Edible Fats and Oils - US

Published by: Mintel International Group Ltd.

Published: Feb. 1, 2008 - 82 Pages

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

The $5.9 billion market will grow slowly through 2012

Opportunities abound in some segments

Competition from some unusual sources

Segment performance varies: olive oil is fastest growing

Supermarkets account for almost half of sales

Prices of edible fats and oils rise as farmers move to ethanol

Dieting usually means cutting back on fat

Unilever and Kraft brands lead the market, but private label is bigger

Competition on a number of levels

Most new, innovative products are from smaller players

Advertising and promotions focus on two themes

Mayonnaise and olive oil are found in most households

Brand loyalty in salad/cooking oil is not strong

Focus on olive oil

Market Size and Forecast

Key points

Olive oil is the only shining light in a slowing market

...but it is reaching a temporary saturation point

Strong interest in private label holds down sales gains

Figure 1: Total U.S. sales and forecast of edible fats and oils at current prices, 2002-12

Figure 2: Total U.S. sales and forecast of edible fats and oils at constant 2007 prices, 2002-12

Wal-Mart sales

Competitive Context

Unless cooking habits undergo a radical change, the market will continue to rise very slowly

Indirect competition… from a range of products

Segment Performance - Overview

Key points

Olive oil will continue to grow, mayonnaise sales will slow

Two reasons for poor showing: commodity status of major segments and the move to private label

Figure 3: U.S. sales and forecast of fats and oils (top five segments) at current prices, by segment, 2002-12

Figure 4: U.S. sales of fats and oils, by segment, 2005 and 2007

Segment Performance - Mayonnaise

Key points

Mayonnaise sales will continue to decline slowly

Taste is a significant factor, and brands have strong taste associations

Figure 5: U.S. sales and forecast of mayonnaise, 2002-12

Segment Performance - Cooking and Salad Oil

Key points

Small gains over time, but no significant jumps

Figure 6: U.S. sales and forecast of cooking and salad oil, 2002-12

Segment Performance - Olive Oil

Key points

Private label offers price break without compromising quality

Interest in Mediterranean diet drives olive oil sales

Figure 7: U.S. sales and forecast of olive oil, 2002-12

Segment Performance - Microwave Browning/Pan Spray

Key points

A category dominated by one brand and private label

The category also has limited applications

Figure 8: U.S. sales and forecast of microwave browning/pan spray, 2002-12

Segment Performance - Shortening

Key point

A one-brand segment, in decline

Figure 9: U.S. sales and forecast of shortening, 2002-12

Retail Channels - Overview

Key points

Market is split between supermarkets and “everything else”

Figure 10: U.S. sales of edible fats and oils, by retail channel, 2005 and 2007

Retail Channels - Other

Key points

“Plain” and “fancy” products send consumers to a wide array of channels

Apportioning sales within the channel

Figure 11: U.S. sales of edible fats and oils at other channels, 2002-07

Retail Channels - Supermarkets

Key points

Supermarket sales slip in light of competition

Supermarkets offer top brands, pitted against their own store brands

Figure 12: U.S. sales of edible fats and oils at supermarkets, 2002-07

Market Drivers

Key points

Ethanol production raises cost of vegetable oils

Figure 13: U.S. fuel ethanol production, 2002-06

Dietary considerations: obesity concerns may slow consumption rates

Figure 14: Percentage of population who are overweight or obese, by age, 1971-2004

Growing interest in omega-3 could boost floundering mayonnaise segment

Figure 15: Incidence of specifically purchasing products with omega-3, December 2007

Figure 16: Measure of frequency of purchase ofOmega-3 products, December 2007

Leading Companies

Key points

Private label success underscores commodity market status

Unilever competes in two segments, Kraft in one

Unilever’s ability to leverage top brand names across segments

Figure 17: Sales of leading edible fats and oils companies, 2006 and 2007

Brand Share - Mayonnaise

Key points

Innovation, but only to an extent

A one-dimensional product

No notable gains in more healthful line extensions

Figure 18: FDM brand sales of mayonnaise in the U.S., 2006 and 2007

Brand Share - Cooking and Salad Oil

Key points

Cooking and salad oils’ commodity status

Is there a way to stand out in the market?

“Healthy oils” have not made major headway

Figure 19: FDM brand sales of cooking and salad oil in the U.S., 2006 and 2007

Brand Share - Olive Oil

Key points

Store brand olive oil holds its own

Price is a factor

Unilever’s strong support for Bertolli

Figure 20: FDM brand sales of olive oil in the U.S., 2006 and 2007

Brand Share - Microwave Browning/Pan Spray

Key points

ConAgra’s Pam has little competition

Pam is considerably more expensive

Line extensions do little to change product share

Figure 21: FDM brand sales of microwave browning/pan spray in the U.S., 2006 and 2007

Brand Share - Shortening

Key points

Crisco holds a two-thirds share of the market

Scratch baking declines, deep frying done more often with oil

Figure 22: FDM brand sales of shortening in the U.S., 2006 and 2007

Brand Qualities

Competition and innovation

Flavor

Health

Packaging

Innovation and Innovators

Innovations in edible oils

Flavor trends - oils

Innovations in mayonnaise

Figure 23: Edible oils and mayonnaise new product introductions, U.S., 2002-07

Figure 24: Percent change in edible oils and mayonnaise new product introductions, U.S., 2002-07

Advertising and Promotion

Overview

Promoting product packaging

Figure 25: Television ad, Crisco oil, 2007

Figure 26: Television ad, Kraft Real Mayonnaise, 2007

Figure 27: Television ad, Hellmann’s mayonnaise, 2007

Promoting the product itself

Figure 28: Television ad, Kraft Miracle Whip, 2007

Figure 29: Television ad, Hellmann’s real mayonnaise, 2007

Figure 30: Television ad, Botticelli olive oil, 2007

Figure 31: Television ad, Pam vegetable oil spray, 2007

Usage of Edible Fats and Oils

Key points

Household usage

Figure 32: Usage of edible fats and oils, by age, December 2007

Trended usage of edible fats and oils

Figure 33: Trended household usage of edible fats and oils, 2003 and 2007

Figure 34: Purposes for salad or cooking oil use, 2003 and 2007

Types of oil used

Figure 35: Usage of salad or cooking oil, by type of oil, by educational attainment, May 2006-June 2007

Frequency of using oil for cooking

Figure 36: Frequency of cooking with corn, vegetable, or canola oil, by age, December 2007

Figure 37: Frequency of cooking with corn, vegetable, or canola oil, by race/Hispanic origin, December 2007

Focus on olive oil usage

Figure 38: Frequency of cooking with olive oil, by age, December 2007

Brand Usage

Key points

Popularity of brands

Brands of oil used

Figure 39: Use of salad or cooking oil brands, by race/Hispanic origin, May 2006-June 2007

Brands of mayonnaise used

Figure 40: Use of mayonnaise/mayonnaise-type salad dressing brands, by race/Hispanic origin, May 2006-June 2007

Considerations surrounding brand choice

Figure 41: Factors taken into account when purchasing edible oils, by race/Hispanic origin, December 2007

Attitudes and Opinions about Olive Oil

Key points

Buying behavior and preferences

Figure 42: Buying behavior and preferences regarding olive oil, by age, December 2007

Figure 43: Opinions concerning olive oil, by household income, December 2007

Appendix: Other Useful Consumer Tables

Usage of edible fats and oils

Figure 53: Usage of edible fats and oils, by household income, December 2007

Figure 54: Usage of edible fats and oils, by race/Hispanic origin, December 2007

Usage frequency

Figure 55: Frequency of cooking with corn, vegetable, or canola oil, by household income, December 2007

Figure 56: Frequency of cooking with olive oil, by household income, December 2007

Figure 57: Volume of salad or cooking oil used in last 90 days, by race/Hispanic origin, May 2006-June 2007

Figure 58: Volume of mayonnaise or mayo-type salad dressing used in last 90 days, by race/Hispanic origin, May 2006-June 2007

Figure 59: Use of cooking spray brands, by race/Hispanic origin, May 2006-June 2007

Factors taken into account when purchasing oils

Figure 60: Factors taken into account when purchasing edible oils, by age, December 2007

Figure 61: Factors taken into account when purchasing edible oils, by household income, December 2007

Attitudes and opinions about olive oil

Figure 62: Opinions concerning olive oil, by race/Hispanic origin, December 2007

Appendix: Trade Associations

Abstract

• The size of the market, and its potential for growth. How can a category that is built on “flavor neutral background products” stand out?
• What manufacturers and retailers can do to jump-start some segments, and clarify others. When is variety good, and when are there too many choices?
• The role of private label in an industry that is primarily commodity based. Is private label a “default” for lower priced products, or is it a secure, familiar name?
• The array of competing categories, and how they impact sales of fats and oils. How can fats and oils compete against everything from cooking tools to fat substitutes?
• Key brands, and the challenges they face. How do manufacturers compete against each other, and against private label? Do consumers see a difference?
• The impact of ethanol on the prices of vegetable oils. With corn and soy oil prices on the rise, what alternatives are left?
• Consumers’ ambivalence to many segments (e.g. shortening, salad oil). What can make them return to these basics?
• The need for more consumer information and education in the olive oil segment. The fastest growing segment is poorly understood by consumers. How can manufacturers teach them which oils to buy, and how to use them?

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