The story of spices

How the pursuit of flavour kickstarted a global trade phenomenon

The spice trade dates back thousands of years, and it is still growing today with artificial intelligence, lifestyle changes and international trading shaping its future evolution.

A modern essential with ancient origins

Spices have a multitude of important uses, from flavourings for food to perfumes for the home and medicine for the body. Yet perhaps what’s most impressive about those little jars in the kitchen cupboard is just how much of an impact their contents have had on world history and global trade.

Spices have been traded since ancient times, and are known to have been present in the Middle East at least 4,000 years ago.¹ However, one of the most pivotal moments came in 1498 when Portuguese explorer Vasco de Gama made the first sea voyage from Europe to India. Not only did he land in what was then the centre of the spice trade, he also opened up the first maritime trade route between Europe and India²and revolutionised global trade forever.

Today, India is still the world’s biggest exporter, accounting for half of the world’s spices.³ Vietnam and China are two other major exporters, and the sector is tipped for further growth in the coming years. Forecasts suggest the spice industry will increase by just under 5% a year to reach a market size of almost $23bn by 2026.⁴

Fusing cultures through flavour

Despite being thousands of years old, the spice industry has seen considerable growth in recent years. Today it is worth $15bn a year⁵, but the World Bank, drawing on data from the United Nations, suggests that the estimated total value of world spice exports was just $2.4bn in 2001, having grown from $988m in 1980.⁶

So what’s been driving this growth? Globalisation has played a critical role. As people move between countries they bring their cultures – including their food culture – with them. For example, the impact of Indian migrants on the UK’s food culture – and demand for spices – has been so transformative that curry has been voted as the UK’s favourite home-cooked meal.⁷

But food tastes are also becoming more adventurous, as consumers increasingly seek out more exotic flavours. The most promoted spice blends in Europe in 2018/19 include those from the Middle East, Eastern Mediterranean, North Africa, Japan and South-East Asia.⁸In the US, pepper use is reported to be on the rise, with east African flavours another trend in the market.⁹

As the spice industry grows, new ways of catering to global demand have needed to be found. Part of the solution has been in the development of regional trade links. As well as being a major exporter, India also imports $750m of raw spices every year.¹⁰ While part of this is to cater to domestic demand, the country has also become a major processing centre for spices from other countries.

$15bn

Size of annual global spice market

$23bn

approx. Expected market size in 2026

India

World’s largest exporter

Taste of the future: innovations in spice cultivation

The spice trade may have its origins in antiquity, but that doesn’t mean modern-day technology isn’t playing a part in its continued development.

One area this is apparent is in the way spices are sold. India introduced e-auctions for cardamom in late-2007, replacing the traditional auctions where sellers would shout out bids.¹¹

But even more high-tech than that is the use of artificial intelligence (AI), which is being used to develop new spice blends and predict the flavour combinations that consumers will prefer.¹²

Changes to attitudes and lifestyles are also shaping the future of the spice industry. As consumers place a greater priority on sustainability and quality, the demand for organic spices is growing. The global market is expected to increase by 5% a year to reach $368m by 2025.¹³

Other trends are fueling new market opportunities too. Veganism was described as the UKs fastest-growing food trend of 2018,¹⁴ with spices playing a key role in flavouring meat substitutes that cater to these lifestyles.¹⁵ And while spices have been used in cosmetics for thousands of years,¹⁶ new market trends are helping to fuel a resurgence.¹⁷

A global market that’s heating up

With the spice industry continuing to evolve, new production centres are emerging to capitalize on shifting patterns in demand.

One area this is becoming apparent is in China and India, where their home-grown crops are struggling to meet domestic demand and they are becoming big importers as well as exporters. This has led to new production markets emerging such as Cambodia, which saw its pepper crop grow from 1,450 tonnes in 2011 to 20,000 tonnes in 2017.¹⁸

The industry is also being influenced by the wider consumer desire for a lower environmental impact. One response has been in packaging, where steps are being taken to reduce its carbon footprint.¹⁹

What possibilities await your business?

There are many things that businesses in other sectors can learn from the spice industry, whether in spotting new opportunities or in evolving to maintain a position of strength.

For instance, there’s little doubt that the spice trade has been heavily influenced by the way macroeconomic factors and consumer tastes developed over the years. Keeping a close eye on the way these are changing can help to open up new export destinations, disrupt established trade flows and even unearth new market segments for your products.

Discover more about how you can tap into the potential of international trade by relying on the extensive global network that FedEx has – which can offer you next-day delivery to selected destinations worldwide.

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