Abstract
The $5 billion market for butter, margarine, and table spreads is challenged by rising costs for suppliers. In addition, competition from healthier alternatives like olive oil are effecting the market for butter. Mintel examines these market challenges and identifies opportunities for suppliers, marketers, and retailers to increase sales. Mintel also investigates:
- Which products are most affected by raw materials costs and what trends in retail may force the price of butter up in the next year
- How alternatives to butter, including products and preparation methods, are affecting sales and why some healthier for you spreads are doubling sales while similar spreads are seeing sales declines
- How past sales trends for butter and margarine differ from today' s trends, and what future sales trends will look like
- How per capita butter consumption has changed in light of recent health trends, and how suppliers are responding with new products
Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Health trends challenge market even as rising dairy costs create sales spikes
- Competition from healthier alternatives and market' s own pricing
- Butter loses share to margarine
- Discount/supercenters grow on convenience and pricing
- Concerns about health and weight
- Heart disease increasing among women
- Consumers concerned about economy and food prices
- Healthy positioning doesn' t guarantee success
- Land O' Lakes changes packaging for butter in multiple ways
- Healthy products get healthier and more convenient for cooking/baking
- How respondents use butter and margarine
- Respondents' brand preferences
- Attitudes and changing opinions on healthy eating
- Significant differences in respondents' use by race/ethnicity
- Higher usage in blacks and Hispanics
- Income and butter/margarine use
- Health concerns in blacks and Hispanics
- Market Size and Forecast
- Key points
- Mature market chained to materials costs, but innovation can help
- Figure 1: Total U.S. sales and forecast of butter/margarine and table spreads at current prices, 2002-12
- Figure 2: Total U.S. sales and forecast of butter/margarine and table spreads at inflation adjusted prices, 2002-12
- Wal-Mart sales
- Competitive Context
- Cooking sprays, cooking oil, grilling offer alternatives to
butter/margarine for cooking
- Figure 3: FDMx sales of olive oil, 2002-07
- Drive against use of rBST in milk production likely to increase price of butter, and possibly lower use
- Segment Performance
- Key points
- Consumers not trading butter for margarine/table spreads
- Figure 4: U.S. FDMx sales and forecast of butter and margarine/table spreads, by segment, 2002-12
- Figure 5: U.S. FDMx sales of butter and margarine/table spreads, 2005-07
- Segment Performance--Butter
- Key points
- Milk prices directly affect butter sales and pricing
- Prices spike in 2004...
- ...leading to over-production
- Butter prices increase but volume sales decline
- Figure 6: FDMx value and volume sales of butter and average price per pound, 2002-07
- Figure 7: FDMx sales of butter at current prices, 2002-12
- Figure 8: FDMx sales of butter at constant 2007 prices, 2002-12
- Segment Performance--Margarine and Table Spreads
- Key points
- Less volatility, but also declining sales as consumer habits change
- Consumers embrace healthier cooking methods
- Economic uncertainty may result in more cooking
- Figure 9: FDMx dollar and volume sales of margarine/spreads/butter blends and average price per pound, 2002-07
- Figure 10: FDMx sales and forecast of margarine and table spreads at current prices, 2002-12
- Figure 11: FDMx sales and forecast of margarine and table spreads at constant prices, 2002-12
- Retail Channels
- Key points
- Discount/supercenters continue to grow sales
- Convenience stores and drug stores the biggest losers
- Figure 12: U.S. sales of butter and margarine/table spreads, by retail channel, 2005-07
- Retail Channels--Supermarkets and Other Food Stores
- Key points
- Growing food prices only reason for growing sales
- Continued consolidation, though slowing
- Figure 13: U.S. sales of butter and margarine/table spreads at supermarkets and other food stores, 2002-07
- Retail Channels--Discount/Supercenter/Warehouse Club
- Key points
- Supercenters offer multiple levels of private label pricing
- Sales likely to continue to cannibalize other channels
- Figure 14: U.S. sales of butter and margarine/table spreads, at discount/supercenter/warehouse clubs, 2002-07
- Retail Channels-- Convenience Stores/Drug Stores and Other
- Key points
- Not the only 24-hour retail
- Figure 15: U.S. sales of butter and margarine/table spreads, at c-stores/drug stores and other, 2002-07
- Retail Channels--Natural Channel/SPINS
- Figure 16: Natural product supermarket retail sales of butter and spreads, at current and constant prices, 52 weeks ending march 22, 2006-08
- Natural channel sales by segment
- Figure 17: Natural product supermarket retail sales of butter and spreads, by segment, 52 weeks ending march 22, 2006-08
- Natural supermarket channel sales of butter and spreads
- Butter sales
- Figure 18: Natural product supermarket retail sales of butter at current and constant prices, 52 weeks ending march 22, 2006-08
- Organic butter sales
- Figure 19: Natural product supermarket retail sales of eggs, by organic, 2006-08
- Spread sales
- Figure 20: Natural product supermarket retail sales of spreads at current prices and constant, ending march 22, 2006-08
- Organic spreads sales
- Figure 21: Natural product supermarket retail sales of spreads, by organic, 2006-08
- Brand tables
- Butter and spreads
- Figure 22: Manufacturer brand natural supermarket sales of butter and spreads, 2006 and 2008
- Market Drivers
- Lifestyle and attitude changes impact this market
- All good things in moderation redefines butter
- There is more to food than fat and calories
- Figure 23: U.S. per capita butter consumption, 2000-06
- Health concerns are still an issue in this market
- Overweight and obesity are serious problems in the U.S.
- Are consumers changing their diets?
- Figure 24: Adult population over age 20 and adult obese population, estimates, 2002-07
- Figure 25: Share of children aged 2-19 considered overweight, by age, 1971-2004
- Figure 26: Reason to watch diet, 2005 and 2007
- Heart health concerns hit women (and this market)
- Figure 27: Prevalence of cardiovascular diseases among adults aged 20 and older, by type, by gender, 2005
- Figure 28: Prevalence of cardiovascular disease in Americans aged 20 and older by age and gender, NHANES 1999-2002
- Commodity prices continue to rise
- Driving up food prices
- Figure 29: Changes in food prices, at and away from home, 2004-08
- Leading Companies
- Key points
- Little overlap between segments
- Healthier for you suppliers not guaranteed success
- Private label not immune
- Figure 30: Manufacturer sales of butter and margarine/table spreads at FDMx, 2005-07Brand Share--Butter
- Key points
- Fragmented supply structure
- Organic butter sales inconsistent
- Figure 31: FDMx brand sales of butter in the U.S., 2005 and 2007
- Brand Share--Margarine and Table Spreads
- Key points
- Premium spreads with plant sterols for lowering cholesterol levels are not all succeeding
- Smart Balance is succeeding
- How is Smart Balance succeeding?
- Figure 32: Selected functional spreads prices in Indianapolis, indiana, april 2008
- Olive oil spreads grow
- Figure 33: FDMx brand sales of margarine and table spreads in the U.S., 2005 and 2007
- Brand Qualities
- Do consumers want to buy food products that seem like pharmaceuticals?
- How is Smart Balance winning consumers?
- What are well established brands doing to drive perceptions?
- Margarine brands try to replace butter in baking, cooking, or table
- Butter brands struggle with private label for share
- Land O' Lakes offers a consistent image to butter consumers
- Innovation and Innovators
- Land O' Lakes half-pound packaging and half sticks add convenience
- Adapting to regional preferences
- Prominent omega-3 labeling
- Healthy spreads made convenient for baking
- Advertising and Promotion
- Overview
- Individual campaigns
- Unilever
- Figure 34: I Can' t Believe its not butter #1, 2007
- Figure 35: I Can' t Believe its not butter #2, 2007
- Country Crock
- Figure 36: Shedd' s spread country crock ad, 2007
- Smart Balance (formerly GFA)
- Figure 37: Smart balance ad #1, 2007
- Figure 38: Smart balance ad #2, 2007
- Butter and Margarine Usage
- Trended usage of butter, margarine, and margarine spreads
- Figure 39: Usage of butter, margarine, and margarine spreads for 2003, 2005, and 2007
- Trended household volume usage of butter and margarine
- Trended volume usage of butter and margarine/margarine spread
- Figure 40: Usage of butter, margarine, and margarine spreads, by amount, 2003, 2005, and 2007
- Current usage of butter, margarine, and spreads
- Figure 41: Usage of butter, margarine, and spreads, by gender, March 2008
- Preferences for everyday use
- Figure 42: Everyday usage of butter, margarine and spreads, March 2008
- Product Preferences Based on Type of Food Preparation
- Preferences for baking
- Figure 43: Usage of butter, margarine, and spreads for baking, March 2008
- Preferences for stove-top cooking
- Figure 44: Usage of butter, margarine, and spreads for stove top cooking, by gender, March 2008
- Brands
- Popularity of brands
- Brand preferences by household income
- Figure 45: Use of butter brands, by household income, May 2006-June 2007
- Brand preferences by region
- Figure 46: Use of butter brands, by region of residence of respondent, May 2006-June 2007
- Margarine and margarine spreads
- Figure 47: Use of margarine/margarine spread brands, by household income, May 2006-June 2007
- Attitudes and Motivations
- General behaviors about and attitudes towards cooking habits
- Key findings
- Figure 48: Frequency of cooking, by gender, March 2008
- Figure 49: Frequency of cooking, by age, March 2008
- Beliefs and behaviors related to butter use
- Key findings
- Beliefs and behaviors related to margarine use
- Key findings
- Consumer Behavior: Switching Products
- Key findings
- Behavioral changes by age
- Behavioral changes by income
- Figure 53: Behavioral changes with regard to butter use, by household income, March 2008
- Consumer Attitudes: Cooking, Shopping, Flavor, and Health
- Consumer attitudes about cooking and shopping
- Key findings
- Figure 54: Attitudes about shopping and cooking, by gender, March 2008
- Figure 55: Attitudes about shopping and cooking, by age, March 2008
- Consumer attitudes about flavor
- Key findings
- Figure 56: Butter and margarine flavor preferences, by gender, March 2008
- Figure 57: Butter and margarine flavor preferences, by age, March 2008
- Health beliefs
- Key findings
- Figure 58: Health beliefs about cooking and butter/margarine, by gender, March 2008
- Figure 59: Health beliefs about cooking and butter/margarine, by age, March 2008
- Race and Ethnicity
- Preferences and usage differences by race/ethnicity
- Key points
- Figure 60: Usage of butter, margarine, and margarine spreads for 2007
- Figure 61: Usage of butter, margarine, and margarine spreads for 2007
- Usage differences by race and income
- Key points
- Figure 62: Usage of butter, margarine, and spreads, by race/ethnicity and household income, March 2008
- Brand preference by race and income
- Figure 63: Use of butter brands, by race/ethnicity, May 2006-June 2007
- Figure 64: Use of margarine/margarine spread brands, by race/ethnicity, May 2006-June 2007
- Consumer Behavior: Switching Products by Race and Income
- Key findings
- Figure 65: Behavioral changes with regard to butter use, by race/ethnicity and household income, March 2008
- Attitudinal and Behavioral Differences by Race
- Consumer attitudes towards cooking and shopping by race and income
- Key points
- Figure 66: Attitudes towards shopping and cooking, by race/ethncity, March 2008
- Figure 67: Attitudes about shopping and cooking, by race/ethnicity and income, March 2008
- Consumer attitudes about flavor by race and income
- Key points
- Figure 68: Butter and margarine flavor preferences, by race/ethnicity, March 2008
- Figure 69: Butter and margarine flavor preferences, by race/ethnicity and income, March 2008
- Health beliefs by race and income
- Key points
- Figure 70: Health beliefs about cooking and butter/margarine, by race/ethnicity, March 2008
- Figure 71: Health beliefs about cooking and butter/margarine, by race/ethnicity and income, March 2008
- Appendix: Other Useful Consumer Tables
- Usage of butter, margarine, and margarine spreads
- Figure 88: Usage of butter, margarine, and margarine spreads, by age, May 2006-June 2007
- Figure 89: Usage of butter, margarine, and margarine spreads, by household Income, May 2006-June 2007
- Figure 90: Usage of butter, margarine, and margarine spreads, by number of people in household, May 2006-June 2007
- Figure 91: Usage of butter, margarine, and margarine spreads, by number of people in household, May 2006-June 2007
- Use of margarine by type of oil used in production
- Figure 92: Types of margarine used, by type, May 2006-June 2007
- Usage of butter, margarine, and spreads by type
- Figure 93: Usage of butter, margarine, and spreads, by age, March 2008
- Figure 94: Usage of butter, margarine, and spreads, by race/ethnicity, March 2008
- Figure 95: Usage of butter, margarine, and spreads, by household income, March 2008
- Preferences for baking
- Figure 96: Usage of butter, margarine, and spreads for baking, by gender, March 2008
- Figure 97: Usage of butter, margarine, and spreads for baking, by age, March 2008
- Figure 98: Usage of butter, margarine, and spreads for baking, by race/ethnicity, March 2008
- Figure 99: Usage of butter, margarine, and spreads for baking, by household income, March 2008
- Figure 100: Usage of butter, margarine, and spreads for baking, by presence of children in household, March 2008
- Preferences for stove top cooking
- Figure 101: Usage of butter, margarine, and spreads for stove top cooking, by gender, March 2008
- Figure 102: Usage of butter, margarine, and spreads for stove-top cooking, by age, March 2008
- Figure 103: Usage of butter, margarine, and spreads for stove top cooking, by race/ethnicity, March 2008
- Preferences for everyday use
- Figure 104: Everyday usage of butter, margarine and spreads, by gender, March 2008
- Figure 105: Everyday usage of butter, margarine and spreads, by age, March 2008
- Figure 106: Everyday usage of butter, margarine and spreads, by race/ethnicity, March 2008
- Figure 107: Everyday usage of butter, margarine and spreads, by household income, March 2008
- Butter brands usage
- Figure 108: Use of butter brands, by number of people in housedhold, May 2006-June 2007
- Figure 109: Use of butter brands, by number of children in household, May 2006-June 2007
- Beliefs and behaviors related to butter use
- Figure 110: Beliefs and behavior related to butter use, by age, March 2008
- Figure 111: Beliefs and behavior related to butter use, by race/ethnicity March 2008
- Figure 112: Beliefs and behavior related to butter use, by household income, March 2008
- Figure 113: Beliefs and behavior related to butter use, by region of residence, March 2008
- Figure 114: Beliefs and behavior related to butter use, by presence of children in household, March 2008
- Beliefs and behaviors related to margarine use
- Figure 115: Beliefs and behavior related to margarine use, by age, March 2008
- Figure 116: Beliefs and behavior related to margarine use, by household income, March 2008
- Figure 117: Beliefs and behavior related to margarine use, by region of residence, March 2008
- Figure 118: Beliefs and behavior related to margarine use, by presence of children in household, March 2008
- Behavioral changes with regard to butter use
- Figure 119: Behavioral changes with regard to butter use, by gender, March 2008
- Attitudes toward meal preparation
- Figure 120: Attitudes toward meal preparation, by age, March 2008
- Figure 121: Attitudes toward meal preparation, by race/ethnicity, March 2008
- Figure 122: Attitudes toward meal preparation, by household income, March 2008
- Figure 123: Attitudes toward meal preparation, by household income, March 2008
- Appendix: Trade Associations
