The GB Butter, Spreads and Margarine (BSM) market is worth £1368M in the latest year, representing a contraction of 1.5% YOY, or £20.7M decremental sales. This slight decline has been driven by price deflation and less frequent shops - average price per volume has declined 1.5% in the latest year frequency by 1.0%. Some volume trade-up has occurred, but not enough to offset frequency losses.

Total market performance in the latest year is generally unsurprising, but a more granular view reveals drastic differences between the macro sectors. The largest sector by value remains Spreadable Butter, which commands a 25.3% share of the market - worth £346M. YOY value performance is up 2.7%, second only to Block Butter whose value has grown by 4.3%. Both sectors have grown their buyer base by decreasing prices Spreadable has seen additional growth through more frequent shops and Block through more volume per trip. Indeed, as the price of Butter and Margarine converges, increasing numbers of shoppers are switching into the sector. Resultantly, all Margarine sectors have suffered value decline in the latest year and only Olive health has experienced volume growth of 6.1%. Growth in this Olive sector is entirely bolstered by Bertolli, which had tremendous buyer growth - 40.8% versus last year. Amongst the losing Margarine sectors, Buttery Spreads leads volume decline (-3.8%), while Family Health leads value decline (-7.4%).

The branded part of the BSM market still accounts for the majority share - 84% vs. 16% and this reflects no real change in the latest year. Own Label has declined 2.8% in value or £6318k, driven by double-digit losses in key retailers. Sainsbury’s’ Own Label leads with 38.9% contraction on its Own Label portfolio. Morrisons and Tesco’s Own Label also struggle, each declining about 22.0% in value. Own Label shoppers are shopping less often and buying less when they do. Conversely, the sharpest decline in Branded - ICBINB (-14.5% in value) and Utterly Butterly (-10.0% in value), is less severe.

Iceland, The Co-Operative and Morrisons continue to over-trade in the BSM market relative to total grocery, despite 10.6% value losses in The Co-op and 3.6% losses in Morrisons. Tesco remains the largest BSM retailer performance is generally flat versus last year. Aldi is the strongest-performing retailer in the latest year (stealing shoppers from across all retailers), owing to its tasty and price-competitive Spreads.

% Volume on deal has grown slightly in the last year - from 47.5% to 50.8% TPR remains the dominant mechanic. Butter, as a sector, has led this promotional escalation, shifting Spreadable % VOD from 53.7% to 60.4%. Indeed, Spreadable Butter has overtaken Buttery Spreads as the most promoted sector in the category. Olive Health and Family Health have also both grown their % VOD.

Relative to a typical Grocery shopper, BSM shoppers are older (over-trade of 125 for housewives aged 65+), downmarket (over-trade of 115 for Class E) and from smaller households (over-trade of 107 for 2 member households). Versus total foods, women 65+ are the key consumers of Butter, while men 45+ emerge both as key Butter and Margarine consumers. That said, consumption has grown most amongst women 35-44 in the latest year (+3.9% more occasions).

As a total BSM market, there were 14.85 billion occasions in the latest year, down 94M from 2012. 9am-noon has grown 2.6%, but only accounts for 10.9% of spreading occasions. Breakfast, lunch and Lunchbox, which together account for 75% of occasions, have all declined in the latest year, driven by key behavioural shifts in the market. At breakfast, consumers are opting for filling, on-the-go items that provide greater value for time and greater value for money. Porridge, morning goods and cereal bars are all growing healthily. Lunchboxes have grown over the recession. But, sandwiches, which account for 40% of all Lunchboxes and are a key spreading opportunity, have declined sharply.

Sydney Eagle