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Yellow Fats and Edible Oils - UK - August 2014

“Sales of spreads continue to decline, with a variety of external reasons at play. But the category is also seen by consumers as not delivering on taste as well as its two key USPs (Unique Selling Points); ease of use and the presence of healthy fats. Operators in this market must address these issues if spreads are to stand a chance of growing again.”

– Richard Ford, Senior Food and Drink Analyst

This report covers the following issues:

  • Spreads brands must address concerns over taste and ease of use
  • Bottle design can offer standout for oil brands
  • Highlighting recipes can help oils to tap into home baking

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Table of contents

  1. Introduction

      • Definition
        • Industry definitions of yellow fats
          • Abbreviations
          • Executive Summary

              • The market
                • Figure 1: UK retail value and volume sales of yellow fats and oils, by segment, 2013
              • The future
                  • Figure 2: UK retail value sales and forecast of yellow fats and oils, by value, 2009-19
                • Market factors
                  • UK wholesale cream and butter prices are lower year on year
                    • Interest in home baking falls
                      • Spain sees a bumper year for olive oil production
                        • Companies, brands and innovation
                          • Arla Foods holds a third of the UK yellow fats market
                            • Figure 3: Leading manufacturers’ shares in the UK yellow fats market, by value, 2013/14*
                          • Lower share of NPD does not mean butter is failing to innovate
                            • Margarine and spreads account for half of adspend in yellow fats and edible oils
                              • The consumer
                                • Most Brits buy yellow fats
                                  • Figure 4: Yellow fats bought, by type, July 2013 and May 2014
                                • 85% buy edible oils
                                  • Figure 5: Edible oils bought, by type, July 2013 and May 2014
                                • Usage of spreads becomes less frequent
                                  • Figure 6: Frequency of usage of butters, spreads, edible oils and solid oils/fats, July 2013 and May 2014
                                • ‘Oil for pasta’ would interest one in four
                                  • Figure 7: Attitudes towards edible oils, May 2014
                                • Improvements to oil bottle design are needed
                                  • One in four consumers favour butter over buttermilk in spreads
                                    • Figure 8: Attitudes towards yellow fats, May 2014
                                  • What we think
                                  • Issues and Insights

                                      • Spreads brands must address concerns over taste and ease of use
                                        • The facts
                                          • The implications
                                            • Bottle design can offer standout for oil brands
                                              • The facts
                                                • The implications
                                                  • Highlighting recipes can help oils to tap into home baking
                                                    • The facts
                                                      • The implications
                                                      • Trend Application

                                                          • Trend: Life Hacking
                                                            • Trend: Extend My Brand
                                                              • Trend: Fauxthenticity
                                                              • Market Drivers

                                                                • Key points
                                                                  • Lower UK bulk cream and wholesale butter prices could drive sales
                                                                    • Figure 9: UK wholesale prices for unsalted butter and bulk cream, January 2012-June 2014
                                                                    • Figure 10: Consumer price index of butter, January 2012-June 2014
                                                                  • Müller Group butter production adds competition into the market
                                                                    • Decline in wrapped bread sales and usage of other spreads continues to affect usage
                                                                      • Decline in home baking could lead to lower usage of yellow fats
                                                                        • EU sees bumper year for olive oil production, driven by Spain
                                                                          • Figure 11: EU olive oil production (all types), crop years 2009/10-2013/14
                                                                        • Butter’s health profile might not be so bad after all…
                                                                          • Growth in the over-35 age group should support sales of spreads
                                                                            • Figure 12: Trends in the age structure of the UK population, 2009-14 and 2014-19
                                                                            • Figure 13: Usage of butter, spreads and oils at least daily, by age, May 2014
                                                                        • Strengths and Weaknesses

                                                                          • Strengths
                                                                            • Weaknesses
                                                                            • Who’s Innovating?

                                                                              • Key points
                                                                                • One in four launches were spreads in 2013
                                                                                  • Figure 14: NPD in the UK yellow fats and edible oils market, by segment, 2009-14
                                                                                • Brands hold a majority share of NPD in every category
                                                                                  • Figure 15: NPD in the UK yellow fats and edible oils market, by product category, by brand vs own-label, 2013
                                                                                • Manufacturers and retailers push yellow fats tailored towards cooking
                                                                                  • Butter dishes offer on-shelf standout
                                                                                    • Chilli and garlic oils account for nearly three in 10 launches
                                                                                      • Innovation from abroad
                                                                                        • Flavoured butters
                                                                                          • Brands look to fortification to add a point of difference in spreads and oils
                                                                                          • Market Size and Forecast

                                                                                            • Key points
                                                                                              • Butter, spreads and edible oils
                                                                                                • Figure 16: UK retail value and volume sales of yellow fats and oils, 2009-19
                                                                                              • Forecast
                                                                                                • Figure 17: UK retail sales and forecast of yellow fats and oil, by volume, 2009-19
                                                                                                • Figure 18: UK retail sales and forecast of yellow fats and oil, by value, 2009-19
                                                                                              • Forecast methodology
                                                                                              • Segment Performance

                                                                                                • Key points
                                                                                                  • Butter increases its share of the yellow fats market
                                                                                                    • Figure 19: UK retail value sales of butter, by type, 2009-13
                                                                                                    • Figure 20: UK retail value and volume sales of butter, 2009-19
                                                                                                  • Could butter help save spreads?
                                                                                                      • Figure 21: UK retail value and volume sales of spreads, by type, 2011-13
                                                                                                      • Figure 22: UK retail value and volume sales of spreads, 2009-19
                                                                                                    • Home baking trend loses momentum, feeding into lower usage of cooking and baking spreads
                                                                                                      • Figure 23: UK retail value and volume sales of cooking and baking spreads, 2009-19
                                                                                                    • Volumes fall across standard and olive oils
                                                                                                      • Figure 24: Estimated UK retail value and volume sales of edible oils (liquid), by type, 2011-13
                                                                                                      • Figure 25: UK retail value and volume sales of edible oils, 2009-19
                                                                                                  • Market Share

                                                                                                    • Key points
                                                                                                      • Arla Foods accounts for over a third of the UK yellow fats sales
                                                                                                        • Figure 26: Leading manufacturers’ sales and shares in the UK retail yellow fats market, by value and volume, 2012/13 and 2013/14
                                                                                                      • Lurpak Spreadable leads the yellow fats market
                                                                                                        • Figure 27: Leading brands’ sales and shares in the UK retail yellow fats market, by value and volume, 2012/13 and 2013/14
                                                                                                      • Own-label accounts for two thirds of value in standard cooking oils
                                                                                                        • Figure 28: Leading brands’ sales and shares in the UK retail standard cooking oil market, 2012/13 and 2013/14
                                                                                                        • Figure 29: Manufacturer sales and shares in the UK retail standard cooking oil market, by value and volume, 2012/13 and 2013/14
                                                                                                      • Filippo Berio holds a fifth of olive oil value sales
                                                                                                        • Figure 30: Brand sales and shares in the UK retail olive oil market, by value and volume, 2012/13 and 2013/14
                                                                                                        • Figure 31: Manufacturer sales and shares in the UK retail olive oil market, by value and volume, 2012/13 and 2013/14
                                                                                                    • Companies and Products

                                                                                                        • Adams Foods
                                                                                                          • Product range
                                                                                                            • Product innovation
                                                                                                              • Marketing and advertising
                                                                                                                • Arla Foods
                                                                                                                  • Product range
                                                                                                                    • Recent activity
                                                                                                                      • Product innovation
                                                                                                                        • Marketing and advertising
                                                                                                                          • Dairy Crest
                                                                                                                            • Product range
                                                                                                                              • Recent activity
                                                                                                                                • Product innovation
                                                                                                                                  • Marketing and advertising
                                                                                                                                    • Unilever
                                                                                                                                      • Product range
                                                                                                                                        • Product innovation
                                                                                                                                          • Marketing and advertising
                                                                                                                                            • Filippo Berio
                                                                                                                                              • Product range and innovation
                                                                                                                                                • Princes Group
                                                                                                                                                  • Recent activity
                                                                                                                                                    • Product range and innovation
                                                                                                                                                    • Brand Communication and Promotion

                                                                                                                                                      • Key points
                                                                                                                                                        • Margarine and spreads is only sector to increase spend in two years
                                                                                                                                                          • Figure 32: Main monitored advertising expenditure in the UK yellow fats and edible oils market, by segment, 2010-14
                                                                                                                                                        • Unilever accounts for nearly half of total category adspend
                                                                                                                                                          • Figure 33: Main monitored advertising expenditure in the UK yellow fats and edible oils market, by advertiser, 2010-14
                                                                                                                                                        • Flora Buttery accounts for almost a third of adspend
                                                                                                                                                          • Figure 34: Main monitored advertising expenditure in the UK yellow fats and edible oils market, by leading brands, 2013
                                                                                                                                                        • Brands revisit previous ad themes
                                                                                                                                                          • Brands offer home bakers the tools for the kitchen
                                                                                                                                                          • Brand Research

                                                                                                                                                            • Brand map
                                                                                                                                                                • Figure 35: Attitudes towards and usage of brands in the yellow fats and edible oils sector, June 2014
                                                                                                                                                              • Correspondence analysis
                                                                                                                                                                • Brand attitudes
                                                                                                                                                                  • Figure 36: Attitudes, by yellow fats and edible oils brand, June 2014
                                                                                                                                                                • Brand personality
                                                                                                                                                                  • Figure 37: Yellow fats and edible oils brand personality – Macro image, June 2014
                                                                                                                                                                  • Figure 38: Yellow fats and edible oils brand personality – Micro image, June 2014
                                                                                                                                                                • Brand experience
                                                                                                                                                                  • Figure 39: Yellow fats and edible oils brand usage, June 2014
                                                                                                                                                                  • Figure 40: Satisfaction with various yellow fats and edible oils brands, June 2014
                                                                                                                                                                  • Figure 41: Consideration of yellow fats and edible oils brands, June 2014
                                                                                                                                                                  • Figure 42: Consumer perceptions of current yellow fats and edible oils brand performance, June 2014
                                                                                                                                                                • Brand recommendation
                                                                                                                                                                  • Figure 43: Recommendation of selected yellow fats and edible oils brands, June 2014
                                                                                                                                                              • The Consumer – Purchasing Habits and Frequency of Usage

                                                                                                                                                                • Key points
                                                                                                                                                                  • Some 95% of Brits buy butters or spreads
                                                                                                                                                                      • Figure 44: Yellow fats bought, by type, July 2013 and May 2014
                                                                                                                                                                    • Consumers shrink their usage repertoire
                                                                                                                                                                      • Figure 45: Repertoire of yellow fats bought, by type, July 2013 and May 2014
                                                                                                                                                                    • Some 85% of people buy edible oils
                                                                                                                                                                        • Figure 46: Edible oils bought, by type, July 2013 and May 2014
                                                                                                                                                                        • Figure 47: Repertoire of edible oils bought, by type, July 2013 and May 2014
                                                                                                                                                                      • Spreads are on the daily menu for two in five people
                                                                                                                                                                          • Figure 48: Yellow fats and edible oils usage frequency, by type, July 2013 and May 2014
                                                                                                                                                                        • Butter usage peaks among men
                                                                                                                                                                          • Figure 49: Usage of butter, spreads and oils at least daily, by age, May 2014
                                                                                                                                                                      • The Consumer – Perception of Yellow Fats and Edible Oils

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Butter excels on taste – But this fails to win over non-users
                                                                                                                                                                            • Figure 50: Frequent and rare/non-users’ perceptions of butter and spreads, May 2014
                                                                                                                                                                          • Spreads are seen as tasty by only one in four heavy users
                                                                                                                                                                            • Spread brands should do more to push their main USPs against butter
                                                                                                                                                                              • Spreadable butters should do more to promote their taste
                                                                                                                                                                              • The Consumer – Attitudes Towards Edible Oils

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • Scope for developing ‘oils for pasta’
                                                                                                                                                                                      • Figure 51: Attitudes towards edible oils, May 2014
                                                                                                                                                                                    • A quarter of users find it hard to control oil when pouring
                                                                                                                                                                                      • Nearly one in four would like more guidance on usage of oils by type
                                                                                                                                                                                        • Need for brands to explain why extra virgin is superior
                                                                                                                                                                                          • Recipes that replace butter with oil appeal to one in five
                                                                                                                                                                                            • Olive oil containing olives would appeal most to Londoners and higher earners
                                                                                                                                                                                            • The Consumer – Attitudes Towards Butters and Spreads

                                                                                                                                                                                              • Key points
                                                                                                                                                                                                • Butter is more appealing in a spread than buttermilk for one in four
                                                                                                                                                                                                    • Figure 52: Interest in selected yellow fats product concepts, May 2014
                                                                                                                                                                                                  • Spreads containing superfood oil would appeal to one in five users
                                                                                                                                                                                                    • Free gifts appeal to a significant minority
                                                                                                                                                                                                      • One in seven would be interested in a liquid spread
                                                                                                                                                                                                        • ‘Ready-to-bake-with’ products from butter brands would appeal to a quarter of 16-34s
                                                                                                                                                                                                            • Figure 53: Interest in buying chilled cookie dough or icing made by a butter brand, by age, May 2014
                                                                                                                                                                                                        • Appendix – Market Drivers

                                                                                                                                                                                                            • Figure 54: UK wholesale prices of butter and bulk cream, January 2012-June 2014 (£/tonne)
                                                                                                                                                                                                            • Figure 55: Consumer Price Index of butter, January 2012-June 2014
                                                                                                                                                                                                            • Figure 56: EU olive oil production (all types), crop years 2009/10-2013/14
                                                                                                                                                                                                            • Figure 57: Trends in the age structure of the UK population, 2009-19
                                                                                                                                                                                                            • Figure 58: Agreement with the statement “I try to make sure I eat a low-fat diet”, March 2012- May 2014
                                                                                                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                                                                                                          • Total market
                                                                                                                                                                                                            • Figure 59: Best and worst case forecasts for retail sales of yellow fats and oils, by value, 2014-19
                                                                                                                                                                                                            • Figure 60: Best and worst case forecasts for retail sales of yellow fats and oils, by volume, 2014-19
                                                                                                                                                                                                          • Butter
                                                                                                                                                                                                            • Figure 61: Forecast of UK retail sales of butter, by value, 2009-19
                                                                                                                                                                                                            • Figure 62: Best- and worst-case forecasts for retail sales of butter, by value, 2014-19
                                                                                                                                                                                                            • Figure 63: Forecast of UK retail sales of butter, by volume, 2009-19
                                                                                                                                                                                                            • Figure 64: Best- and worst-case forecasts for retail sales of butter, by volume, 2014-19
                                                                                                                                                                                                          • Spreads
                                                                                                                                                                                                            • Figure 65: Forecast of UK retail sales of spreads, by value, 2009-19
                                                                                                                                                                                                            • Figure 66: Best- and worst-case forecasts for retail sales of spreads, by value, 2014-19
                                                                                                                                                                                                            • Figure 67: Forecast of UK retail sales of spreads, by volume, 2009-19
                                                                                                                                                                                                            • Figure 68: Best- and worst-case forecasts for retail sales of spreads, by volume, 2014-19
                                                                                                                                                                                                          • Cooking and baking spreads
                                                                                                                                                                                                            • Figure 69: Forecast of UK retail sales of cooking and baking spreads, by value, 2009-19
                                                                                                                                                                                                            • Figure 70: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by value, 2014-19
                                                                                                                                                                                                            • Figure 71: Forecast of UK retail sales of cooking and baking spreads, by volume, 2009-19
                                                                                                                                                                                                            • Figure 72: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by volume, 2014-19
                                                                                                                                                                                                          • Edible oils
                                                                                                                                                                                                            • Figure 73: Forecast of UK retail sales of edible oils, by value, 2009-19
                                                                                                                                                                                                            • Figure 74: Best- and worst-case forecasts for retail sales of edible oils, by value, 2014-19
                                                                                                                                                                                                            • Figure 75: Forecast of UK retail sales of edible oils, by volume, 2009-19
                                                                                                                                                                                                            • Figure 76: Best- and worst-case forecasts for retail sales of edible oils, by volume, 2014-19
                                                                                                                                                                                                        • Appendix – Who’s Innovating?

                                                                                                                                                                                                            • Figure 77: NPD in the UK yellow fats and edible oils market, by top claims, 2010-14
                                                                                                                                                                                                            • Figure 78: NPD in the UK yellow fats and edible oils market, by company (top 10), 2010-14
                                                                                                                                                                                                            • Figure 79: NPD in the UK edible oils market, by flavour, incl. blend (top 10), 2010-14
                                                                                                                                                                                                        • Appendix – Brand Communication and Promotion

                                                                                                                                                                                                            • Figure 80: Share of main monitored advertising expenditure in the UK yellow fats and edible oils market, by segment, 2010-14
                                                                                                                                                                                                        • Appendix – Brand Research

                                                                                                                                                                                                            • Figure 81: Brand usage, June 2014
                                                                                                                                                                                                            • Figure 82: Brand commitment, June 2014
                                                                                                                                                                                                            • Figure 83: Brand momentum, June 2014
                                                                                                                                                                                                            • Figure 84: Brand diversity, June 2014
                                                                                                                                                                                                            • Figure 85: Brand satisfaction, June 2014
                                                                                                                                                                                                            • Figure 86: Brand recommendation, June 2014
                                                                                                                                                                                                            • Figure 87: Brand attitude, June 2014
                                                                                                                                                                                                            • Figure 88: Brand image – Macro image, June 2014
                                                                                                                                                                                                            • Figure 89: Brand image – Micro image, June 2014
                                                                                                                                                                                                        • Appendix – The Consumer – Purchasing Habits and Frequency of Usage

                                                                                                                                                                                                            • Figure 90: Purchasing habits of yellow fats, May 2014
                                                                                                                                                                                                            • Figure 91: Most popular types of yellow fats bought, by demographics, May 2014
                                                                                                                                                                                                            • Figure 92: Next most popular types of yellow fats bought, by demographics, May 2014
                                                                                                                                                                                                            • Figure 93: Repertoire of types of yellow fats bought, May 2014
                                                                                                                                                                                                            • Figure 94: Repertoire of types of yellow fats bought, by demographics, May 2014
                                                                                                                                                                                                            • Figure 95: Types of yellow fats bought, by repertoire of types of yellow fats bought, May 2014
                                                                                                                                                                                                            • Figure 96: Types of edible oils bought, May 2014
                                                                                                                                                                                                            • Figure 97: Most popular types of edible oils bought, by demographics, May 2014
                                                                                                                                                                                                            • Figure 98: Next most popular types of edible oils bought, by demographics, May 2014
                                                                                                                                                                                                            • Figure 99: Other types of edible oils bought, by demographics, May 2014
                                                                                                                                                                                                            • Figure 100: Repertoire of types of edible oils bought, May 2014
                                                                                                                                                                                                            • Figure 101: Repertoire of types of edible oils bought, by demographics, May 2014
                                                                                                                                                                                                            • Figure 102: Purchasing habits of edible oils, by repertoire of edible oils bought, May 2014
                                                                                                                                                                                                            • Figure 103: Frequency of usage of yellow fats and oils, May 2014
                                                                                                                                                                                                            • Figure 104: Frequency of usage of yellow fats and oils, May 2014 (continued)
                                                                                                                                                                                                            • Figure 105: Frequency of usage of yellow fats and oils – Butter, by demographics, May 2014
                                                                                                                                                                                                            • Figure 106: Frequency of usage of yellow fats and oils – Butter, by demographics, May 2014 (continued)
                                                                                                                                                                                                            • Figure 107: Frequency of usage of yellow fats and oils – Spread, by demographics, May 2014
                                                                                                                                                                                                            • Figure 108: Frequency of usage of yellow fats and oils – Spread, by demographics, May 2014 (continued)
                                                                                                                                                                                                            • Figure 109: Frequency of usage of yellow fats and oils – Edible oil, by demographics, May 2014
                                                                                                                                                                                                            • Figure 110: Frequency of usage of yellow fats and oils – Edible oil, by demographics, May 2014 (continued)
                                                                                                                                                                                                            • Figure 111: Frequency of usage of yellow fats and oils – Solid oil/fat, by demographics, May 2014
                                                                                                                                                                                                            • Figure 112: Frequency of usage of yellow fats and oils – Solid oil/fat, by demographics, May 2014 (continued)
                                                                                                                                                                                                        • Appendix – The Consumer – Perception of Yellow Fats and Edible Oils

                                                                                                                                                                                                            • Figure 113: Qualities associated with yellow fats and edible oils – Frequent butter users, May 2014
                                                                                                                                                                                                            • Figure 114: Qualities associated with yellow fats and edible oils – Moderate butter users, May 2014
                                                                                                                                                                                                            • Figure 115: Qualities associated with yellow fats and edible oils – Rare butter users, May 2014
                                                                                                                                                                                                            • Figure 116: Qualities associated with yellow fats and edible oils – Frequent spread users, May 2014
                                                                                                                                                                                                            • Figure 117: Qualities associated with yellow fats and edible oils – Moderate spread users, May 2014
                                                                                                                                                                                                            • Figure 118: Qualities associated with yellow fats and edible oils – Rare spread users, May 2014
                                                                                                                                                                                                        • Appendix – The Consumer – Attitudes Towards Edible Oils

                                                                                                                                                                                                            • Figure 119: Attitudes towards edible oils, May 2014
                                                                                                                                                                                                            • Figure 120: Most popular attitudes towards edible oils, by demographics, May 2014
                                                                                                                                                                                                            • Figure 121: Next most popular attitudes towards edible oils, by demographics, May 2014
                                                                                                                                                                                                        • Appendix – The Consumer – Attitudes Towards Butters and Spreads

                                                                                                                                                                                                            • Figure 122: Interest in selected yellow fats product concepts, May 2014
                                                                                                                                                                                                            • Figure 123: Most popular yellow fats product concepts, by demographics, May 2014
                                                                                                                                                                                                            • Figure 124: Next most popular yellow fats product concepts, by demographics, May 2014

                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                        • Adam's Foods
                                                                                                                                                                                                        • Arla Foods amba
                                                                                                                                                                                                        • Clover Farms Dairy
                                                                                                                                                                                                        • Facebook, Inc.
                                                                                                                                                                                                        • Fonterra Co-operative Group Ltd
                                                                                                                                                                                                        • J. Sainsbury
                                                                                                                                                                                                        • MH Foods
                                                                                                                                                                                                        • Napolina
                                                                                                                                                                                                        • Princes Foods
                                                                                                                                                                                                        • Pura Foods Ltd
                                                                                                                                                                                                        • Salov North America Corp [Filippo Berio]
                                                                                                                                                                                                        • Tesco (UK)
                                                                                                                                                                                                        • Unilever Bestfoods UK Ltd
                                                                                                                                                                                                        • Westbury Dairies Ltd
                                                                                                                                                                                                        • YouTube, Inc.

                                                                                                                                                                                                        Yellow Fats and Edible Oils - UK - August 2014

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