The report found that local sauces have managed to keep market share, even in the face of competition from private label and international brands. However, local brand manufacturers have had to accept lower operating margins – falling an average of nearly 30% in the past five years, from 5% to 3.5%. Localised tastes tend to limit the potential market for any smaller player.
“The market structure of the €5bn western European table sauce market has been remarkably stable over the past few years, with local brands retaining their market share,” said Rabobank analyst Juliette Kuiken.
She added that the market is extremely fragmented and very competitive.
However, Heinz ketchup is less affected by local tastes and has increased its market share through acquiring local sauce brands, such as French firm Bénédicta and UK firm H.P. Foods.
“For the rest of the table sauce market, taste borders do matter and local brands cannot follow Heinz’s example in rolling out their brands to the rest of Europe,” Rabobank said. “However, local or across-the-border mergers are an interesting option.”