Kikkoman Competition
Now Viewing Kikkoman's competition in: Seasoning and Dressing Manufacturing (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's customers? - Typical customers are food distributors, grocery stores, warehouse clubs, restaurant chains, dollar stores, and convenience stores (c-stores). Some companies sell directly to food manufactures for use in processed foods.
How does the company promote new products? - Many companies rely on food trade shows to generate interest and sales around new product launches and innovations.
What is the company's breakdown in sales between institutional/foodservice and consumers? - The seasonings and dressings industry relies on institutional and foodservice sales for 60 percent of total revenue; sales to consumers account for the rest.
How much does the company rely on key accounts for sales? - Within the retail sector, grocery stores account for around 70 percent of total sales and Wal-Mart 10 to 20 percent.
How does the company manage sales to key accounts? - To handle high-volume needs, companies typically assign a sales force and national sales manager to Wal-Mart and other major retailers.
Does the company produce private-label brands? - Many companies produce private-label seasonings and dressings for grocery and c-stores. Private-label condiments, gravies, dressings, and sauces are a $500 million industry, with products that typically cost 20 to 40 percent less than name-brand.
How does the company market its products? - Major types of marketing include TV and radio advertising, coupons, celebrity tie-ins, cookbooks and seasonal recipes, discounts and promotions, and product-specific websites.
How does the company respond to customer needs and inquiries? - Customer service operations can be extensive. Companies must have staff to handle inquiries and manage recalls.
Competitive Landscape
Demand is driven by consumer tastes and health considerations. The profitability of individual companies depends on efficient operations, effective marketing, and a strong sales force. Large companies have advantages in purchasing, distribution, and marketing. Small operations can compete effectively by manufacturing exotic sauces, sourcing and selling rare herbs, or formulating custom spice blends, extracts, and mixes. Average annual revenue per employee is $425,000.
Full Industry Overview For Seasoning and Dressing Manufacturing
Business Challenges
CRITICAL ISSUES
Highly Competitive Industry - The seasonings and dressing industry is mature and highly competitive. Industry leaders compete for shelf space and customer mindshare. Smaller companies must have a truly compelling product and a willingness to pay for shelf space to be considered by wholesalers and retailers. Manufacturers also compete with retail private-label offerings, even if the manufacturer doesn't produce private-label seasonings and dressings. Companies must differentiate brands to avoid competing on price: many consumers think of sauces, dressings, and spices as commodities bought solely based on price.
Volatile Ingredient Prices - Prices for commodity inputs such as soybean oil, high fructose corn syrup, herbs, and spices can increase significantly due to poor farm yields, unpredictable weather patterns, and government farm subsidies. Ingredient prices typically represent 50 to 70 percent of a seasoning and dressing manufacturer's total cost of goods sold. Consumers may decide to forgo purchases of sauces or spices if they cost too much. Food manufacturers and restaurants may import ingredients if domestic costs are too high, or alter recipes to incorporate cheaper spices, dressings, and sauces.
Industries Where Kikkoman Competes
- Food
- Sauces & Condiments(primary)
- Agriculture
- Beverages
- Business Services
- Environmental Services & Equipment
