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Butter, Margarines and Oils - US - July 2014

"As consumers increasingly turn to butter over margarine/spreads for its natural appeal, spread brands are challenged to provide products that more closely align with consumer needs. Spreads that contain only natural ingredients, without artificial preservatives or additives, are likely to hold the most appeal for consumers who dislike the processed nature of spreads."

– Amy Kraushaar, Category Manager, Food & Drink Reports

This report looks at the following issues:

  • How can margarine brands establish a healthier profile?
  • Can alternative cooking oil brands meet demand for healthy foods?
  • How can name brands compete with private label?
This report provides analysis of the following:
  • How preference for less processed foods is driving butter sales and what margarine/spread brands are doing to compete 
  • How olive oil and other alternative oils such as peanut and grapeseed oil can market their cholesterol-lowering attributes to compete with standard vegetable oil brands 
  • Why households with children help drive sales and what product attributes are important to this demographic 
  • How a proposed ban on trans-fat will impact the category Organic product innovations and how the natural channel is leading the trend toward more organic products Marketing strategies of leading butter, spread, and oil brands 
This report also features examination of Mintel’s exclusive consumer survey, which covers types of products purchased, purchase frequency, ways of use, attitudes toward edible fats, and important purchase attributes.
 
For the purposes of this report, Mintel has used the following definitions:
  • Butter – the USDA requires products sold as butter to be made exclusively from milk, cream, or both, and contain not less than 80% by weight of milkfat; they may contain salt and/or additional coloring matter. 
  • Butter blends/spreads/margarine – butter blends are a blend of vegetable oil and milkfat, where the milkfat is derived to US specifications of grade A or AA butter, sold in the dairy aisle that can be used as an alternative to butter or margarine; table spreads sold in the dairy aisle that can be used as an alternative to butter or margarine; margarine is a blend of vegetable oil and milk fat with a minimum fat content of 80% the same as butter, but unlike butter, reduced-fat varieties of margarine can also be labeled as margarine. 
  • Cooking and salad oils -– plant and seed oils that are liquid at room temperature; may be composed of oil from a single type of plant and seed or a combination of plant and seed oils; excludes olive oils, which are a separate segment. Olive oil – oil derived from pressed olives; includes only olive oil used for eating or cooking. 
  • Pan spray – oils in a container that dispenses the product in a mist; used on cookware to prevent food from sticking or burning and to impart flavor to foods. 
  • Shortening – solid fat, usually made with hydrogenated or partially hydrogenated vegetable oils; used in cooking and baking.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • USDA butter grades
          • Data sources
            • Sales data
              • Consumer survey data
                • Abbreviations and terms
                  • Abbreviations
                  • Executive Summary

                      • Slow growth as butter sales increase and margarine sales decline
                        • Figure 1: Total US sales and fan chart forecast of butter, margarine, and oils, at current prices, 2009-19
                      • Key players
                        • The consumer
                          • Respondents most likely to buy stick butter, spreadable margarine, cooking oil
                            • Figure 2: Types of butter purchased, April 2014
                            • Figure 3: Types of margarine purchased, April 2014
                            • Figure 4: Types of oils purchased, April 2014
                          • Most use edible fats for cooking; 67% use them for baking
                            • Figure 5: Ways butter, margarine, oils, or spreads are used or eaten, by age, April 2014
                          • Healthy product attributes significantly important to butter, margarine, spread buyers
                            • Figure 6: Importance of butter, margarine, or spread product attributes, April 2014
                          • Healthy attributes important to oil buyers
                            • Figure 7: Importance of oil product attributes, April 2014
                          • What we think
                          • Issues and Insights

                              • How can margarine brands establish a healthier profile?
                                • Insight: Focus on simple, natural ingredients
                                  • Can alternative cooking oil brands meet demand for healthy foods?
                                    • Insight: Alternative oil brands can promote health benefits and flavor
                                      • How can name brands compete with private label?
                                        • Insight: Focus on quality
                                        • Trend Applications

                                            • Trend: Factory Fear
                                              • Trend: Hungry Planet
                                                • Trend: The Real Thing
                                                • Market Size and Forecast

                                                  • Key points
                                                    • Sales expected to increase modestly into 2019
                                                      • Demand for unprocessed foods, health concerns, demographics drive sales
                                                        • Recovering consumer confidence limits potential for stronger growth
                                                          • Sales and forecast of butter, margarine and oils
                                                            • Figure 8: Total US retail sales and forecast of butter, margarine, and oils, at current prices, 2009-19
                                                            • Figure 9: Total US sales and forecast of butter, margarine, and oils, at inflation-adjusted prices, 2009-19
                                                          • Fan chart forecast
                                                              • Figure 10: Total US sales and fan chart forecast of butter, margarine, and oils, at current prices, 2009-19
                                                          • Market Drivers

                                                            • Key points
                                                              • Demand for less processed foods impacts usage of butter, margarine
                                                                • Figure 11: Household usage of butter and margarine/margarine spread, November 2008-December 2013
                                                              • Presence of children drives usage of all edible fats
                                                                • Figure 12: Types of butter, margarine, oils, or spreads purchased – any purchase once per month or more frequently, by presence of children in household, April 2014
                                                                • Figure 13: Total US households, by presence of own children, 2003-13
                                                              • Recovering consumer confidence means consumers will eat out more often
                                                                • Figure 14: University of Michigan’s index of consumer sentiment (ICS), 2007-14
                                                            • Competitive Context

                                                              • Proposed FDA ban on trans-fat would impact some edible oils
                                                                • Competing spread products offer flavor and health alternatives
                                                                • Segment Performance

                                                                  • Key points
                                                                    • Butter accounts for 30% share, increases 12.8% between 2012 and 2014
                                                                      • Other edible fats account for 70% share but decline 1.8%
                                                                        • Sales of butter, margarine, and oils, by segment
                                                                          • Figure 15: Total US retail sales of butter, margarine, and oils, by segment, at current prices, 2012 and 2014
                                                                      • Segment Performance – Butter

                                                                        • Key points
                                                                          • Butter sales expected to increase to $3.4 billion by 2019
                                                                            • Sales and forecast of butter
                                                                              • Figure 16: Total US retail sales and forecast of butter, at current prices, 2009-19
                                                                          • Segment Performance – Other Edible Fats

                                                                            • Key points
                                                                              • Other edible fats decline in estimated 2014; slow growth into 2019
                                                                                • Sales and forecast of other edible fats
                                                                                  • Figure 17: Total US retail sales and forecast of other edible fats*, at current prices, 2009-19
                                                                                • Most respondents use olive oil, vegetable oil
                                                                                  • Figure 18: Types of salad or cooking oil used in household, November 2012-December 2013
                                                                                • Most use blended vegetable oil spreads
                                                                                  • Figure 19: Kinds of margarine/margarine spread used in household, November 2012-December 2013
                                                                              • Retail Channels

                                                                                • Key points
                                                                                  • Supermarkets hold most share but sales are flat; other channels grow 5.4%
                                                                                    • Sales of butter, margarine, and oils, by channel
                                                                                      • Figure 20: Total US retail sales of butter, margarine, and oils, by channel, at current prices, 2012 and 2014
                                                                                      • Figure 21: US supermarket sales of butter, margarine, and oils, at current prices, 2009-14
                                                                                      • Figure 22: US other channel sales of butter, margarine, and oils, at current prices, 2009-14
                                                                                    • Natural channel sales
                                                                                      • Figure 23: Natural supermarket sales of butter, margarine, and oils, by type, 2012 and 2014*
                                                                                    • Flavored/specialty oils overtake olive oils through natural channels
                                                                                      • Figure 24: Natural supermarket sales of butter, margarine, and oils, by type, 2012and 2014*
                                                                                  • Leading Companies

                                                                                    • Key points
                                                                                      • Unilever leads through MULO channels but drops sales in 2014
                                                                                        • Private label comprises 33% share
                                                                                          • Manufacturer sales of butter, margarine, and oils
                                                                                            • Figure 25: MULO sales of butter, margarine, and oils at retail, by leading companies, rolling 52 weeks 2013 and 2014
                                                                                          • Loyalty high for private label
                                                                                            • Figure 26: Key purchase measures for the top butter, margarine, and oils brands, by household penetration, 52 weeks ending Dec. 30, 2012 (a year ago) and Dec. 29, 2013 (current)
                                                                                        • Brand Share – Butter

                                                                                          • Key points
                                                                                            • Land O Lakes increases 9.9%
                                                                                              • Challenge increases 16.7%
                                                                                                • Breakstone’s drives sales for Dairy Farmers of America
                                                                                                  • Private label accounts for 52% share
                                                                                                    • Manufacturer sales of butter
                                                                                                      • Figure 27: Manufacturer sales of butter, year and year
                                                                                                  • Brand Share – Other Edible Fats

                                                                                                    • Key points
                                                                                                      • Most margarine brands decline
                                                                                                        • Wesson declines as Bertolli increases; Mazola sales flat
                                                                                                          • PAM dominates pan/microwave sprays
                                                                                                            • Manufacturer sales of other edible fats
                                                                                                              • Figure 28: Manufacturer sales of other edible fats, 2012 and 2013
                                                                                                          • Innovations and Innovators

                                                                                                            • Leading butter product claims: Hormone-free, organic
                                                                                                              • Figure 29: Top 9 butter product claims, by percentage of total claims, 2009-13
                                                                                                            • Leading margarine product claims: Low/no/reduced allergen, gluten-free
                                                                                                              • Figure 30: Top 9 margarine product claims, by percentage of total claims, 2009-13
                                                                                                            • Leading cooking oil product claims: organic, low/no/reduced allergen, gluten-free
                                                                                                              • Figure 31: Top 9 cooking oil product claims, by percentage of total claims, 2009-13
                                                                                                            • Organic product innovation exemplified in the natural channel
                                                                                                              • Figure 32: Natural supermarket sales of butter, margarine, and oils, by organic content, 2012 and 2014*
                                                                                                              • Figure 33: Natural supermarket sales of 100% organic butter, margarine, and oils, by type, 2012 and 2014*
                                                                                                          • Marketing Strategies

                                                                                                            • Overview of the brand landscape
                                                                                                              • Theme: Ease of use
                                                                                                                • Brand example: Land O Lakes
                                                                                                                  • Land O Lakes TV spot
                                                                                                                    • Figure 34: Land O’Lakes television ad, 2013
                                                                                                                  • Brand example: Country Crock
                                                                                                                    • Country Crock TV spot
                                                                                                                      • Figure 35: Country Crock television ad, 2014
                                                                                                                    • European olive oil brand campaigns counter growing US brands
                                                                                                                      • Filippo Berio TV spot
                                                                                                                        • Figure 36: Filippo Berio television ad, 2014
                                                                                                                    • Purchase Frequency of Butter and Other Edible Fats

                                                                                                                      • Key points
                                                                                                                        • Respondents more apt to buy butter once a month or more than margarine
                                                                                                                            • Figure 37: Types of butter, margarine, oils, or spreads purchased, April 2014
                                                                                                                          • 18-34 significantly more apt than average to buy butter, margarine/spreads
                                                                                                                            • Figure 38: Types of butter, margarine, oils, or spreads purchased – any purchase once per month or more frequently, by age, April 2014
                                                                                                                        • Ways Butter, Margarine, Oils, Spreads are Used/Eaten

                                                                                                                          • Key points
                                                                                                                            • Most use butter, margarine, and oils for cooking
                                                                                                                              • Figure 39: Ways butter, margarine, oils, or spreads are used or eaten, by age, April 2014
                                                                                                                            • Households with children most apt to use for baking
                                                                                                                              • Figure 40: Ways butter, margarine, oils, or spreads are used or eaten, by presence of children in household, April 2014
                                                                                                                          • Important Butter, Margarine, or Spread Attributes

                                                                                                                            • Key points
                                                                                                                              • A majority say no trans-fat is important
                                                                                                                                  • Figure 41: Importance of butter, margarine, or spread product attributes, April 2014
                                                                                                                                • 25-34s most likely to say no artificial ingredients, all-natural important
                                                                                                                                  • Figure 42: Any Importance of butter, margarine, or spread product attributes, by age, April 2014
                                                                                                                                • Households with kids most likely to say health attributes are important
                                                                                                                                  • Figure 43: Any Importance of butter, margarine, or spread product attributes, by presence of children in household, April 2014
                                                                                                                              • Attitudes towards Butter, Margarine, and Spreads Purchases

                                                                                                                                • Key points
                                                                                                                                  • Nearly half always buy the same brand
                                                                                                                                    • Figure 44: Attitudes toward butter, margarine, and spreads purchases, by age, April 2014
                                                                                                                                  • Less than $50K most likely to be brand loyal
                                                                                                                                    • Figure 45: Attitudes toward butter, margarine, and spreads purchases, by household income, April 2014
                                                                                                                                  • Households with kids willing to pay more for healthier products
                                                                                                                                    • Figure 46: Attitudes toward butter, margarine, and spreads purchases, by presence of children in household, April 2014
                                                                                                                                • Importance of Oil Product Attributes

                                                                                                                                  • Key points
                                                                                                                                    • No trans-fat most important for buyers
                                                                                                                                        • Figure 47: Importance of oil product attributes, April 2014
                                                                                                                                      • 25-34s most likely to cite all natural, healthy oil attributes
                                                                                                                                        • Figure 48: Any importance of oil product attributes, by age, April 2014
                                                                                                                                      • Health attributes most important among households with children
                                                                                                                                        • Figure 49: Any Importance of oil product attributes, by presence of children in household, April 2014
                                                                                                                                    • Attitudes towards Oil Purchases

                                                                                                                                      • Key points
                                                                                                                                        • Three in 10 say store brand oils are the same quality as name brands
                                                                                                                                            • Figure 50: Attitudes toward oil purchases, by age, April 2014
                                                                                                                                          • Less than $25K most likely to say private label as good as brand name
                                                                                                                                            • Figure 51: Attitudes toward oil purchases, by household income, April 2014
                                                                                                                                          • Households with kids most willing to pay for oils with added health benefits
                                                                                                                                            • Figure 52: Attitudes toward oil purchases, by presence of children in household, April 2014
                                                                                                                                        • Race and Hispanic Origin

                                                                                                                                          • Key points
                                                                                                                                            • Hispanics report most likelihood to buy all types of edible fats
                                                                                                                                              • Figure 53: Types of butter, margarine, oils, or spreads purchased – any purchase once per month or more frequently, by race/Hispanic origin, April 2014
                                                                                                                                            • Blacks, Hispanics more apt than Whites to say healthy attributes important
                                                                                                                                              • Figure 54: Any Importance of butter, margarine, or spread product attributes, by race/Hispanic origin, April 2014
                                                                                                                                          • Appendix – Other Useful Consumer Tables

                                                                                                                                            • Purchase frequency of butter and other edible fats
                                                                                                                                              • Figure 55: Types of butter, margarine, oils, or spreads purchased (nets), April 2014
                                                                                                                                              • Figure 56: Types of butter, margarine, oils, or spreads purchased – any purchase once per month or more frequently, by household income, April 2014
                                                                                                                                            • Ways butter, margarine, oils, spreads are used/eaten
                                                                                                                                              • Figure 57: Ways butter, margarine, oils, or spreads are used or eaten, by household income, April 2014
                                                                                                                                            • Important butter, margarine, or spread attributes
                                                                                                                                              • Figure 58: Any Importance of butter, margarine, or spread product attributes, by household income, April 2014
                                                                                                                                            • Importance of oil product attributes
                                                                                                                                              • Figure 59: Any Importance of oil product attributes, by household income, April 2014
                                                                                                                                            • Race and Hispanic origin
                                                                                                                                              • Figure 60: Ways butter, margarine, oils, or spreads are used or eaten, by race/Hispanic origin, April 2014
                                                                                                                                              • Figure 61: Attitudes toward oil purchases, by race/Hispanic origin, April 2014
                                                                                                                                              • Figure 62: Attitudes toward butter, margarine, and spreads purchases, by race/Hispanic origin, April 2014
                                                                                                                                          • Appendix – Information Resources Inc. Builders Panel Data Definitions

                                                                                                                                              • Information Resources Inc. Consumer Network Metrics
                                                                                                                                              • Appendix – Trade Associations

                                                                                                                                                Companies Covered

                                                                                                                                                • American Butter Institute
                                                                                                                                                • American Institute of Food Distribution
                                                                                                                                                • ConAgra Foods, Inc
                                                                                                                                                • Dairy Farmers of America Inc.
                                                                                                                                                • Food Marketing Institute
                                                                                                                                                • Grocery Manufacturers of America (GMA)
                                                                                                                                                • International Dairy Foods Association
                                                                                                                                                • International Food Information Council Foundation (IFIC)
                                                                                                                                                • Land O'Lakes Inc.
                                                                                                                                                • National Association of Margarine Manufacturers (NAMM)
                                                                                                                                                • Organic Trade Association
                                                                                                                                                • Pompeian Inc.
                                                                                                                                                • Private Label Manufacturers Association (PLMA)
                                                                                                                                                • Unilever USA
                                                                                                                                                • Walmart Stores (USA)

                                                                                                                                                Butter, Margarines and Oils - US - July 2014

                                                                                                                                                £3,199.84 (Excl.Tax)