A spice boom has left manufacturers scrambling, and packaging materials can’t keep up

Varli Food Festival. Photo: courtesy organizers

The most sought-after at times have been as costly as precious metals. Their allures set world exploration in motion, fueled sailing expeditions around the Cape of Good Hope, precipitated the establishment of colonies. And now, more than 4,000 years after the initial fervor, we are living through a new spice boom.

The pandemic has had dramatic effects on the food system, ingredients ping-ponging between surfeit and scarcity. Broken supply chains have resulted in the dumping of milk and eggs, and the rotting of produce in the fields, even as grocery stores have seen shortages of things such as meat, flour and yeast. But spices have been a bright spot, a category steadily increasing in demand since the virus took hold, with plastic and glass container manufacturers straining to keep up.

In mid-March, Chip Overstreet, chief executive at Spiceology in Spokane, Wash., had to lay off 14 of his 50 employees, all of the people whose work focused on supplying the restaurant industry. But then something interesting happened.

“Our food-service sales will be down about 10% this year,” Overstreet says. “But our consumer business will be up about 500%.”

Bill Penzey, the owner of Penzeys Spices, headquartered in Wauwatosa, Wis., has also seen a dramatic increase in demand.

“People are cooking to get in touch with who they are in these times of stress,” says Penzey, who has been a vocal critic of the Trump presidency. “A lot of people are dealing with having covid-19, or cancer, or losing someone they love to covid-19. Baking and cooking mean more to people. It’s about time spent with other people in your life. Even if you’re alone, cooking connects you to the people in your life, and that connection matters more now.”

There are several things going on. More meals are being prepared at home, which has led consumers to reinforce their existing herb and spice pantry. Also, more young or first-time cooks are taking the plunge and laying in seasonings beyond salt and pepper. According to Darren Seifer, food and beverage industry analyst at the market research NPD Group, Americans’ collective embrace of international restaurants has made us pine for certain flavors during the protracted shutdown of food service, and a pandemic surge in the sale of multicookers such as the Instant Pot have put many Asian cuisines – from Indian to Thai – within reach.

Sales of McCormick & Co.-branded spices and herbs were up 35% over last year for the 13 weeks ending Aug. 30, according to Information Resources, a data analytics firm. One of the world’s largest spice companies, based in Hunt Valley, Md., is up nearly 16% in dry recipe mixes in that same time frame, nearly 10% for mustard, 44% for hot wing sauce and 35% for barbecue sauces, the data shows.

Buyers’ willingness to pay a premium for new flavors and global tastes has been fueling the growth of the international product market for some time. According to Grand View Research, the global seasoning and spices market was valued around $13.8 billion in 2019 and was expected to see substantial growth through 2027.

The pandemic has accelerated this. According to the NPD Group, national consumption of spices, seasonings, marinades and rubs was up over 50% in July 2020, the most recent month for which data is available, compared with July 2019. Much of the increase has been seen at breakfast and lunch, two meals historically eaten away from home. Instead of the grab-and-go staples of the pre-pandemic era, households have more time, and breakfasts have become more involved. Home lunchers have upped their condiment and seasoning game.

And though the holiday season typically sees an uptick in spice purchasing, McCormick anticipates even greater demand for garlic, sage, cinnamon, vanilla and pumpkin pie spice. Many American households will be preparing holiday meals for the first time. McCormick has ramped up production, adding the equivalent of an additional plant to its U.S. manufacturing capacity by the end of 2020, according to Lori Robinson, vice president of corporate branding and communications.

Not everyone has benefited from the boom. McKinley Thomason owns the Doug Jeffords spice company in Mount Pleasant, Tenn., as well as Nueva Kerala, a spice-growing company in Guatemala. A large portion of his business was industrial supply for food service and private-label spice manufacturing.

“We’ve lost 12% of our business,” Thomason says. “We’ve gotten through packing covid-19 emergency relief supplies for the state of Tennessee – soup mixes, gravies, instant mashed potatoes.”

The bigger issue, he says, is packaging materials.

“Jugs, shakers, bags, plastic tubs – the lead times are stretching from two to three months and now into the new year. We’re having to bring in plastics where molds don’t fit the specs,” he says.

Overstreet at Spiceology is having similar problems. The company has pivoted entirely to direct-to-consumer, launching 13 new salt-free blends in August. The spices themselves have been relatively easy to source, he says, but two- and nine-ounce glass jars, 5.5-ounce plastic containers and even restaurant-sized containers have been in short supply.

“We can’t get containers and lids, and the corrugated packaging for gift sets have seen much longer lead times,” he says.

And with increased demand and production, he has worried about coronavirus outbreaks in his packing facility, providing masks and daily temperature checks for employees.

Bill Penzey’s 270,000-square-foot factory and warehouse in Milwaukee County shut down early in the pandemic in the name of worker safety, even as he saw online “panic buying” of spices such as cumin – a flavor that goes great with those hoarded dried beans.

“When we saw this taking off, we just shut it down and said, ‘Let’s get through this right.’ We started back up with a third of the orders being shipped as before, continuing to email customers and stay in touch with them,” Penzey says, adding that workers packing spices have a tough time maintaining six feet of social distance.

With the spices themselves, which he says are mostly grown within 10 to 15 degrees of the equator, he’s seen small transportation hiccups but a lot of international collaboration.

“People want to vilify China,” he says, “but one of our Chinese spice suppliers sent us $8,000 worth of masks for free.”

 

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