Butter, Margarine and Table Spreads - US - May 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
• 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