Top Procurement Challenges Hindering the Growth of the Global Spice Market
Spices are widely used to flavor, preserve, or color the food. The earliest spice trade was estimated to be carried out at around 2000 BCE throughout South Asia and the Middle East where cinnamon and black pepper trade were carried out. Although early uses for spices were connected with magic, religion, tradition, medicine, and preservation, […]READ MORE >>
Spices are widely used to flavor, preserve, or color the food. The earliest spice trade was estimated to be carried out at around 2000 BCE throughout South Asia and the Middle East where cinnamon and black pepper trade were carried out. Although early uses for spices were connected with magic, religion, tradition, medicine, and preservation, today it is widely used in food preparations. Spices serve several purposes in cooking and are widely used to add flavor and aroma and enhance the taste and color of food. Additionally, spices also display antimicrobial and anti-inflammatory properties and are also rich in anti-oxidants. Today, India accounts for 75% of the total production in the global spice market. Growing popularity of Asian cuisines in regions such as Europe and North America due to increasing Asian immigrant population is speculated to be the major growth driver in the global spice market. Although the growth prospects look bright for players in the global spice market, they face numerous procurement challenges when it comes to establishing themselves in the market.
Procurement challenges in the global spice market
- Cloves are usually adulterated with materials such as exhausted cloves, mother cloves, brown cloves, or stems for economic gains. Such type of food fraud is quite common in the global spice market. Thereby, it is essential for the buyers to make sure suppliers comply with necessary
- The clove market is facing challenging times in terms of increasing production and labor cost. Low investment in technology and migration of skilled labor is the primary reason for such increasing costs. The widening gap between demand and supply including the increasing costs is causing problems for the players in the global spice market.
- Clove suppliers usually source raw material from small farmers. As a result, there’s a high chance that raw materials may not pass the minimum quality standards resulting in the processing of low-quality cloves.
- Traces of pesticides and contaminants found in the cloves is causing major procurement issues for the buyers in this market. These pesticides are found as a result of usage in the farming process to achieve better yields. It is essential to use various techniques to detect and remove any traces of pesticides or chemicals.
- The quality of cardamom greatly differs as buyers procure from multiple suppliers. Additionally, soil fertility, organic matter content, and climatic condition also affects the final product quality. To ensure consistent product quality, buyers should evaluate suppliers based on their track performance, supply chain capabilities, and backward integration efficiency.
- Buyers in the cardamom spice market often expect timely delivery of products. However, it is not always possible to ensure on-time delivery due to demand-supply dynamics and climatic conditions. Delays in the delivery of raw material can significantly affect supplier’s time-to-market of the final product.
- Identifying the origin and authenticity of the cardamom variety is often a challenging task in the spice market. As a result, suppliers face difficulty in upholding the brand trust. To assess the product origin and authenticity, suppliers are implementing comprehensive identification and tracking systems throughout the supply chain of cardamom.
- Companies usually have a huge demand for black pepper, which is fulfilled by sourcing from multiple locations and nations. However, they face difficulty in sourcing similar quality of black pepper across the nations because of differences in the extraction and manufacturing process. To tackle such issues, it is advisable that buyers engage with suppliers with worldwide presence who standardize their manufacturing process.
- A few suppliers engage in the practice of diluting black pepper to increase its value. They do so by adding inferior or less desirable elements like mineral oil, papaya seeds, and sawdust. For instance, replacing even 10% of black pepper with papaya seeds can result in substantial profits for the suppliers. As a result, buyers should conduct a proper risk assessment to prevent adulterated materials from entering the food chain.