Investment Opportunity in Sauce Industry

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Investment Opportunity in Sauce Industry

The visual appeal of food is an important aspect all over the world, including Nepal. Customers care a great deal about the flavour, moisture, and appearance of the dishes. As more and more Nepalis are exposed to the international community, their expectations from the visual appeal and taste of food products are also changing accordingly.

One item that has always found favour among Nepali customers are sauces. The tendency to use sauces in Nepali kitchens and dining tables is increasing with the changing behaviour of Nepali consumers. As domestic production is not enough to meet the demand for sauces, the import of different types of sauce has been increasing by an average annual growth rate of 15 percent over the last ten years. In FY2018/19, Nepal has imported such products mainly from India and China, which account for 43 percent and 27 percent of Nepal's total import of sauces, respectively.

A product that has a market of around Rs 1 Billion should not be overlooked. Due emphasis should be given to substitute the import of sauces by arranging a lucrative environment of investment in this industry. Existing sauce companies should be uplifted, strengthened and new investment should be allowed so as to meet the growing demand of Nepali consumers. A conducive environment for investment, lucrative provision of tax waiver, incentives, subsidies and protection for Nepali sauce industries are essential factors in this regard.

As raw materials for the sauce industries are already available in abundant quantity, there is a dire need of creating a conducive environment to make Nepal self-reliant in sauces. Strict quality control provisions and pursuing international practices of manufacturing, labeling, packaging, and branding are also imperative for building consumers’ confidence in Nepali sauces. The world's import of sauces and their preparation was worth about USD 12 billion in 2018 and has shown a constant increase in the last five years. As such, there is huge potentiality of exporting Nepali sauce products to the international market as well.

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