toyomansi available in the market.

Vinegar from the French vin aigre (sour wine) is made by bacterial activity that converts fermented liquids into a weak solution of acetic acid. Vinegar can be made from sugarcane, coconut, nipa palm, malt, pineapple, and rice. One product variant is vinegar already containing chili pepper, onion, and garlic called sinamak in Western Visayas.

Ketchup, a reddish sauce, probably got its name from Ke-tsiap, a spicy pickled-fish condiment popular in 17th-century China. It usually has a banana or tomato foundation and is available in classic, original, and sweet blends.

Demand

The National Statistics Office-Family Income and Expenditures Survey (FIES) revealed that in 1994, Filipino households spent P11 billion for sauces, salt, and other spices and seasoning. This grew to P16 billion in 1997. Households from the NCR, Southern Tagalog, and Central Luzon were the leading buyers of these commodities. (Note: The 2000 survey will be released soon).

Total spending, however, has not been indicative of per capita consumption as the figures were highest in the Mindanao regions particularly Western and Northern Mindanao. This is more a reflection of the economic situation in Mindanao where families use condiments as viand. Many of the country's poorest provinces are in the area.

From 1996 to 2000, industry sources estimate that soy sauce had the highest average annual growth rate at 12% followed by fish sauce (10%) and vinegar (3%). Total soy sauce demand in 2000 approximated 40,000 cases per day while vinegar had 20% less than soy sauce and fish sauce 40% less than soy sauce.

n - negligible (less than 0.5 grams)
Source: Food and Nutrition Research Institute

Industry players

Condiments are manufactured and distributed by numerous players which number over two hundred for vinegar and soy sauce and another hundred for fish sauce (patis). This excludes producers of unbranded products and fakes.

These companies carry competing brands the more prominent of which are Rufina, Tentay, and Lorins for fish sauce with an estimated 60-65% of the market. Datu Puti and Nelicom have 10-12% share.

The top brands for vinegar are Datu Puti, Amihan, and Silver Swan. Datu Puti and Amihan have 80% of the market. Silver Swan, Marca Piņa, and Datu Puti dominate the soy sauce market with 75-80% share.

Source: Various supermarkets and stores

Trade

The country is a net exporter of condiments. It has a positive trade balance in the four major condiments of over 6,600 tons in 1996 going down to 5,300 tons in 2000. Major exports reached over 8,300 tons in 1996 but have since dropped to less than 7,800 tons in the last three years.

Imports, on the other hand, increased from a little over 1,600 tons in 1996 to over 2,200 tons in 2000. Imports have effectively increased as a percentage of exports from 20% in 1996 to 30% in 2000. The industry, however, does not perceive the increased growth of imports as an immediate threat. Demand for imports basically come from the high-end market, which is only 1-2% of total volume.

Soy sauce is the country's major export accounting for 37-39% of total volume followed by vinegar. It is also the leading import with 60-85% of total volume.

Table 3. Condiments: Trade Performance, 1996-2000
Volume in tons; Value in US$'000 FOB (exports), CIF (imports)

Note: No imports of banana ketchup. Minimal exports of tomato ketchup.
SOURCE: National Statistics Office

Prospects

The industry is characterized by the presence of many players, as there are basically no barriers to entry. The producers of fake/adulterated mixtures sold at cheaper prices compound this. There is also minimal product differentiation, the threat of imports particularly from ASEAN competitors, and the growing health consciousness away from salty and carcinogenic substances.

Despite these negative factors, it is perceived that the condiment industry will thrive in good times and in bad times. It has been part of the Filipinos' eating habit and culture for generations. In times of prosperity, people are bound to eat more and eat out which will drive demand for condiments. In the same way, economic difficulties will still sustain demand given the people's tendency to add more taste and flavoring to rice considering the limited budget for meat, fish, and vegetables.

The growing population of the country coupled with the demand for instant noodles is seen as positive signs for the condiment industry. Over the short to medium term, the local condiment industry is expected to enjoy a relatively stable demand.

References

Chua, Karl. An Industry Analysis of the Philippine Condiment Industry. 2000. Center for Food and Agri Business-University of Asia and the Pacific.
Hernandez, Osorio, Rembon, Reyes, Romero, Sapitan. An Industry Analysis of the Philippine Condiment Industry. 2001. Center for Food and Agri Business-University of Asia and the Pacific.
National Statistics Office-Family Income and Expenditures Survey. 1994 and 1997.
FNRI, DOST Fourth National Nutrition Survey, 1993
Food and Agri Business Yearbook, Millennium Edition. 2000. Center for Food and Agri Business-University of Asia and the Pacific.
National Statistical Coordination Board-Foreign Trade Statistics of the Philippines. various years.

1.^* This industry brief was published by the Manila-based University of Asia & the Pacific, Center for Food & Agribusiness in the January 2002 issue of the Food & Agribusiness Monitor, primarily for a Philippine audience. This industry brief is being made available to Canadian businesspeople in order to provide basic market information should there be export interest in this sector.