The European market potential for cinnamon

Europe is a large and stable market for cinnamon exporters. The Netherlands, Germany, the United Kingdom, Spain, France and Poland can be considered the most promising European markets for cinnamon exporters from developing countries. They combine high import levels and a well-structured trade with well-developed spices and herbs markets. The European market is shaped by trends in sustainably sourced spices, and organic and fair trade certifications represent a specifically growing niche for cinnamon.

1. Product description

Cinnamon is the common name for the perennial plant Cinnamomum sp., a member of the Lauraceae family. There are hundreds of species within the Cinnamomum genus that are native to tropical and subtropical regions. The spice is harvested from the peels of the inner bark of the Cinnamomum tree.

There are 2 main types of cinnamon traded in Europe: Ceylon cinnamon (Cinnamomum zeylanicum) and cassia (Cinnamomum cassia). Cassia is the sweetest of the 2. Ceylon cinnamon, often referred to as true cinnamon, has a milder flavour, is finer and has less coumarin (a moderately toxic, naturally occurring sweet-smelling compound) than cassia. Cassia, the bark of the evergreen cassia tree, is a spice similar to cinnamon but coarser and less fragrant. It is therefore considered to be of lower quality. In this study, cinnamon is used as a general term for both species. When a specific species is meant, it is referred to specifically as cassia or Ceylon cinnamon.

Cinnamon is cultivated extensively in China, Indonesia, Sri Lanka and the coastal regions of India and Vietnam. The statistical data in this document are based on Combined Nomenclature (CN) codes. The CN uses Harmonized System (HS) codes to classify products. The codes used in this study are listed below. While the first code (09061100) focuses exclusively on Cinnamomum zeylanicum (Ceylon cinnamon), the second code (09061900) includes cassia. The cinnamon-tree flowers mentioned under this code are expected to play a very small role in trade. The third code (09062000), for crushed and ground cinnamon, includes both cassia and Ceylon cinnamon.

• 09061100: Cinnamomum zeylanicum blume, neither crushed nor ground;
• 09061900: Cinnamon and cinnamon-tree flowers (excluding Cinnamomum zeylanicum blume), neither crushed nor ground;
• 09062000: Cinnamon and cinnamon-tree flowers, crushed or ground.

The trade data presented in the document combine whole and crushed/ground cinnamon, unless otherwise specified.

Figure 1: Whole cinnamon sticks: Cinnamomum zeylanicum blume (left), Cinnamomum cassia (right)

Source: K-Agriculture

2. What makes Europe an interesting market for cinnamon?

Cinnamon is widely used by the European food and beverage industry across various categories. It is also 1 of the most widely traded spices in Europe. Cinnamon is increasingly used in product innovation and development, especially in light of the increase in popularity of Asian cuisines in Europe. European imports of cinnamon have grown moderately in volume, but their steep growth in value indicates a strong price increase in recent years.

Europe represents a wide and diverse market for cinnamon

The European food and drink market is 1 of the largest in the world. According to Food and Drink Europe, the industry has a turnover of nearly €1.1 trillion. Between 2013 and 2019, the turnover of the European food industry fluctuated. By the end of 2021 the industry showed signs of growth once again. For example, the food and drink industry turnover increased by 3.3% (PDF) in Q4 2021 compared to the previous quarter.

France has the largest food and beverage industry in Europe, accounting for around 19% of the total turnover. It is followed by Germany (17%), Italy (13%), Spain (11%), the Netherlands (7%), Poland (5%) and Belgium (5%).

Cinnamon is 1 of the most used spices in Europe. The largest segments in the food industry use cinnamon. For example, in meat products (the largest segment of the European food industry, at 20% of the total turnover) cinnamon is used in spice mixes. In bakery and farineceous products, cinnamon is widely used in baked desserts, biscuits and cakes, among several other products. It is also extensively used in drinks like herbal infusions/teas and mulled wine, as well as in dairy products. Those segments make up more than half of the total food industry.

A vast European market fuelled by imports

Europe does not produce cinnamon, so it depends on imports. In 2021, Europe imported €129 million or 27 thousand tonnes of cinnamon, both whole and crushed/ground. The value of imports has increased significantly since 2017, at an annual rate of +10% (Figure 2), while the imported volume showed a slight increase of +0.5% during this period (Figure 3). This discrepancy can be explained by the strong increase in global demand for cinnamon, about 8% to 12% annually since 2016, causing cinnamon prices to increase as well.

Around 74% of imports were supplied directly by developing countries in 2021. The remaining imports were mainly intra-European trade. A very small share was registered from other origins.

Source: ITC Trademap / Eurostat, 2022

Source: ITC Trademap / Eurostat, 2022

In 2021, around 54% of Europe’s cinnamon imports consisted of non-crushed or ground cinnamon. This includes both Cinnamomum zeylanicum blume (Ceylon cinnamon), Cinnamomum cassia (cassia) and other smaller species. Non-crushed or ground Ceylon cinnamon accounted for 22% of total European imports; other species, including cassia, accounted for the other 32%.

The ratio of non-crushed or ground versus crushed or ground cinnamon has changed since 2017. This indicates an increase in processing at origin. In 2017, crushed or ground cinnamon accounted for 42% of total European imports in value. This rose to 46% of total imports in 2021.

3. Which European countries offer most opportunities for cinnamon?

The Netherlands, Germany, the United Kingdom, Spain, France and Poland can be considered the most promising European markets for cinnamon exporters in developing countries. These countries have the largest cinnamon imports in Europe, with a significant share of these imports sourced directly from developing countries. These are countries with a sizeable food and beverage industry and developed spice and herb markets – often with traditional use of cinnamon in local recipes.

Table 1: Imports of cinnamon, whole and crushed/ground, top-6 European markets, 2017-2021

Source: Eurostat and ITC Trademap 2022

Netherlands: a European spice hub

The Netherlands is the largest importer of cinnamon in Europe, accounting for around 18% of total European imports in 2021: €24 million or 5,976 tonnes, of which 79% were sourced directly in developing countries. But this share is probably higher, since according to ITC Trademap data 8.6% of supplies come from ‘areas not elsewhere specified’. These areas are likely to include developing countries too. The main developing countries supplying cinnamon to the Netherlands in 2021 were Indonesia (67% of total imports from developing countries), Vietnam (22%), Sri Lanka (4.3%) and Madagascar (3.0%).

The Netherlands is a significant entry point for spices coming into Europe. This is partly due to re-exports to other European countries as well as a strong ingredient-processing industry. The Dutch industry is expected to continue to grow in the coming years.

Royal Polak Spices is by far the largest cinnamon-importing company in the Netherlands. It is also Europe’s leading cinnamon importer, accounting for over 20% of European cinnamon imports. It has been active for 150 years and supplies several food industries and spice companies with a wide range of cinnamon varieties.

Being an important and traditional spice trader, the Netherlands is the main re-exporter of cinnamon in Europe. In 2021 it accounted for 35% of European cinnamon re-exports. It was also the third-largest supplier of cinnamon to Europe, only behind the producing countries Indonesia and Vietnam. Important Dutch spice traders are Catz and Nedspice; smaller traders that also distribute cinnamon are H.J. Albring and Keyzer & Company. A full list of Dutch companies trading spices is available on the website of the Dutch Spice Association.

On the consumer market, Silvo (part of the McCormick group), offering both cinnamon (whole sticks and ground) and spice mixes containing cinnamon, Verstegen and Euroma are among the top spice companies in the Netherlands. These companies normally import spices directly from developing-country suppliers. Cinnamon is commonly used in many biscuits (like speculaas, a spiced shortcrust biscuit) and pastries (like apple pie) in the Netherlands.

The Dutch Spice Association strongly supports sustainable sourcing of spices. The association is committed to Corporate Social Responsibility. A leading group of spice importers in the Netherlands established the international Sustainable Spices Initiative with members from the Netherlands and other countries.

Germany: large consumer market and prominent importer

Germany is the second-largest importer of cinnamon in Europe. German imports are almost as large as Dutch imports and also account for around 18% of total European imports. In 2021, imports totalled €23 million or 5,259 tonnes. A high share of these imports is sourced directly from developing countries, reaching 87% in 2021. Indonesia is also a main supplier of cinnamon to Germany, at 27% of total imports from developing countries. It is closely followed by Vietnam (20%), China (17%), Madagascar (18%) and Sri Lanka (14%). As such, German imports are less concentrated around Indonesia and more equally distributed amongst other global suppliers.

The port of Hamburg is an important hub for spice trade and an entry point into the German food and beverage industry. According to Food and Drink Europe, in 2019 Germany had the second-largest food and drink market in Europe in terms of turnover, just behind France. Large spice companies involved in grinding, packing and other processing, like Fuchs, Husarich, Hamburger Gewürz-Mühle and ENES Gewürze, have a strong presence in the German market and often import spices directly from developing countries.

There are also several relevant spice traders in the country, connecting suppliers to several end-using industries, like Worlée, Schuco, Kräuter Mix, Martin Bauer and AKO The Spice Company. Most German spice companies can be found on the website of the German Spice Association.

Cinnamon finds an interesting consumer market in Germany. Traditional uses include Schneckennudeln (German cinnamon rolls), Franzbrötchen (Northern German cinnamon buns) and Zimsterne (cinnamon star cookies). Germany remains the largest consumer market in Europe in terms of consumer numbers and purchasing power. The country also has the highest GDP in Europe with 1 of the top total purchasing power levels in the region.

Moreover, Germany is a highly important market for sustainable and niche products. For example, the organic food market in Germany is the largest in Europe. As a result, there are several spice companies handling organic-certified cinnamon active in the German market, like Spice Bar, Herbaria, Hartkorn and Grünberg. Specialised shops offering high-quality spices like Gewürze der Welt are also common in Germany.

United Kingdom: diverse food market with growing ethnic and ethical segments

The United Kingdom completes the top-3 importers of cinnamon in Europe. The country accounted for 11% of total European imports, amounting to €14 million or 3,156 tonnes, in 2021. A share of 64% of cinnamon imports is supplied by developing countries, while the remaining share is mainly sourced via the Netherlands and France. Among developing countries, Vietnam (27%) and China (25%) are the main suppliers, followed by Sri Lanka (17%), India (11%) and Indonesia (9.8%).

The United Kingrom (UK) has 1 of the largest consumer markets in Europe. According to the UK Food and Drink Federation (FDF), the country’s food and beverage sector generated about €120 billion in turnover in 2020. Ethnic food plays a very important role in the sector, particularly Indian food.

Cinnamon is a key ingredient in some Indian dishes like garam masala and masala chai (tea), and is 1of the 5 basic whole spices in Indian cooking. Indian is among the most common non-UK nationalities in the UK, at 795,000 inhabitants in 2022. This number continues to rise, as India is also the most common non-UK country of birth for UK citizens. But Indian food is also popular among the rest of the population in the UK. A survey by TasteWise in 2020 discovered that South Indian cuisine, both traditional and fusion-style, is rising in demand by +97% annually, driven by vegan diets (PDF). There are also thousands of Indian restaurants spread throughout different cities in the UK.

Several spice companies in the UK offer cinnamon or spice mixes containing cinnamon, like Schwartz (part of McCormick), British Pepper & Spice and Quay Ingredients. Some of these focus specifically on the ethnic market, like Natco. Most tea and herbal infusion companies, an important product category in the British market, also use cinnamon in their products, like Pukka Herbs and Twinings. For example, cinnamon is an essential ingredient in Indian Chai Tea, which is composed of cinnamon, clove and ginger.

Many UK spice importers also include cinnamon in their product assortment, offering conventional cinnamon, like Rye Spice Co and The Spice Company, or focusing on organic cinnamon, like Organic Herb Trading (origin: Vietnam). The UK organic market is among the largest in Europe and its fair trade market is the largest in the region, making it a very promising market for certified cinnamon. 1 of the main British spice companies in this segment is Bart Ingredients Company.

Spain: dynamic spice processing industry

Spain accounted for around 8.5% of total European cinnamon imports in 2021, at €11 million or 2,299 tonnes. A very large share of Spanish imports was sourced directly in developing countries (88%). Vietnam accounted for more than half of these supplies (27% of total imports from developing countries), followed by China (25%). Smaller but still significant suppliers to Spain are Sri Lanka (17%), India (11%), Indonesia (9.8%) and Madagascar (6.0%).

Spain has an association for spice processors and packers (AEC), consisting of around 20 members, targeting the retail and the food industry. The country has a very dynamic food industry, focusing strongly on formulations for the food industry, seasonings and spices. There are around 110 companies in Spain that specialise in the trade and manufacturing of spices. Most of them are located in the regions of Castilla-La Mancha, Valencia, Murcia, Aragon, Catalonia and Andalusia.

France: a leading European food market

France is also among the main European markets for cinnamon, representing nearly 7.1% of total imports in 2021. French imports amounted to €9.1 million or 1,634 tonnes, 78% of which was sourced from developing countries. Indonesia is the leading supplier to France with a 53% share in total imports from developing countries, followed by Vietnam (15%), Madagascar (15%), Sri Lanka (9.8%) and China (2.8%).

France is a leading food and drink market in Europe, home to interesting and large spice companies that source directly from origin, like Ducros and Cepasco. France also hosts a large number of small and medium-sized companies, which makes the role of traders significant. The French market has large mainstream importers, like SOCO herb, and more specialised importers like L’Arcadie and Comptoir des Épices. More companies involved in cinnamon and other spices are listed on the website of the National Union of Processors of Pepper, Spices, Herbs and Vanilla.

Poland: a gateway into Central and Eastern Europe

Poland ranks among the main European importers of cinnamon and registered the highest growth rate among the largest European markets between 2017 and 2021, at 17% in value. Polish imports accounted for 4.9% of total European imports, totalling €6.3 million or 1,210 tonnes, in 2021. Indonesia is the largest supplier to Poland, accounting for 73% of imports from developing countries, followed by Vietnam (11%), Sri Lanka (6.0%) and India (5.4%).

Polish spice imports are handled by Polish traders like Rolmex and TomPol, as well as by the production facilities of German spice manufacturers located in Poland, most notably AVO. Last but not least, Poland houses the production facilities of the British company AB World Foods, the parent company of the 2 major European brands of Asian sauces and pastes, Blue Dragon and Pataks.

Poland also re-exports cinnamon to other Central and Eastern European countries and functions as a trade hub for these markets. Neighbouring Czech Republic and Romania are among the largest destinations for Polish re-exports. Together, they take up more than one fourth of Polish re-exports. Russia was also among the main destinations for Polish re-exports in 2021, but this changed in 2022 due to EU trade sanctions on Russia. Portugal (the main destination for Polish re-exports, at 25% of total re-exports) and Germany (10%) are also important destinations for Polish cinnamon re-exports.

4. Which trends offer opportunities or pose threats on the European cinnamon market?

The European cinnamon market continues to grow due to the spice’s unique properties, its traditional use in European and Asian cuisines, and its suitability for product innovation and development. The demand for sustainably sourced spices also shapes the market for cinnamon, with organic certification growing at an especially fast rate. Organic certification is often associated with fair trade certification. In addition, the trend for single-origin spices gives you an opportunity to tell your story as a cinnamon exporter.

Cinnamon is a key ingredient in product formulation and innovation

Cinnamon is a traditional ingredient in several European dishes, pastries and beverages. It is also a key ingredient in new product launches and product development. Cinnamon can be found among other botanical extracts in many product launches of dairy products, baked goods or snacks, sauces and plant-based alternatives. Innovations in beverages have especially benefitted from cinnamon. Due to its cooling and spicy effect, cinnamon elevates the sensory experience. Austria Juice indicates that spicy and earthy flavours, like cinnamon, are increasingly finding their way into beverage development. There have been many product launches in recent years. For example, UK-based company Aimia Foods recently launched a cinnamon syrup that can be used in all types of drink preparations and which contains only natural ingredients.

The increasing demand for Asian food in Europe also influences the use of cinnamon in product development. Many Asian and South Asian recipes use cinnamon as an ingredient. For example, cinnamon is used to add a sweet and spicy taste to Indian curries. Large retailers sell curry paste (for example Geo Organics Curry paste Indian Madras at Ekoplaza in the Netherlands, several curry products at Kaufland in Germany), ready-to-eat curry dishes (for example Waitrose’s Fruity Chicken Curry in the UK) and other curry ingredients using cinnamon.

In another example, Ayurvedic tea blends like those offered by Yogi Tea are highly popular in Europe. Several of Yogi Tea’s blends have cinnamon as a key ingredient, including the Classic blend. Indian Chai/Masala Chai blends are also highly popular. In fact, the number of chai-based product launches has doubled in Europe. There are many popular brands available to consumers, ranging from mid-range to high-end products, like Pukka’s Original Chai and Clipper’s Classic Chai Tea. Chai is now also expanding into the ice cream sector.

Single origin grows as a marketing and differentiation tool in Europe

Single origin is a well-known concept in products like coffee and chocolate, and is increasingly used in the European market for spices. Single origin highlights spices with unique characteristics and flavours that are sourced from a specific country, region and even farm or producer. Single-origin spices are not mixed or blended with spices from other origins.

As customers seek premium and higher-quality products, they are also increasingly interested in the origins of these products. Consumers have also become more interested in the agroclimatic features of production areas and the stories of producers and their communities. For spices like cinnamon, single origin also highlights unique components and unique flavours that can only be grown in a specific region.

For importers and spice companies, single origin also means increasing traceability, translated into consistent quality and product safety. This is specifically relevant for organic spices, where identity preservation and cross-contamination prevention are crucial.

Many companies market single-origin recognition in cinnamon. Dutch spice company Bold Spices sells cinnamon from Vườn Quốc gia Hoàng Liên in Northern Vietnam. This cinnamon comes from the bark of the Cinnamomum loureiroi tree, a variety of cassia, which has a high concentration of essential oils and a pronounced flavour. Others are Danish company Mill & Mortar, whose ALBA quality, organic and fair trade-certified cinnamon comes from forest garden harvests in Sri Lanka, and UK-based Rooted Spices with single-origin Ceylon cinnamon from a Kandyan Forest Garden in Sri Lanka’s Central Highlands.

In the cinnamon market, origin also distinguishes different cinnamon species and their quality. This is particularly the case for Ceylon cinnamon. In 2022, Sri Lanka received its first-ever Protected Geographical Indication (PGI) certification from the European Commission through Regulation (EU) 2022/144 (PDF). The PGI differentiates Ceylon Cinnamon on the EU market from lower-quality substitutes, and recognises the exclusive quality coming from the cinnamon’s specific origin and the associated harvesting and processing know-how and techniques. The botanical names Cinnamomum zeylanicum and Cinnamomum ceylanicum can still be used on the label of products from other origins, but the country of origin outside Sri Lanka must be also indicated.

Figure 4: Single-origin cinnamon from Rooted Spices, UK

Source: Rooted Spices

Growing European demand for sustainably certified cinnamon

Sustainable sourcing is a growing trend in Europe. As a supplier, you will be increasingly faced with sustainability requirements from your buyer. Organic certification is growing significantly for spices. Growth is driven not only by consumer demand, but also by European buyers that are requiring more traceability and preventive actions to lower cross-contamination risks in their supply chains. In the case of cinnamon, organic certification is commonly paired with fair trade certification, which targets social sustainability objectives.

The global organic spice market was worth €17 billion in 2021 and is estimated to reach a retail sales value of almost €20 billion in 2026. This means an annual growth rate of 7.5% between 2021 and 2026. North America and Europe are the largest markets for organic spices. Within Europe, the growth rate of organic spice consumption is forecast to be particularly high in Sweden and the UK (more than 5.5% per year over the next 7 years). There are several spice companies in Europe that focus only on organic ranges. A few of the many European companies offering organic cinnamon are: Herbaria from Germany (Organic cinnamon from the Sumatra island, Indonesia), Cook from France (Organic Ceylon cinnamon) and Sonnentor from Austria (Organic Ceylon cinnamon).

The growth in organic spices reflects the overall growth in organic sales for food and beverages in Europe. Overall retail sales in Europe reached about €52 billion in 2020, making it the world’s second-largest region when it comes to organic retail sales (after North America). The largest national markets for organic foods are Germany (29% of the European market in 2020 with organic retail sales exceeding €15 billion), France (at nearly €13 billion) and Italy (at €3.9 billion).

Source: FiBL, 2022

Cinnamon is 1 of the most commonly traded Fairtrade-certified spices. Fairtrade is normally paired with organic certification and there are several European spices companies offering cinnamon with these 2 certifications. For example, Italian company Cannamela (Italy) has a whole range of organic and Fairtrade-certified spices from Sri Lanka that includes cinnamon, and Bart Spices offers organic and Fairtrade-certified Ceylon cinnamon.

In 2021, there were more than 120 Fairtrade-certified cinnamon traders in Europe and over 80 Fairtrade-certified cinnamon suppliers around the world. Most of the suppliers are located in Sri Lanka (49 suppliers), showing the relationship between the Ceylon cinnamon and niche markets, followed at a distance by India (25 suppliers) and Madagascar (4 suppliers). Fairtrade finds its largest end market in the United Kingdom, but the main buyers operating in Fairtrade-certified cinnamon are also located in Germany, the Netherlands, Switzerland and France.

This study was carried out on behalf of CBI by Gustavo Ferro.

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