central buyer, Waitrose
The overall market is in slight growth, which can be attributed to sectors such as spreadable butters, low fat and functional (cholesterol-lowering etc). Struggling areas are block butter and dairy spreads due to downward pressure on pricing.
The major issues are the space given to the butters and fats category and the likelihood of the pressure on space in the future with higher growth in sales and profitability from other fresh food sectors and the shift in space at a macro level.
Further downward pressure on price could be a potential issue as is the low level of innovation within the category.
category buyer, dairy, The Co-op
The market is in sustained growth for the first time in two years. This growth is driven by consumers moving into more profitable categories. Frequency of purchase and spend per trip are increasing.
Major issues are the decline in volume through reduction in usage and the negative health image. The biggest challenge for manufacturers is getting consumers to use more spreads, so they purchase more frequently. There is a move in the market back towards taste and naturalness. Arla is focusing on this area with its marketing campaign on Anchor (naturalness) and Lurpak (taste).
chilled foods and dairy buyer, Asda
The growth of the market is being driven by rapid growth in the high-value sectors of diet-related (cholesterol lowering) and spreadable butter. Flora Pro-activ is up, mainly due to its olive variant.
There is plenty more growth to come as awareness of the dangers associated with high cholesterol levels are still low.
The volume decrease is due to long-term trends: reduced fat consumption, reduced bread at breakfast, more out-of-home eating and the decline in baking skills.
The key challenge for the category is continuing to drive value growth against a backdrop of volume decline.