Traditional fish sauce market witnessing stiff competition from industrial fish sauce vendors, but it is definite to sustain supremacy due to organized distribution channels and increasing consumer preference towards organic staple products

During the yesteryears, consumption of fish sauce has witnessed an escalation owing to the trend of ‘seasoning’ in cuisines globally. Also, rising demand for organic food products with zero preservatives is adding impetus to global fish sauce market demand. Another pivotal factor assisting the market growth is a rise in coastal tourism, as fish sauce is an imperative constituent of coastal cuisine as a condiment as well as a dipping sauce. Apart from tourism, a coastal population that is estimated to be 40% of the global population (2.4 billion) stand out as a lucrative marketplace for the fish sauce as it offers savory umami flavor to dishes owing to the presence of glutamic acid in it. Other than the taste, fish sauce is dominating its counterparts such as soy sauce due to rich constituent of protein and low saturated fat and cholesterol that adds to its nutritional value. As fish has always been a principal source of protein accounting for 17% of protein at a global level that even exceeds 50% in several underdeveloped countries, naturally manufactured fish sauce is leveraging the established market for fish protein. A good fraction of impetus gained by the global fish sauce market demand is due to the natural and traditional manufacturing process of fermentation that offers products free from preservatives with a production timeline of up to two years. However, the traditional vendors are losing their market to industrial food manufacturers that are daily producing several thousand liters of industrial fish sauces– a mixture of water and chemicals in the form of fish essence, coloring, preservatives, and sweeteners. Hence, the industrial equivalent is a major trend disrupting the course of the market. According to Ho Chi Minh City Food and Foodstuff Association, in Vietnam that is one of the leading consumers of fish sauce and consumes 250 million liters per year, industrial products accounted for nearly 80% (190 liters) whereas traditional output had demand for only 60 million liters. However, the traditional fish sauce market demand is sustaining due to significant emphasis given on the nutritional content of products by principal fish sauce importers, including the United States and Europe. To further augment the marketing and distribution of traditional products organizations such as High-Quality Vietnamese Product Business Association are enabling associations with the agenda of promoting traditional fish sauces towards modern trade channels and supermarkets.

As a consequence, the global fish sauce market size is estimated to be $2.2 billion as of 2018. Moreover, with modern vendors implementing the industrial process for scalable production without the deterrence of time that is witnessed by natural production, opportunities in the market are evaluated to be progressing at a global CAGR of 3.55% during the forecast period of 2019-2025. Moreover, due to the rising demand for convenient food items by millennial population globally, its usage as a dipping sauce is further supplementing the market demand.

APAC dominates the global fish sauce market demand owing to leading shares in global marine catches:

According to the Food and Agriculture Organization of the United Nations, China holds the apex spot as a global fish producer and has also led as the largest exporter of fish and fish products since 2002. After China, the other major exporters are also from APAC such as Vietnam and Thailand holding the 3rd and 4th spot. This dominance in marine catches has augmented the consumption of fish sauce in this region due to surplus procurement of indigenous raw materials leading to inexpensive production. Apart from local consumption, APAC countries also dominate the global export of fish sauces with North America and Europe as the leading importers. According to the International Trade Centre, China is the second leading exporter of sauces and seasoning with quantity exported in 2018 recorded to be 815,536 ton, a growth rate of 9% from 2014-2018.

Similarly, the leading importers are the United States of America and the United Kingdom with quantity imported in 2018 recorded to be 643,973 and 547,643 tons, respectively. Hence, APAC is reckoned to be the most lucrative region for global fish sauce market with half of the global demand falling under its terrain. With fish products being an integral constituent of diet in coastal areas such as Indonesia, Philippines, Thailand, and Vietnam, APAC sourced 54% of the global fish sauce market demand in 2018.

Moreover, according to Agriculture and Agri-Food Canada, Vietnam and India are the top two suppliers of sauces, dressings, and condiments to the United States, that is the leading import market of the same. The list of top 10 suppliers to the U.S also includes China, Indonesia, and Thailand. Hence, with five countries in the list are from APAC, the affluence of this region in global fish sauce market share is explicable.

‘Supermarkets’ to revive the traditional fish sauce market witnessing stiff competition from the modern bait of industrial sauces:

In terms of the distribution channel, the global fish sauce market is bifurcated into direct sales and indirect sales. In the yesteryears, the traditional market was more dependent on direct sales devoid of any retail environment that can be stated as a principal factor leveraged by the industrial fish sauce manufactures utilizing the indirect sales set-ups of the retail sector including wholesalers, hypermarket, specialty stores, convenience stores, supermarket, and online retailers. Tracing the opportunities, the traditional fish sauce market vendors are working towards capitalizing the retail infrastructures for better sales and distribution reach. For instance, to enhance the customary distribution and marketing of traditional fish sauces, a program is instigated by the High-Quality Vietnamese Product Business Association that will enable integration between traditional fish sauce association and business to promote their merchandises towards trade channels and traditional markets. As a consequence, supermarket/hypermarket is the fastest-growing distribution channel type progressing with a CAGR of 4.12% going through to 2025. As the retail sector insists for products with longer shelf-life, traditional fish sauce vendor has an advantage as the industrial fish sauce that is a blend of diluted fish sauce and chemicals cannot be stored for long without preservatives.

An overview of the United States retail sector trends positively impacting the traditional fish sauce market:

In 2016, the U.S alone accounted for 20% of the global retail sales for sauces, dressings, and condiments. As the American consumer is drifting towards organic, nutritious, healthy, and flavourful products, traditional fish sauce manufacturers from APAC has tremendous opportunities to capitalize on this alteration of consumer behavior. This has also led towards the decrement in consumption of traditional table sauces such as mayonnaise and ketchup that had a substantial share of 36% in total sauces retail sales, and has augmented the acceptance of ethnic sauces delivering lucrative opportunities for fish sauce market players manufacturing in and importing to the U.S. Similarly, the market demand is forecast to augment as the organic sauces, dressings and condiments are also growing at a CAGR of 10.6% from 2017 to 2021.

Fish Sauce Market Companies:

Some of the leading players in the global market are Thai Preeda Group, TeoTak Sauce Factory Co., Ltd, Thai Fish Sauce Factory (Squid Brand) Co., Ltd, Tang Sang Ha Company Limited, Viet Phu, Inc, Fish Marine Resources Development Co., Ltd., Pichai Fish Sauce Co. Ltd., Rungroj Fish Sauce Co., Ltd., Rayong Fish Sauce Industry Co., Ltd. and Halcyon Proteins.

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