Butter, Margarine and Table Spreads - US

Published by: Mintel International Group Ltd.

Published: May. 1, 2008 - 133 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

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, 2005-07

Brand 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

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

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