The UK’s love affair with butter shows no sign of abating.
Once the whipping boy of health campaigns because of its high saturated fat content, butter has re-established itself in consumers’ hearts.
But not just any butter. The UK consumer is now discerning. While everyday butter sales dropped slightly, by 1.8%, value growth of special butters and spreadable butters grew 11.3% and 13.5% respectively [TNS 52 w/e March 27, 2005] at the expense of cheaper spreads, everyday butters and packet margarine.
While overall the category has grown 3.9%, suppliers of premium or value-added spreads are feeling well buttered up.
TNS reports that the average household is spending £1.30 more on the category than the previous year as consumers trade up.
Arran Richardson, category buyer for dairy at The Co-operative Group, says that consumers are moving into more profitable categories.
Jonathan Bedford, category controller at Unilever, says: “Consumers are trading up into high-value areas and growing the category.”
Convenience and a buttery taste are two main reasons for purchase, and spreadable butter is the sector that consistently achieves the biggest value gains.
Caroline Baker, Anchor Butter and spreadables brand manager, says sales of lighter spreadables are growing faster than the standard variety. Anchor launched its Lighter Spreadable at the beginning of January and 15-week sales to April 17 have hit £2.16m.
One manufacturer gaining value share is Dairy Crest with its Country Life Spreadable.
Dairy Crest is aiming to consolidate this position by investing in a five-week television campaign, starting on August 8 - the first time the brand has been on television since the early 1990s.
Another area in growth is spreads that offer health benefits. Bedford says: “Health is a major driving force.”
The specific health sector has grown 10.7%, led by the brands Flora Pro-activ and Benecol, according to TNS.
However, in the everyday arena, as well as butter falling dairy spreads fell 1.5% in value, according to TNS. Packet margarine, the smallest category worth £7m, while still in growth, was up 1%.
Both Arla Foods, which owns leading brand Lurpak, and Dairy Crest, have performed badly in everyday butters, despite a strong performance in spreadable. TNS attributes the value decrease in everyday butter to underperformance by both Arla’s Lurpak and Anchor brands, and Dairy
Crest’s Country Life and Willow. Natalie Mitchell, central buyer at Waitrose, says that price promotions are an effective way of increasing volume in ailing categories and raising awareness of a brand within the marketplace.
However, Della Myers, Asda chilled foods and dairy buyer, does not think price promotions are effective. “For this mature category, everyday low pricing has a promotional effect without driving value out.
“Meanwhile, some special packs have delivered incremental value growth for the category while adding interest and developing brands. Big brands such as Flora have been relaunched but have also used everyday low pricing and this has not detracted from the value of the category.”
Bedford says Unilever is moving its focus from price promotions to sampling.“We’re getting away from price promotions and price-focused activities. Sampling is important - if we can get consumers to try one of the products, they will buy into the whole range.”
This is also the approach of Matthews Foods for its Filippo Berio olive spread. Marketing director Dave Coulson says: “Instore activities such as sampling are key in what is a crowded fixture - especially for small brands.”
Brands dominate the category. According to TNS, they have a 79% value share, with high brand penetration in both everyday and premium categories. Yet own label has a growing part to play, says Myers. “Opportunities for value growth in own label are within spreadable butter,” she says.