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The sauces and condiments segment is witnessing a significant surge in merger and acquisition (M&A) activity, reflecting a robust investor appetite and confidence in the sector's fundamentals.

According to a recent report from Brown Gibbons Lang & Company, both established brands and start-ups are capitalising on evolving consumer preferences, propelling this subsector into the spotlight.

The report, titled 'Sauces and Condiments Heat Up Food & Beverage M&A,' highlights several key trends that are influencing market dynamics.

Notably, young consumers are increasingly driving innovation, with their preference for diverse and bold flavours leading to a surge in product development. This demographic is not only adventurous in their flavour choices but is also seeking healthier options, which has prompted brands to incorporate better-for-you ingredients and functional additives into their offerings.

Key market drivers

Flavour exploration: The growing consumer interest in global cuisine and intense flavours is reshaping the sauces and condiments landscape. As consumers seek to enhance their meals affordably, the demand for diverse flavour profiles is prompting companies to innovate.

Health consciousness: The report indicates a clear trend towards health-oriented products, with consumers gravitating towards options that align with their wellness goals. This shift is driving brands to develop sauces that not only taste good but also offer nutritional benefits.

Value orientation: Amid economic uncertainties, consumers are becoming more value-conscious. The report suggests that sauces and condiments that deliver exceptional taste at a reasonable price point are well-positioned to capture this market segment.

Increased M&A activity

The M&A landscape is becoming increasingly competitive, with both strategic and financial buyers actively pursuing opportunities in this vibrant sector.

Notable transactions include:

PepsiCo and Siete Foods

PepsiCo completed its acquisition of Mexican-American food brand Siete Foods for $1.2 billion in January, marking a strategic move to enhance its portfolio of better-for-you brands, tapping into the growing demand for healthier, gluten-free options in the condiment space.

Texas-headquartered Siete Foods’ portfolio spans a range of heritage-inspired foods serving a variety of dietary needs and preferences, with products such as beans, enchilada sauces, taco seasonings, botana sauces and more.

Campbell's Company and Sovos Brands

Campbell Soup completed the acquisition of Sovos Brands for approximately $2.7 billion last year.

This acquisition allows Campbell's to diversify its offerings and strengthen its presence in the premium sauces category, particularly with brands that resonate with health-conscious consumers.

The Sovos portfolio consists of a variety of food products including pasta sauces, dry pasta, soups, frozen entrées, frozen pizza and yogurts under the brand names Rao’s, Michael Angelo’s and Noosa.

Sovos reported $1 billion in net sales for the full year of 2023, with an organic net sales increase of 25% year-over-year. Rao’s organic net sales increased 37%, generating $775 million in annual revenue.

McCormick & Company and Cholula

McCormick's purchase of Cholula underscores the growing popularity of hot sauces and spicy condiments, positioning the company to leverage the rising trend of flavour exploration among consumers.

"The acquisition of Cholula accelerates McCormick's growth opportunities within our condiment platform and broadens our portfolio in the hot sauce category with the addition of the Cholula brand," said Lawrence E Kurzius, chairman, president and CEO.

He added: "Hot sauce is an attractive, high-growth category and, as an iconic premium brand, Cholula is outpacing category growth...Cholula, a brand known for authentic bold and spicy Mexican flavours, is a strong complement to our portfolio providing consumers and foodservice operators with an even more diverse product offering that we expect will strengthen our growth opportunities."

Advent International and Sauer Brands

In January 2025, Advent International, a global private equity investor, acquired Sauer Brands, a scaled platform of leading condiments and seasonings brands, from Falfurrias Capital Partners.

Sauer Brands’ portfolio includes well-known names such as Duke’s Mayo, Mateo’s Gourmet Salsa and Kernel Season’s. The company is best known for Duke’s Mayo, a beloved brand with a rich history dating back to its founding in 1917. Duke’s is one of the fastest-growing scaled player in the mayo category and the seventh fastest-growing brand in the centre of the store.

EagleTree Capital and Louisiana Hot Sauce

US-based private equity firm EagleTree Capital purchased cooking sauces and meal ingredients supplier Summit Hill Foods.

Founded in 1941, Summit Hill Foods is a food company known for its Better Than Bouillon, The Original Louisiana Brand Hot Sauce and Better Than Gravy brands. In addition to the retail brand portfolio, Summit Hill Foods serves as a flavour-focused solution provider and ingredient supplier to foodservice distributors, manufacturers and restaurants.

This acquisition highlights the increasing interest in regional and specialty sauces, as consumers seek authentic flavours that enhance their culinary experiences.

In addition to these high-profile transactions, private equity firms such as Shore Capital Partners, which acquired Lillie's Q, are also making significant moves to capitalise on the growing market. These acquisitions not only highlight the growth potential of this market but also indicate a strategic shift as larger entities seek to diversify their portfolios.

As consumer preferences continue to shift towards more innovative and health-conscious products, the sauces and condiments sector is poised for continued growth and investment.

Product innovation

There has been significant innovation in the sauces, dips, and condiments sector in recent months. Here are some of our favourite developments. Sauce Shop

UK-based sauce brand Sauce Shop launched two limited-edition sauces in collaboration with retailer Aldi. The new sauces, Truffalo Hot Sauce and Burnt Pineapple Sauce are made in the UK and contain only natural ingredients. Burnt Pineapple Sauce offers a unique, fresh taste that is fruity and spicy, with smoky notes from charred pineapple.

Kraft Heinz

Heinz introduced of a new line of condiments, called Flavour Tour. The sauces are inspired by flavours from around the world, including Mexican-inspired street corn, Korean-inspired sweet and tangy BBQ and Thai-inspired sweet chilli.

The Mexican-inspired street corn combines chipotle, lime and corn to create a creamy, smoky flavour. The Korean-inspired sweet and tangy BBQ offers a rich, bold punch, blending gochujang, doenjang and soy sauce for a kick. Meanwhile, the Thai-inspired sweet chili sauce, with its balance of spiciness and sweetness, brings together ginger, sriracha and sesame oil to deliver a tangy taste.

Lee Kum Kee

Asian condiment brand Lee Kum Kee unveiled a new chilli sauce trio, Wow Chilli Sauces, available now across the UK. The newly launched Wow Chilli Sauces deliver a balance of sweet, tangy, nutty and spicy flavours. They can be drizzled over noodles, added to stir-fries or served as a dip for snacks. The range features Makrut Lime Leaf Flavoured Chilli Sauce, Yuzu Flavour Chilli Sauce and Sesame Chilli Sauce. These sauces offer a fresh twist on traditional sweet chilli varieties.

Torani

Torani proved that sauces were not just for food with its launch of the first zero-calorie beverage sauce, which is claimed to be 'one of the first of its kind' to hit the market. As part of its 100th anniversary celebrations, Torani has launched two classic flavours – the French Vanilla and Pumpkin Spice – of zero-calorie sauce, following a report that three in four Americans are avoiding or limiting their sugar intake.

Crafted without artificial colours or flavours, the new beverage sauces are the company's first zero-calorie, sugar-free sauce designed specifically for mixing and blending in cold beverages.

Holy Moly

British all-natural dip brand Holy Moly debuted a new range of fresh sauces and dressings. Designed to add a new flair to meals – from steaks and chicken wings, to stir-frys and salads – the new range of sauces and dressings offer fresh, cold pressed serves to boost flavour. The flavours include Chimichurri, Peanut Satay, Ranch Dressing, Honey Mustard and Smoky Chipotle.