Edible Fats and Oils - US - February 2008

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