The European market potential for dried chillies

The popularity of international cuisine and spicy food contributes to the increasing demand for dried chillies on the European market. Veganism has also contributed to the increasing consumption of chillies, as they serve as taste enhancers in vegan meals. European, dried chilli consumers prefer mild chilli varieties and are showing interest in authentic and new chilli flavours. 

Spain is the largest dried chilli importer in Europe, but the market is largely concentrated around imports of cheap dried chillies from China. Therefore, new developing-country suppliers can find opportunities in less concentrated markets such as Spain, Germany, the United Kingdom, Hungary, the Netherlands and France.

1. Product description

Dried chillies are obtained by drying the fresh ripe fruit of the paprika, which is a plant from the Capsicum genus. The most widely spread species of Capsicum genus used for the production of dried chillies is Capsicum annuum, which includes three main groups of varieties: longum (elongated shape), grossum (bell-shaped) and abbreviatum (round to flattened shape). Aside from Capsicum annum, other Capsicum species are also used for drying, including Capsicum frutescens, Capsicum baccatum, Capsicum chinense and Capsicum pubescens.

Figure 1: Dried cayenne chillies from Kenya

Source: GloballyCool, September 2024

In botanical terms, chilli peppers and sweet peppers are the same species, but the difference is in the presence of a component called capsaicin, which gives spicy heat (pungency) to chilli peppers.

Although chilli pepper originates in South America, it is now widely grown on all continents. Currently, Asian (especially Indian) and African production of dried chillies is significantly larger than production in South America. Still, European consumers are more familiar with the names of South American cultivars (such as Ancho, Cayenne, Chipotle, Jalapeño, Piri Piri, etc.) compared to Asian cultivars (such as Sannam, Teja, Byadgie or Wonderhot).

Figure 2: Dried chilli flakes from Sri Lanka

Source: GloballyCool, September 2024

Dried chillies can be naturally sun-dried or dehydrated in hot air circulation tunnels. Dried chillies are produced in different forms, but there are three main forms: as a whole, crushed flakes and ground powder. Crushed or ground chillies can be produced with or without seeds.

This study uses two Harmonised System (HS) codes to analyse the dried chillies trade. 

Table 1: HS codes for dried chillies

The trade data presented in this report cover both whole and crushed/ground chillies, unless otherwise specified. In practice, almost all traded volumes concern unground chillies. Codes 090421 and 090422 also include a small portion of dried sweet chillies. 

2. What makes Europe an interesting market for dried chillies?

Europe depends on imports of dried chillies, as local production in Spain, Romania and Hungary is not enough to satisfy European demand. Europe’s market for dried chillies is the second-largest worldwide, behind Asia. Demand is driven by the large food industry, which uses dried chillies in a wide variety of processed foods, sauces and seasonings.

The enormous European food industry offers broad applications

The European food and drink market is one of the largest in the world. According to Food and Drink Europe, the industry has a turnover of nearly EUR 1.1 trillion. Within the food industry, the segments for meat products and various other food products are particularly important for dried chillies, making up 36% of the total food industry.

Source: Food Drink Europe, 2023

European, dried chili imports are significant and growing

Europe is the second-largest importer of dried chillies in the world – after Asia but ahead of the USA – accounting for around 40% share of total world’s imports. As European production of dried chillies is not self-sufficient, it depends on imports. 

Apart from a small dip in 2022, European imports of dried chillies grew at an average annual rate of 5.5% between 2019 and 2023.

The statistics above include all types of dried ‘capsicum’ species. Although precise statistics are not available, an estimated 80% of all quantities consist of spicy dried chilli peppers, while the remaining 20% consist of dried sweet peppers.

Source: GloballyCool, based on UN Comtrade statistics, August 2024

Around 65% of European imports come directly from developing countries. The largest share of the intra-European trade consists of re-exports of dried chillies that originally came from developing countries. Europe produces less than 80 thousand tonnes of dried chillies and other dried paprika, 50% of the imported quantities. The leading producers are Romania, Hungary and Spain – but these countries have a sizeable domestic market. In Romania and Hungary, dried chilli pepper and paprika are traditionally used in the cooking of meat, vegetable and bean stews, with a large share of those products actually consisting of dried sweet peppers.

Whole dried chillies account for 51-57% of the total volume of dried chillies imported from developing countries each year, while the remaining 43-49% consists of crushed and ground chillies. In intra-European trade, crushed or ground chillies account for a much higher share, approximately 90% of imports versus 10% of imports of whole chillies. This indicates that a significant quantity of whole dried chillies is processed (crushed, ground and mixed) within Europe after importing.

In the next five years, European imports are likely to increase at much the same annual rates as in previous years, with trends such as interest in health fuelling consistent growth in European demand. The highest growth is expected for the following types:

• Dried chillies with medium pungency, as extremely hot chillies are generally not popular among European consumers.
• New and exotic chilli varieties that add flavour complexity.

While other world regions may offer higher growth potential, European markets offer an interesting price advantage over other markets in high-quality and sustainably produced and traded dried chilli supplies.

3. Which European countries offer the most opportunities for dried chillies?

As Europe’s main importer of dried chillies, Spain is an interesting focus market. However, Spain consumes a relatively small share of imported dried chillies using imported chillies for further processing, blending and re‑exports. Germany, the United Kingdom, the Netherlands, France, and Poland are even more promising leading markets for value-added chillies with a relatively large consumption and import share from developing countries.

Source: GloballyCool, based on UN Comtrade statistics, August 2024

Spain: Europe’s largest importer of dried chillies

Spain is Europe’s largest importer of dried chillies, recording its highest-ever import volume of more than 75 thousand tonnes in 2023. Spain’s import volumes increased at an annual rate of almost 7.4% between 2019 and 2023.

In addition to being a large importer, Spain also produces and exports considerable volumes of dried chillies. Spain is the fourth-largest exporter of dried chillies in the world, after India, China and Mexico.

Around 75% of dried chillies imported into Spain are whole chillies, which are further crushed or ground and re-exported in the form of powder or flakes. The main target market for Spain’s exports/re-exports of (mostly crushed/ground) chillies is the United States, with an export share of almost 30%, followed by the United Kingdom and Germany (both 9%). 

Spanish imports of dried chillies are very concentrated, with almost 80% of all dried chillies sourced from China. This is because the Spanish industry has invested in dried chilli production in China. While Peru was long Spain’s second supplier, hovering at 10-15% for years, it was overtaken by Zambia in 2023, with an 11% share.

For developing-country suppliers, Spain is an interesting target market mainly because of its hub function, as local consumption of dried chillies is less prominent. Although very popular in Spanish cuisine, chilli peppers are predominantly consumed fresh, and these are available all year round. Spain is also the largest exporter of fresh chillies in the world. Domestic consumption of dried chillies in Spain accounts for around 1.2 thousand tonnes (according to FAOSTAT and international trade data), which is far behind Germany. 

The most consumed types of dried chillies in Spain are moderately hot cayenne peppers. Popular cultivars used for drying in Spain include La Nora (round) and Choricero (famous for its use in the production of chorizo sausages). The most famous type of Spanish chilli is Ibarra chilli, but it is commonly produced as pickled and not dried. 

There are around 110 companies in Spain specialised in trading and manufacturing dried chillies and other spices. Most of them are located in regions of Castile-La Mancha, Valencia, Murcia, Aragon, Catalonia and Andalusia.

In the retail segment, dried chillies are sold mostly under the private labels of Spanish retail chains, such as Mercadona (Hacendado), Carrefour (Carrefour Classic), Alcampo (Auchan), Lidl (Kania), Eroski (Eroski) and Dia (discount label). Independent chilli brands in Spain include Ducros (acquired by McCormick), Carmencita (by Jesús Navarro) and Dani. Traders of dried chillies in Spain include Ramón Sabater, Dani, Caylan, Paprimpur, Carmencita, Juan José Albarracín and Juan Navarro.

Spain has an association for spice processors and packers (AEC), consisting of around 20 members targeting the retail and food industry. The country has a very dynamic food industry, focusing strongly on formulations for the food industry, seasonings and spices. 

Several Spanish importers have a considerable processing capacity and supply many other European countries. Common processing activities performed by Spanish companies include grinding and mixing whole chillies and added-value processing, such as the production of oleoresins. The Spanish supply of processed chillies (usually in the form of powder) often contains mixed chillies of different origins. If you are targeting the processing segment, the dynamic Spanish industry represents interesting opportunities for you.

Spain is the main trader of South American types of chillies in Europe, such as Amarillo Mirasol, Poblano or Guajillo. Due to being highly specialised in the trade of chillies, Spanish traders are constantly looking for new and ‘exotic’ varieties. This explains the increasing imports from emerging origins such as Zimbabwe, Zambia, Malawi, Senegal and Uganda.

Germany: a large food-processing industry

Germany offers good opportunities as the largest consumer market of dried chillies in Europe. Imports fluctuated between 2019 and 2023, going from 24.0 thousand tonnes in 2019 to peak at 28.1 thousand tonnes in 2020, before decreasing to 23.6 thousand tonnes in 2023.

The market in Germany is less concentrated than in Spain, with 45% of supplies coming from China. However, its second-largest supplier is Spain, with a share of almost 28%, and some of these Spanish exports include re-exported and processed dried chillies from China. In 2023, other suppliers included Brazil (7.8% of total German imports), whose exports to Germany have grown at a strong annual rate of 19% since 2019, Mexico (3.4% share), the Netherlands (3.4%) and Türkiye (2.8%).

Dried chillies and dried sweet peppers are the second-largest imported spice category in Germany. Among spices, only ginger and pepper imports were higher. While imports from Spain are mainly crushed chillies, chillies imported from developing countries are mostly in whole form. German companies process them further either by simple crushing and packing or use as ingredients in spice blends and seasoning preparations. The German meat processing industry uses a significant share of dried chillies, especially for the production of sausages. 

Almost 100 companies are members of the German Spice Association. These companies are primarily engaged in refining spices and the production of spice blends, spice preparations and other seasoning ingredients, with a combined turnover exceeding €542 million in 2020. There are also several relevant spice traders in the country, connecting suppliers to various end-using companies like Worlée, Schuco and AKO The Spice Company.

Of the independent brands, Fuchs Group (officially called DF World of Spices) has the largest retail market share. It has several brands of spices, including chillies, such as Fuchs, Ostmann, and BioWagner (an organic brand). In addition to its own brands, it also packages pepper and other spices for several German private labels. Fuchs is the largest European spice manufacturer and the leading privately owned global spice company.

The main private labels in Germany are Kania (of discounter chain Lidl), Le Gusto (by Aldi Süd), Portland (by Aldi Nord), Gut & Günstig (by Edeka), and REWE and REWE Beste Wahl (by REWE).

Apart from the large consumption of dried chillies by the meat processing industry in Germany, at-home consumption is also increasing. Wide presence of ethnic cuisines is stimulating demand of chillies as German consumers also like to try new dishes at home. The usage of chillies in innovative recipes is popularised by famous German celebrity chefs such as Stefan Marquard, Tim Mälzer or Alexander Herrmann.

Moreover, Germany is a highly important market for sustainable and niche products. Besides companies offering high volumes, Germany also provides opportunities to suppliers of certified and high-quality dried chillies. For example, the organic food market in Germany is the largest in Europe. As a result, there are several spice companies handling organic-certified chilies and chili-containing mixes active in the German market. They include Herbaria, Hartkorn (which offers whole Bird’s Eye chilies in a ceramic pot) and Grünberg. 

The United Kingdom: the leading European importer of Indian chillies

The United Kingdom is the third-largest importer of dried chillies in Europe. Imports remained relatively stable between 2019 and 2023, amounting to more than 15 thousand tonnes per year. 

The United Kingdom’s imports are influenced significantly by Indian supplies. This is mainly due to the country’s large Indian community, as dried chillies are often used in traditional Indian recipes. Indians are one of the largest non-UK nationalities in the UK, with a population of around 795,000. The United Kingdom imports around one-third of its dried chillies from India, second only to Spain, which accounts for almost 44% of total imports. Another important supplier is China, with an 18% share of total imports.

In the retail segment, the private labels of retail chains like Tesco, Sainsbury’s, ASDA, and Morrisons have the largest market shares for dried chillies. Two leading independent brands selling dried chillies are Schwartz, owned by McCormick, and Bart, which is part of the Germany-based Fuchs Group. If you supply consistent quality at large volumes, this type of buyer could offer opportunities for you in the UK market.

In addition to this, the UK has more than 80 importers of dried chilli pepper, according to industry estimates, some of which trade in small quantities. If you are a supplier of smaller quantities and specific varieties, the United Kingdom may therefore also be an interesting market for you. Some importers specialise in supplying ethnic (mostly Asian) shops such as TRS, Interlink Direct, Fudco, East End Foods and Asco Foods. Several of the larger companies are members of the Seasoning and Spice Association.

The Netherlands: re-exporter and main European market for Thai dried chillies

The Netherlands is a major importer of dried chillies. Its imports have fluctuated slightly, peaking at 15 thousand tonnes in 2021 before decreasing back to the 2019 level of 11 thousand tonnes in 2023. The Netherlands plays an important role as a trade hub in Europe, as it re-exports around half of all imported dried chillies to other European countries.

The origins of Dutch imports of dried chillies are quite diverse since there is no particular country that strongly dominates the supply. The Netherlands is the largest European destination for imports of dried chillies from Thailand. This is because the Netherlands is home to several specialised Thai food and spice importers, such as the Asian Food Group. 

In 2023, 15% of total imports came from Thailand, second only to Spain, at almost 33%. Other important suppliers are Germany (9.9% of total imports), Belgium and Mexico (both 9.0%), India (8.6%) and China (8.1%). Due to its diversified supply, the Netherlands offers particularly good opportunities for emerging suppliers.

Figure 6: Ground chilli products in a mainstream supermarket in the Netherlands

Source: GloballyCool, August 2024

Major retail chains like Albert Heijn (AH label), Aldi (The Kruidencompany label) and Jumbo dominate dried chilli retail sales in the Netherlands. Silvo (part of the McCormick group), Verstegen and Euroma are among the top spice companies in the Dutch market. These companies import spices directly from developing countries. Important Dutch spice traders include Catz and Nedspice; smaller traders also distribute chillies, such as companies like H.J. Albring and Keyzer & Company. A full list of Dutch companies trading spices is available on the website of the Dutch Spice Association.

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

France: a small producer and interesting market

French imports of dried chillies have grown steadily, from 6.1 thousand tonnes in 2019 to 7.4 thousand tonnes in 2023. Imports increased by an average of almost 5% annually between 2019 and 2023. France’s leading supplier of dried chillies was Spain, accounting for almost 55% of total imports, followed by Germany (10%), the Netherlands (7.4%) and China (5.1%). France is the only European country with significant imports of dried chillies from Tunisia, which accounted for 2.9% of total French imports in 2023. However, this percentage has been declining for four years now.

Apart from imports, France produces smaller quantities of dried chillies. An especially important chilli variety in France is a medium-heat Espelette pepper (Piment d'Espelette in French), which has a designated protection of origin. According to the Association of Espellete chillies there are 160 producers producing around 200 tonnes of dried chillies of the Espellette variety.

Most retail chains in France sell dried chillies under their own private labels, including Carrefour (Carrefour and Carrefour Bio labels), Leclerc (Rustica and eco-labels), and Auchan (Auchan and Auchan bio labels). Leading independent spice brands that also sell dried chillies in France are Ducros (now owned by McCormick) and Cepasco. Some other brands are Fuchs (German brand), Sainte Lucie, Albert Menes and Espig. French retailers select packers of private labels in competitive tender processes, so some of the private label pepper is packaged in other countries. 

France is likewise characterised by 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 dried chillies and other spices are listed on the website of the National Union of Processors of Pepper, Spices, Herbs and Vanilla.

Poland: a fast-growing importer and gateway into Central and Eastern Europe

Poland is also an important importer of dried chillies. Polish imports have shown fairly consistent growth, from 5.2 thousand tonnes in 2019 to peak at 7.5 thousand tonnes in 2022, declining slightly to 7.2 thousand tonnes in 2023.

Between 2019 and 2023, Polish imports increased by almost 8.5% per year. In 2023, Poland’s largest supplier was China, with an import share of almost 44%, followed by Spain (33%), Mexico (11%) and Peru (3.2%).

Polish spice imports are carried out by Polish traders like Rolmex and TomPol, as well as by production facilities of German spice manufacturers in Poland, most notably AVO. Last but not least, Poland is home to production facilities of the British company AB World Foods, the parent company of, among others, the two major European brands of Asian sauces and pastes, Blue Dragon and Pataks. While AB World Foods also has production facilities in the United Kingdom, it is estimated that over half of the European continent's production comes from facilities in Poland.

Poland re-exports almost 30% of its dried chillies to other Central and Eastern European countries, such as Romania and the Czech Republic. However, the largest destination for Polish dried chilli re-exports is France (25% share). The Netherlands and Portugal are also important destinations, both with an 11% share. 

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

The increasing interest in international ethnic cuisines combined with the need for stable and sustainable sourcing are the leading driving forces behind the growing consumer interest in dried chillies in Europe. To find out more about general trends, read our study about trends on the European spices and herbs market.

Consumers are getting better informed about the chillies they eat.

Consumers are becoming familiar with different chilli flavours. Research by Innova Market Insights in 2024 reported a rise in demand for hot flavours. The demand for hot flavours has also been accompanied by an increase in consumer interest in different chilli types. Flavour company Wixon reported that jalapeño is the most prolific pepper variety in this category, but that interest in chilli varieties that add heat and depth of flavour, such as aji amarillo, guajillo, habanero, and poblano, is also on the rise.

Consumer knowledge is also related to the clean label trend. Consumers are demanding cleaner-label products made with only natural and recognisable ingredients. In the selection of dried chillies, consumers prefer products that contain only dried chillies and nothing more. Clean-label dried chillies usually refer to the absence of colour preservation additives (such as ethoxyquin) and anticaking agents (such as Silicon Dioxide). Some companies such as Spanish Evesa actively promote dried chilli products as ‘clean label’.

Focus on health also attracting consumers to dried chillies

As European consumers become more health-conscious, they are increasingly incorporating chilli peppers into their diets to benefit from the health-enhancing properties. Chilli peppers contain capsaicin, known for its metabolism-boosting and thermogenic effects. It can aid weight management by increasing calorie burn. Studies also link capsaicin to improved cardiovascular health, as it may help lower blood pressure and reduce cholesterol levels. This certainly adds to chilli’s appeal as a functional food for those looking to boost long-term health.

Beyond weight management, capsaicin in chilli peppers is believed to have anti-inflammatory benefits and pain-relieving effects, which appeal to consumers interested in natural health solutions. Additionally, chilli’s high vitamin C content supports immune health, while its antioxidant properties fight cellular damage. These benefits, coupled with a growing interest in global cuisine, are making chilli a popular addition to European kitchens, leading to a surge in demand for not only dried chillies but also fresh chillies and chilli sauce. 

The heat level of dried chillies is decreasing

While demand for chillies remains strong, there is a noticeable trend toward milder heat levels in consumer preferences, particularly in Western markets. Consumers in Europe, for example, increasingly seek out spices that add flavour complexity rather than intense heat. This shift may be influenced by growing awareness of health and wellness trends, where consumers are exploring balanced flavours in food rather than extreme spiciness. Additionally, European consumers are favouring chilies with unique flavour profiles that enhance dishes without overpowering them, such as mild varieties with fruity or smoky notes.

According to market research company Innova Market Insights, Asia and Western Europe are leading spice and seed flavour innovation. The research also notes that new product development globally is largely focused on generic chilli flavours, which suggests a preference for familiar, versatile flavours over very spicy or niche varieties. This is evident in product categories such as ready-made sauces, snack foods, and meat seasonings, where mild to medium heat levels are preferred to appeal to a broader consumer base.

In response, producers and exporters of dried chillies are adapting by offering varieties with reduced heat, such as milder jalapeño, ancho, and guajillo peppers. These varieties still provide the depth of flavour desired in culinary applications but are more accessible to consumers who may find extremely hot chillies too intense. This trend offers exporters opportunities to market unique, less pungent varieties, tapping into the demand for flavour innovation in Europe while catering to evolving consumer tastes.

Initiatives to fight fraud in the production of dried chillies are increasing

Due to the increasing popularity of different chilli flavours, European producers are faced with the offer of wrongly declared types of chillies. Also, additives such as colour enhancers (such as Sudan dyes) and flavour enhancers (such as oleoresins) are sometimes not declared, which is considered fraud. To combat adulteration, the European Spice Association has published an Adulteration Awareness document, and the Food and Drink Federation has published Guidance on Authenticity of Herbs and Spices.

Dried chillies are among the focus products for the EU-wide survey about the authenticity of herbs and spices published in 2021. The goal of the study was to protect consumers from misleading and potentially unsafe products. It looked at six different herbs and spices. The study revealed that the percentage of samples deemed at risk of adulteration for paprika/chilli was lower than for other products, at 6%. By comparison, 17% of the samples for pepper were deemed at risk. 

The Mexican Grocery Processors Association (Canainca) launched an initiative for new EU labelling rules to clarify the Mexican origin of dried chillies exported to Europe. According to Canainca, “many Turkish and Asian processors are exporting fake Mexican chilli to the EU using its variety designations, such as chipotle and jalapeño, and national symbols, such as the mariachi hat, on its labelling, trying to take advantage of the global success of the traditional Mexican recipes.”

GloballyCool updated this study on behalf of CBI.

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