Spices and Herbs

packers or direct from importing/trading companies. Some industries have joint
arrangements with producers to ensure regular supplies and maintain quality standards and
specifications of the spices concerned. Another user group is the catering sector:
restaurants/ hotels and institutions (hospitals, schools etc.).
Supermarkets dominate the Dutch retail sector with around 85 per cent of the total market.
Spice grinders/processors persuade supermarkets to display more spices and herbs on the
usual shelf which is near the sauces and soups. But recently they also recommend to
display along other spice/herb related products. Examples of this are salad seasonings,
displayed with salad vegetables, or chicken seasoning with chicken or near the fresh meat.
This method of displaying complementary products near each other is also used by
suppliers of wet and dry cooking sauces, with the result that such sales’ “hot spots” in
supermarkets are keenly sought-after.
Independent grocers, delicatessens, speciality shops (butchers, bakers, spice shops,
Indonesian food shops etc.) have a small share. They are important suppliers to large
ethnic communities. Even if they have a small market share, they are important for
grinders, since they offer higher profit margins and do not compete with the private labels
of supermarkets. Spices and herbs can also be also found at open markets.
The functional distinctions between the different types of traders described above have
become blurred in recent years because of structural changes in the trade and a decline in
the number of brokers and traders in Western Europe as a whole. Different types of trading
activity are often carried out at the same time within one company.
The trade channels most open to new exporters are those for the bulk sale of non-ground
spices and herbs to importers/traders in The Netherlands. Local importers, processors and
packers have long established links with their customers and are in a better position than
distant processors to know the requirements and fluctuations of the local market and the
needs of end users. They supply supermarket chains direct and are financially able to
support exclusive contracts and advertising campaigns or to service in-store racks and
stock control for spices and herbs.
For these reasons the prospects for exporting processed consumer packed spices directly
from the countries of origin are low and a very high percentage of spices and herbs
imported are dried and cleaned but not otherwise processed.
3.6 Prices and margins
3.6.1 Prices
In the past, speculation by major buyers has been a feature of the trade in spices and herbs.
In the mid-1980s pepper prices reached a peak. These high prices encouraged additional
planting by pepper growers, leading to an oversupply. For many items in the spice range,
there has been world-wide over-production in recent years and a stagnating demand.
This has caused price levels to decrease steadily, with prices reaching an absolute
minimum in 1991, when in some cases the market price descended below the cost of
production. These low prices caused producers to lower their production, which in turn
reduced the available supply in world markets, so that price levels increased again between
1993 and 1995.
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