US: Butter’s back – sales rise as consumers seek pure ingredients

Innovation and new flavours are enabling the once-staid staple to outpace margarine and even olive oil in market growth. Pass the butter — er, margarine. Or is it the olive-oil spread?

In the so-called oil-and-fats category, it’s getting tougher to tell which is which. American butter giant Land O’Lakes is adding olive oil to some of its sticks, marking what it says is a category first. Meanwhile, a canola-oil-blended butter spread continues to gain attention, and some versions also include olive oil. Others are adding dashes of sea salt, cinnamon and sugar to spice up what was once a pretty mundane dairy staple.

But one thing is for sure. In its race against margarine, butter is winning – and even outpacing olive oil of late – as consumers seek pure, simple, flavour-rich ingredients, notes an AdAge report.

Marketers are making the changes to fend off private labels and appeal to millennials and other cooks seeking flavourful recipes, said Phil Lempert, a food-industry analyst who runs the website SupermarketGuru. “It’s a category that was dormant for a long time and just started gaining innovation in past few years.”

At stake is a piece of a mature – but shrinking – category. Retail dollar sales of oil and fats products will drop 5% from 2011 to 2016 in the US, according to a recent forecast by market researcher Euromonitor International. The reason is that more people will eat out as the economy improves. And when cooking at home, consumers will continue to seek more-healthful, oil-free methods, such as steaming or grilling, Euromonitor stated.

But butter seems to be gaining favour for people who still like to grease things up a bit. Grocery-unit sales of butter grew 2.19% in the year ending May 13, compared with a 0.21% uptick in olive oil and a 6.24% decline in margarine, spreads and butter blends, according to SymphonyIRI data, which excludes Walmart sales. Overall, butter led with $1.5 billion in sales during the period, followed by $1.4 billion for margarine/spreads and $706 million for olive oil.

Meanwhile, Euromonitor projects that butter will grow volume sales 10% from 2011 to 2016, while margarine will continue falling because it is viewed as an “artificial” product.

Still, Land O’Lakes, the nation’s top butter brand by far with 25% share, is not taking the growth for granted……

AdAge: Read the full article