From time immemorial, spices have played a vital role in world trade due to their varied properties and applications. We primarily depend on spices for flavor and fragrance as well as for color, as a preservative and for its inherent medicinal qualities. Although about 107 spices are recorded, only about a dozen are important – black pepper, cardamom, ginger, turmeric, large cardamom, cumin, coriander, fennel, fenugreek, chillies, saffron and celery. Of all those spices the marketing analysis here will focus on fenugreek, although problems frequently arise with production and trade statistics since spice products are frequently combined under one heading.
Although the spice industry has undergone substantial changes since early developments, the product range and the global pattern of trade has not altered radically.
At the beginning of the twentieth century, Asian producers had achieved a dominant position in the export of spices, British India was by far the most important of these followed by Japan, Thailand, China and Dutch East Indies (now Indonesia). The main flow of trade was to Ceylon (Sri Lanka), which was the hub of the Asian market, and to the British Straits Settlement (now Malaysia) in which Singapore played an important role as an entrepot. Asian exports to Europe and North America were on a much smaller scale.
Severe disruption of the South East Asian and Far Eastern trade occurred during the Second World War. After the cessation of hostilities a rapid recover occurred and in the postwar period the main flow of trade in spices has been from India and China to Sri Lanka and Malaysia, and from Mexico and Japan to the US. From the early 1970s however, historical trading patterns underwent a significant change with the reduction of imports into Sri Lanka and the emergence of China and India as the world’s chief exporters of spices, while Morocco is the second most important exporter to the European Union (EU).
Although, historically, the spice industry in each of the main European nations developed to a large extent independently, the creation of the EU has done much to encourage its integration. Rotterdam, Hamburg, London and Marseilles have traditionally been the main entrepot centers for spices and many of the biggest importers are based in these cities. Some of these traders have themselves diversified into the processing and packing of spices. The majority of these companies are involved in importing other commodities and food stuffs. Some, however, specialize almost exclusively in one or two particular spices. All of them now operate on a European-wide basis.
The volume of world trade in fenugreek has always been subject to considerable fluctuations. One major factor contributing to these variations is that international trade in this commodity is only a small percentage of global production. Considerable difficulties are encountered in attempting to determine the level of trade in fenugreek. Apart from the common shortcomings in the export statistics of many of the major exporting countries, the trade in small volumes of this commodity from numerous other minor exporters is rarely reported, and even in some of the major importing countries in the Western hemisphere import statistics are frequently deficient. The published statistics must be regarded therefore, as no more than very approximate orders of magnitude in many instances. An estimate of the world trade in whole and ground fenugreek has fluctuated around 10,000 tons.
The overall market structure for fenugreek in Western Europe and the US are not dissimilar although there are differences at the margin. Common to other spices, both markets show some decline in the importance of brokers and agents as increasing direct contact is made by importers and spice-packers with suppliers in the producing countries. The two markets also show a decline in forward contracting in favor of spot trading.
Production and processing
Fenugreek is one of the earliest spices known to man. Ancient Egyptians used it as a food, medicine and embalming agent.
Fenugreek belongs to the legume family; it is a cripping plant (in some cases) with whitish blossoms. It is especially resistant to drought and temperature changes. As in the raze, with legumes, the whole plant and particularly the product and the seeds are rich in proteins. Fenugreek has a strong, pleasant and quite peculiar odor reminiscent of maple.
It is an annual, maturing about 3–5 months from sowing. During the annual production, the whole plant is harvested and hung up to dry before being threshed to obtain the square-shaped seed. International dealers require low levels of admixture (loose husks, dirt, other seeds, etc). The level should be no more than 4 percent and preferably below 1 percent.
In many infertile areas, the plant has been used (especially in early times) as an alternative to cereals in rotation techniques. Fenugreek fixes nitrogen in the soil and can be used as a forage as well as for the provision of seed. Forage yields of 9 tons/h and seed yields of 3.5 tons/h are claimed.
The main international trade in fenugreek is in the seeds but the fresh and dried leaves are also used to flavor curries.
The principal uses of fenugreek seed are in spice mixes for processed meat products and to a lesser extent, in curry powder. Fenugreek seed is also used extensively in Italian cooking, particularly in pizzas and certain pastas. The whole seed is available in retail packs. Other uses of fenugreek seed is in animal feed flavor for both ruminant and pig feed. Before incorporation in the feed, the seed is ground and roasted. Fenugreek was traditionally blended in equal proportions with aniseed but the price of aniseed has increased considerably and its use has been much reduced. Cheaper synthetics, including vanillin and anethole, have made inroads at the expense of natural spices, but fenugreek seed being reasonably low-priced has been able to maintain its position better than most.
An essential quantity of fenugreek seed is used for the production of extracts. Fenugreek spice extracts were developed to meet the new demands of the food processing industry. They have the following advantages:
- • consistency in flavor
- • not affected by bacterial contamination
- • much longer shelf life
- • easier storage and handling
- • full release of flavor during cooking
- • can easily be blended to achieve the desired characteristics.
The essential constituent of spices, which provides the aroma, flavor, pungency and colour, together make up a very small part, often less than 10 percent by weight of the whole. The balance mainly functions as the inert matrix and protective sheath for these essential constituents. These essential constituents may be obtained by solvent extraction of the spices, resulting in an extract called the spice oil or oleoresin, which consists of a complex mixture closely resembling the characteristics of the spice as a whole.
On steam distillation, the spices yield their volatile constituents. The essential oils thus obtained are endowed with the major part of the spice flavor and fragrance properties.
The oleoresins containing all the volatile as well as non-volatile constituents of the spices, most closely represent the total flavor of the fresh spice in a highly concentrated form.
Fenugreek oil and oleoresin can be used to advantage wherever fenugreek spice is used, except in those applications where the appearance or filler aspect of the fenugreek spices is of importance. In addition to the benefit of standardization, consistency and hygiene afford by fenugreek oil and oleoresin, there is a big potential in their use for new product development. New flavors and fragrances are constantly being sought to entice the consumer. This applies equally to food products, medications, as well as other non-food products.
Fenugreek oil and oleoresin are mainly used as food flavors, especially in dressings, soups, packed goods, fish and vegetables. It can also be used in artificial maple syrups, cosmetics, in tobacco flavors and sour spice seasonings. Small quantities, with a declining trend of fenugreek extract, are used in animal feed flavors. The decline is attributed to competition from cheaper synthetics. The extract was usually blended with anethole or an aniseed extract and dispersed on a base for mixing with the feed. There have recently been technical developments involving the spraying of liquid flavors on the feed stuffs, which it is claimed gives a better flavor dispersion than the usual method of simply sprinkling the dry flavor compound on to the feed. Therefore the demand for fenugreek extract may increase again. However, there is still some resistance to liquid flavors for the reasons mentioned before. Furthermore, any increase in the use of fenugreek extract can be expected to lead to a corresponding fall in the use of the ground spice. Moreover, it is argued that the seed offers a great potential as a source of the steroid precursor diosgenin. However, despite the development of seeds with high diosgenin content, extraction is not yet economic.
Apart from the large trading houses there are a series of small importers (often of ethnic origin) who supply either whole or ground spices to health food shops, small grocers and market traders. As health and sanitary legislation becomes more rigorous it will be more and more difficult for these small companies to survive. They are presently the targets of much criticism concerning quality control and product testing methods.
Most spice grinders and packers in Europe were originally established as small family concerns. Many of them have now been sold to large, often multinational companies, specializing in spices and other food ingredients. The consolidation of the industry is taking place very rapidly. Small companies can no longer afford the very high capital costs of new processing and packing machinery and above all sophisticated testing and quality control equipment. Probably of greater importance is the growing cost of marketing and promotion. Only the larger food manufacturers can afford the enormous advertising and promotion costs involved in selling branded products. The market is increasingly dominated by two food groups: McCormick of the USA and Burns Philip and Co. of Australia. Other major companies include Fuchs (which operates in Germany and France), Ducros (which operates in France and Spain) and CPC International, a US company. Many of the smaller companies prefer to supply to the catering trade or pack on contract for the supermarkets.
The spice extraction industry, producing spice oils, oleoresins or concentrated spice extracts and flavors, is now mainly in the hands of companies manufacturing a range of food ingredients or flavors and fragrance compounds. Food ingredient manufacturers will produce such products as colorants, stabilizers, gum resins and emulsifiers as well as spice extracts. Many of these are still small independent firms (e.g. East Anglia Food Ingredients, UK, or Aralco, France). The industry reports a slow trend away from processed spice extracts to the natural product. People prefer to see the spices they are consuming in processed foods rather than taste invisible flavors.
Almost all the flavors and fragrance companies now operate on a global scale, producing customized flavor compounds for the large food manufacturers. Ten companies have more than 70 percent of this market worldwide. They include Quest Harmman and Reimer, Givaduan and International Flavors and Fragrances (Commonwealth Secretariat, 1996).
The rapid growth in convenience foods and the spread of fast-food chains will have a powerful influence on the future structure and direction of the spice industry. The ready-to-eat food and catering sector are in many cases larger consumers of spices and spice products than the household market. Many of the spice processors are themselves diversifying into food processing and food ingredient manufacturing. Companies like McCormick, Kuhne and Amora all supply pickles, relishes and mayonnaise as well as a wide range of pourable spice sauces. It is in this area, not in packaged spices that most observers see growth in the market.
Trends in consumption and prospects
In the retail markets, spices are generally sold pre-packed in ground or whole form. These usually take the form of glass bottles or cardboard packets. Refills are available for many of the products. In some grocery stores and health food shops spices are sold in open sacks. Customers bring their own containers. More and more spices are being sold in the form of spice mixes or sauces. Pourable sauces is the fastest growing area in the spice retail sector.
There is a continuing debate over the merits and demerits of processing and packing spices at origin. Technically there are few constraints to local processing although tariffs provide some form of trade barrier. The main area of concern is over quality control. Increasingly, stringent food safety laws make it more and more difficult for new producers to afford the cost involved in setting up quality control systems. These have become one of the most important cost elements of the spice trade. The large multinationals like McCormick and Burns Philip encourage processing at source and have set up joint ventures in places like India, Indonesia, Mexico, etc. to provide spices in bulk.
The sale of retail pack spices from the origin is not expected to grow substantially. Apart from the health and safety issue, suppliers need to offer a complete range of perhaps 20–50 different products and must spend very sizeable sums of money on advertising and promotion. This cannot be done from outside the EU and US. An alternative strategy is for producers to invest in processing facilities within these countries.
In the case of spice extracts, particularly oleoresins production at origin is of growing importance. The growth in the industrial processing of spices has paralleled that of the ready-to-eat food and beverage business. Wherever spice flavor ingredients are required for application to food and drink products, spice extracts either in the form of oleoresins, essential oils or occasionally spray dried products are used. The objective of spice processing of this kind is to extract the aromatic and pungent principles from the spices in order to produce a concentrated product of uniform color and flavor. The additional advantage is that product hygiene can be strictly controlled and it can be easily stored and transported.
The spice industry is going through a period of consolidation and concentration. Importing and processing is being handled by fewer and fewer large companies. Many are operating on a European or worldwide scale. The buying power of these companies puts the small grower and exporter at a considerable disadvantage in the bargaining process. To counteract this, growers themselves will have to start working together and build long-term links with these major concerns.
As more and more big European spice houses source their raw materials directly from the countries of origin, there will be increasing contracts between growers and producers and consequently quality controlled growing. Such collaboration can be as joint ventures and involves investment on the part of the spice producer in the country of growth. The advantages for both sides are obvious: increased influence over the raw material quality on the part of the spice processor as well as guaranteed prices, transfer of know-how and technology for the suppliers in the country of origin. Frequently the foreign partner also invests in improved agricultural production facilities and in cleaning and drying and quality control laboratories.
Due to environment and health concerns there has been a growth in the sale of organic spices. There is no doubt that organically certified spices will be seen more and more on the market. At present none of the major brands have entered this field largely because of the lack of assured quality suppliers. Another related development has been that of “diet spices”: low sodium, low calories or fat-free sauces and seasonings (Commonwealth Secretariat).
Elsewhere, the Middle East is fast becoming the major outlet for fenugreek seed and there could be possibilities in the region for new suppliers. The reason for the growth in demand in the Middle East is probably the same as that given for the other spices, namely the influx of migrant workers from South Asia. The other important area where there are prospects for expanded trade is Asia, but imports into many countries in the region varies.
One possible application, for which it is claimed that fenugreek has good prospects, is in the production of diosgenin, a steroid precursor. The main source of diosgenin is wild yams of certain Dioscorea sp. Owing to supply problems in the principal producing country, Mexico, diosgenin has become expensive bringing about a switch to cheaper steroid precursors such as steroids from soya beans. This has led to a sharp fall in the proportion of diosgenin to other materials used in the production of steroids. For some oral contraception uses, steroids are also produced by total synthesis nowadays. However, it is most unlikely that the extraction of diosgenin from fenugreek will become economically viable, as a considerable fall in the price of fenugreek would be required, which would also reduce its attraction to growers. Therefore, this usage is thought to offer little prospect for producers.
Selections from the book: “Fenugreek. The genus Trigonella”. Edited by Georgios A. Petropoulos. Series: “Medicinal and Aromatic Plants — Industrial Profiles”. 2002.