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Butter & Margarine - USPublished by: Mintel International Group Ltd. Published: Dec. 1, 2004 - 103 Pages Table of ContentsINTRODUCTION AND ABBREVIATIONS Introduction Other Relevant Reports Definition Abbreviations & terms Abbreviations Terms EXECUTIVE SUMMARY Flat market despite volatile segment performance Price steers consumers away from butter purchases Health concerns impact total market Home cooking Trends in the butter and margarine market Margarine supplier sells leading brands in market Butter and margarine manufacturers decrease adspend Supermarkets lead distribution The consumer The future of the butter and margarine market MARKET DRIVERS Price fluctuations Health concerns and confusion Battling obesity Figure 1: Prevalence of obesity among adults aged 20 years and over, 1997-2003 The Demise of Home Cooking Figure 2: Food preparation habits, total and by age, February 2004 A premium on taste MARKET SIZE & TRENDS No real growth over review period Figure 3: Total U.S. sales of butter and margarine, at current and constant prices, 1999-2004 Graph 1: Total U.S. sales of butter and margarine, at current and constant prices, 1999-2004 Market trends MARKET SEGMENTATION Overview Figure 4: FDM sales of butter and margarine, segmented by product type, 2002 & 2004 Margarine Figure 5: FDM sales of margarine, 1999-2004 Figure 6: FDM sales of margarine, by volume, 1999-2004 Butter Figure 7: FDM sales of butter, 1999-2004 Figure 8: FDM sales butter, by volume, 1999-2004 SUPPLY STRUCTURE FOREIGN TRADE Imports Figure 9: Butter imports, by value, 2001-2003 Figure 10: Margarine imports, by value, 2001-2003 Exports Figure 11: Butter exports, by value, 2001-2003 Figure 12: Margarine exports, by value, 2001-2003 MANUFACTURERS AND BRANDS FDM sales by manufacturer Figure 13: FDM sales of butter and margarine, by manufacturer, 2003 & 2004* Graph 2: FDM market share of sales by manufacturer, 2004* FDM sales by manufacturer and brand Margarine Figure 14: FDM brand sales of margarine, 2003 & 2004* Butter Figure 15: FDM brand sales of butter, 2003 & 2004* Major manufacturers and brands Unilever Land O' Lakes ConAgra Foods GFA Brands, Inc. Dairy Farmers of America California Dairies Inc. ADVERTISING & PROMOTION Overview Figure 16: Advertising expenditures by leading manufacturers in the butter & margarine market, 2002 and 2003 Major manufacturers and brands Land O' Lakes GFA Brands, Inc. ConAgra Foods Unilever Challenge Dairy Products (subsidiary of California Dairies Inc.) RETAIL DISTRIBUTION Overview Figure 17: Sales of butter & margarine, by channel, 2002 & 2004 Supermarkets Figure 18: Supermarket sales of butter & margarine, at current and constant prices, 1999-2004 Supermarket operating data Figure 19: Top supermarket operating statistics, latest fiscal year-end Figure 20: Percentage change from latest fiscal year-end versus year prior Mass merchandisers Figure 21: Mass merchandiser sales of butter & margarine, at current and constant prices, 1999-2004 Mass merchandiser operating data Figure 22: Top mass merchandiser operating statistics, latest fiscal year-end Figure 23: Percentage change from latest fiscal year-end versus year prior THE CONSUMER Introduction Household usage of butter and margarine Figure 24: Usage of butter and margarine, May 2003-April 2004 Figure 25: Usage of butter and margarine, by age, May 2003-April 2004 Figure 26: Usage of butter and margarine, by race/ethnicity, May 2003-April 2004 Figure 27: Usage of butter and margarine, by household income, May 2003-April 2004 Figure 28: Usage of butter and margarine, by region of residence, May 2003-April 2004 Frequency of usage for butter and margarine Figure 29: Frequency of butter and margarine usage, May 2003-April 2004 Private label users Figure 30: Private label use, May 2003-April 2004 Margarine use: Type, form and kind Figure 31: Usage of margarine, May 2003-April 2004 Figure 32: Usage of margarine, by age, May 2003-April 2004 Figure 33: Usage of margarine, by race/ethnicity, May 2003-April 2004 Figure 34: Usage of margarine, by region of residence, May 2003-April 2004 Baking and cooking Figure 35: Baking and cooking with butter or margarine, September 2004 Figure 36: Baking and cooking with butter or margarine, by gender, September 2004 Figure 37: Baking and cooking with butter or margarine, by age, September 2004 Figure 38: Baking and cooking with butter or margarine, by income, September 2004 Figure 39: Baking and cooking with butter or margarine, by region of residence, September 2004 Purchasing habits Figure 40: Butter and margarine purchasing preferences, September 2004 Figure 41: Butter and margarine purchasing preferences, by gender September 2004 Figure 42: Butter and margarine purchasing preferences, by age, September 2004 Figure 43: Butter and margarine purchasing preferences, by income, September 2004 Health concerns related to butter and margarine Figure 44: Attitudes towards health concerns related to butter and margarine, September 2004 Figure 45: Attitudes towards health concerns related to butter and margarine, by age, September 2004 Figure 46: Attitudes towards health concerns related to butter and margarine, by income, September 2004 Figure 47: Attitudes towards health concerns related to butter and margarine, by region of residence, September 2004 Convenience Figure 48: Convenience attitudes towards butter and margarine, September 2004 Figure 49: Convenience attitudes towards butter and margarine, by age, September 2004 Figure 50: Convenience attitudes towards butter and margarine, by income, September 2004 Figure 51: Convenience attitudes towards butter and margarine, by region of residence, September 2004 Summary FUTURE & FORECAST FUTURE TRENDS Volatile pricing Shifts in population related to eating and cooking habits Figure 52: U.S. population projections, 2004 and 2009 Decreasing incidence of home and scratch cooking Retail expansion MARKET FORECAST Butter and margarine Figure 53: Forecast of total U.S. sales of butter and margarine, at current and constant prices, 2004-2009 Graph 3: Sales of butter and margarine at current prices, 1999-2009 Margarine Figure 54: Forecast of U.S. FDM sales of margarine, at current and constant prices, 2004-2009 Butter Figure 55: Forecast of U.S. FDM sales of butter, at current and constant prices, 2004-2009 Forecast Factors APPENDIX: TRADE ASSOCIATIONS APPENDIX: NEW PRODUCT BRIEFS The Devon Cream Company: Double Devon Cream Butter Ventura Foods: Gold-N-Sweet Margarine Wal-Mart: Great Value, Soft Spread Target: Market Pantry Original Margarine GFA Brands: Smart Balance Buttery Burst! Spray H-E-B: You'd Think It's Butter Vegetable Spread Unilever Bestfoods: Promise APPENDIX: RESEARCH METHODOLOGY Consumer Research Sampling & Weighting Presentation & Definition Further Analysis Trade Research Informal trade research Formal trade research Desk & Internet Research Sources Definitions Forecasts APPENDIX: WHAT IS MINTEL? Mintel Reports Global New Products Database Comperemedia® Mintel Services POS+ Mintel Consultancy AbstractThe $2.7 billion butter and margarine market grew only 12% from 1999 to 2004 at current prices, resulting in a flat market-or a 1% decline when stripping out the effects of inflation. As a near-universal household food staple, this market is challenged to grow sales due to its mature state. Rather than gaining sales for the market as a whole, sales are more often exchanged between the two segments-butter and margarine. Factors such as changes in price, frequency of promotion, and health concerns have the most influence over this volatile market. Margarine and butter are nearly equally split in terms of dollar sales, with margarine holding 51.1% share of the FDM market in 2004. Over the review period, margarine sales declined 15% at constant prices, whereas butter sales remained flat. In terms of volume, margarine accounts for 2 ½ times more volume sold than butter. Yet, butter is sold on feature, promotion or display at high percentages (i.e. 58% in 2002), especially when volume is low due to high prices.
This Mintel report explores the following hypothesis: "Butter and margarine sales will continue to produce only modest gains due to the maturity of this market. The market will continue to be marked by price fluctuations, with sales being exchanged between butter and margarine by price-sensitive consumers. Yet, butter sales have been slowly inching forward and this trend is expected to continue as consumers become less concerned with the product's saturated fat content and appreciate its high quality and rich taste. As such, health concerns and diet trends have influenced market sales and will continue to do so. While margarine manufacturers have been at the forefront of product innovation in terms of eliminating trans fatty acids (TFAs) in their products, product promotion and education need to be effective to thwart sales from the butter segment.
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