Butter booms but total spreads sector slides

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Sales of butter are booming following a year of intense promotional activity and savvy marketing by the sector’s biggest brands - with marge sales bearing the full brunt of the assault.

Value sales of block butter rose 4.3% on volumes up 8.7% last year, and spreadable butter is up 2.7% on volumes up 6%. At the same time, the wider butter & spreads market is in decline, with value falling 1.5% on flat volumes [Kantar Worldpanel 52 w/e 14 April].

Worst hit were family health margarines, which slid 7.4% in value on volumes down 3.3% [Kantar], partly as a result of the disastrous reformulation of Unilever’s Flora. Flora lost £24.2m in sales as shoppers switched brands [IRI 52 w/e 30 March].

“Consumers are moving towards more natural products, away from products such as margarines that are often packed full of additives,” said Stuart Ibberson, business unit director at Arla Foods, whose Anchor and Lurpak brands have had the strongest growth of the top 10 spreads [IRI].

Deals have also been important to butter’s growth, however. While Flora remains the category’s most promoted brand, having appeared in 244 featured space deals in the past year, Lurpak and Anchor are second and third, with the latter having upped deal activity 254.3% [Assosia 52 w/e 30 April].

This narrowed the price differential between marge and butter, which has also benefitted from the continuing home baking trend, its foodie credentials (driven by the marketing of brands such as Lurpak), and provenance claims. “A narrowing price gap between butter and margarine, as well as evolving consumer habits, are key drivers behind the margarine decline,” said Tim Eales, strategic insight director at IRI. “The declining sales of margarine must be a concern for the industry.”

Last month Unilever bowed to consumer pressure and announced it would be reverting to the original recipe of Flora (The Grocer, 8 June). The relaunch will be supported by a campaign entitled ‘Back to the Taste You Love’, which will see more than 1 million vouchers distributed.

Adrian Adams, senior category manager for chilled food at Unilever, said the brand would be looking to encourage the use of Flora in sandwiches: “In particular we’ll be focusing on tapping into the lunchtime in-home and lunchbox sandwich occasions, where the opportunity is strongest.”

Readers' comments (1)

  • From a lover of Anchor butter here in NZ beware of the addition of palm oil to baked goods to make it go further. In our local farmers market I purchased what I thought would be a delicious croissant. I have to tell you it tasted vile, and this was because of the palm oil mixed into it, replacing some of the butter.
    I am yet to find this ingredient in any croissant recipe of mine.

    Unsuitable or offensive? Report this comment

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