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Yellow Fats and Edible Oils - UK - September 2013

“Innovation around yellow fats with added benefits has the potential to add value to the market, with more than a third of consumers agreeing that it is worth paying more for butter/spread with health claims. Butter/spread which is good for bones would appeal to households with children, suggesting the category should take cues from yogurt by emphasising calcium and Vitamin D content.”

– Amy Price, Senior Food & Drink Analyst

Some questions answered in this report include:

  • How can spread brands cater to consumers’ health concerns?
  • How can brands add value to the yellow fats market through NPD?
  • What factors can the market leverage to engage older age groups?
  • Can origin information help brands to stand out in the market?

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Table of contents

  1. Introduction

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

              • The market
                  • Figure 1: UK yellow fats and edible oils market, by value, by segment, 2012 and 2013 (est)
                • The future
                  • Figure 2: Retail value sales and forecast of yellow fats and oils, UK, by value, 2008-18
                • Market factors
                  • Growth in 25-34s and C2s will support the market
                    • Encouraging consumers to trade up will add value to the market
                      • Companies, brands and innovation
                        • Arla Foods leads the market
                          • Figure 3: Leading manufacturers’ shares in the UK yellow fats market, by value, 2012/13*
                        • NPD focuses on butter
                          • Unilever and Arla Foods dominate adspend
                            • The consumer
                              • More than eight in ten consumers buy spread/butter and oils
                                • Figure 4: Yellow fats bought, by type, July 2013
                                • Figure 5: Edible oils bought, by type, July 2013
                              • Spreads are used most frequently, with 45% using them daily
                                • Figure 6: Frequency of using butter, spreads, edible oils and solid oils/fats, July 2013
                              • Ease of use is the key driver to consumers
                                • Figure 7: Factors influencing choice of butter/spread, July 2013
                              • Three in five can taste the difference between spreads/butter brands
                                • Figure 8: Attitudes towards butter/spread, July 2013
                              • Health, portion control and flavour are important to consumers in oils
                                • Figure 9: Attitudes towards edible oils, July 2013
                              • What we think
                              • Issues in the Market

                                  • How can spread brands cater to consumers’ health concerns?
                                    • How can brands add value to the yellow fats market through NPD?
                                      • What factors can the market leverage to engage older age groups?
                                        • Can origin information help brands to stand out in the market?
                                        • Trend Application

                                            • Guiding Choice
                                              • Sense of the Intense
                                                • Futures: Human
                                                • Market Drivers

                                                  • Key points
                                                    • Reduced and low-fat spreads dominate, but continue to see a decline in consumption
                                                      • Figure 10: Household purchased quantities of butter, spreads and cooking fat, 1974-2011
                                                    • Olive oil gains popularity
                                                      • Prices stabilise for butter, rise for oils and fats
                                                        • Figure 11: Retail prices index of butter and oil and fats, January 2009-June 2013
                                                      • Baking trend continues
                                                        • Figure 12: Frequency of baking at home, June 2013
                                                      • Demographic changes
                                                        • Growth in core cohorts set to create opportunities for the market
                                                          • Figure 13: Trends in the age structure of the UK population, 2008-13 and 2013-18
                                                        • Stunted growth in ABs potentially dampens premiumisation in the market
                                                          • Figure 14: Forecast adult population trends, by socio-economic group, 2008-18
                                                      • Strengths and Weaknesses

                                                        • Strengths
                                                          • Weaknesses
                                                          • Who’s Innovating?

                                                            • Key points
                                                              • Margarine and spread NPD grows as oils fall since 2009
                                                                • Figure 15: NPD in yellow fats and edible oils, by segment, 2008-13
                                                              • Brands dominate spreads, own-label grows in butter
                                                                • Figure 16: NPD in yellow fats and edible oils, by product category, by brand vs own-label, 2012
                                                              • Own-label accounts for almost half of NPD in oil
                                                                • Figure 17: NPD in edible oils, branded vs own-label, 2008-13
                                                              • Baking and cooking occasions pose potential for NPD
                                                                • Figure 18: Top packaging trends in NPD in yellow fats, 2008-13
                                                              • Cold pressed rapeseed oils offer a higher smoke point, while retaining health benefits
                                                                • Health remains important to spreads and oils NPD
                                                                  • Figure 19: Health claims in margarines and spreads NPD, 2008-13
                                                                • Oils also look to health
                                                                  • Sprays offer portion control
                                                                  • Market Size and Forecast

                                                                    • Key points
                                                                      • Butter, spreads and edible oils
                                                                        • Figure 20: UK retail value and volume sales of butter, spreads and edible oils, 2008-18
                                                                        • Figure 21: UK yellow fats and edible oils market, by value, by segment, 2012 and 2013 (est)
                                                                      • Forecast
                                                                        • Figure 22: Retail sales and forecast of yellow fats and oils, UK, by value, 2008-18
                                                                        • Figure 23: Retail sales and forecast of yellow fats and oils, UK, by volume, 2008-18
                                                                      • Methodology
                                                                      • Segment Performance

                                                                        • Key points
                                                                          • Butter dominates the yellow fats market
                                                                            • Figure 24: UK retail value and volume sales of butter*, 2008-18
                                                                            • Figure 25: UK retail value sales of butter, by type, 2008-12
                                                                          • Spreads see a year-on-year decline
                                                                            • Figure 26: UK retail value and volume sales of spreads, 2008-18
                                                                            • Figure 27: UK retail value and volume sales of spreads, by type, 2010-12
                                                                          • Cooking and baking spreads/oils
                                                                            • Figure 28: UK retail value and volume sales of cooking and baking spreads*, 2008-18
                                                                          • Edible oils see slight rise in value and volume sales
                                                                            • Figure 29: UK retail value and volume sales of edible oils, 2008-18
                                                                          • Standard leads the edible oils market, maintaining its almost 50% share
                                                                            • Figure 30: UK retail value and volume sales of edible oils (liquid), by type, 2010-12
                                                                            • Figure 31: Estimated UK retail value sales of edible oils (liquid), by type, 2010-12
                                                                        • Market Share

                                                                          • Key points
                                                                            • Yellow fats
                                                                              • Arla Foods leads by value share, Unilever by volume share
                                                                                • Figure 32: Leading manufacturers’ sales and shares in the UK retail yellow fats market, by value and volume, 2011/12 and 2012/13
                                                                              • Flora sees sales decline but still leads the yellow fats market
                                                                                • Figure 33: Leading brands’ sales and shares in the UK retail yellow fats market, by value and volume, 2011/12 and 2012/13
                                                                              • Lurpak continues to grow thanks to success of spreadable variants
                                                                                • Most brands struggle to grow sales
                                                                                  • Oils
                                                                                    • Own-label dominates but Crisp ‘n Dry sees sales and share increase in standard cooking oils
                                                                                      • Figure 34: Estimated brand sales and shares in the standard cooking oil* market, 2010-12
                                                                                    • Napolina takes on Filippo Berio in olive oil
                                                                                      • Figure 35: Brand sales and shares in the olive oil market, by value and volume, 2011/12 and 2012/13
                                                                                  • Companies and Products

                                                                                      • Adams Foods
                                                                                        • Arla Foods
                                                                                          • Dairy Crest
                                                                                            • Unilever
                                                                                              • Filippo Berio
                                                                                                • Princes Group
                                                                                                • Brand Communication and Promotion

                                                                                                  • Key points
                                                                                                    • Total adspend reaches almost £30 million in 2012
                                                                                                      • Figure 36: Above-the-line expenditure in the UK yellow fats and edible oils market, 2009-13
                                                                                                    • Yellow fats dominate but oils have been stepping up spend
                                                                                                      • Figure 37: Above-the-line expenditure in the UK yellow fats and edible oils market, by segment, 2008-13
                                                                                                    • Unilever accounts for 40% of spend in the market
                                                                                                      • Figure 38: Above-the-line expenditure in the UK yellow fats and edible oils market, by advertiser, 2009-13
                                                                                                    • Arla and Unilever account for four of the top five brands
                                                                                                      • Figure 39: Above-the-line expenditure in the UK yellow fats and edible oils market, by leading brands, 2012
                                                                                                  • Channels to Market

                                                                                                    • Key points
                                                                                                      • Supermarkets dominate distribution in yellow fats…
                                                                                                        • Figure 40: UK retail value sales of yellow fats, by outlet type, 2010-12
                                                                                                      • …and in edible oils
                                                                                                        • Figure 41: UK retail value sales of edible oils, by outlet type, 2010-12
                                                                                                    • Consumer – Purchasing Habits

                                                                                                      • Key points
                                                                                                        • More than nine in ten consumers use spread/butter
                                                                                                            • Figure 42: Yellow fats bought, by type, July 2013
                                                                                                          • Spreads appeal most to C2s and full-time employees
                                                                                                            • Butter attracts a more discerning user base
                                                                                                              • Figure 43: Types of butter bought, by age, socio-economic status and annual household income, July 2013
                                                                                                            • More than half buy just two types of yellow fats
                                                                                                              • Figure 44: Repertoire of yellow fats bought, by type, July 2013
                                                                                                            • 82% buy edible oils/solid oils/fats
                                                                                                              • Figure 45: Edible oils bought, by type, July 2013
                                                                                                            • Olive oil attracts a more affluent consumer
                                                                                                                • Figure 46: Olive oils bought, by type, by demographics, July 2013
                                                                                                              • Three in five buy one to three types of oil
                                                                                                                • Figure 47: Repertoire of edible oils bought, by type, July 2013
                                                                                                            • Consumer – Usage

                                                                                                              • Key points
                                                                                                                • More than three in four use yellow fats and oils
                                                                                                                    • Figure 48: Usage of yellow fats and oils, July 2013
                                                                                                                  • Spreads are used most frequently, with 45% using them daily
                                                                                                                    • Figure 49: Frequency of usage of yellow fats and oils, July 2013
                                                                                                                • Consumer – Occasions

                                                                                                                  • Key points
                                                                                                                    • On toast is the most popular usage for butter/spread, when cooking for edible oils and solid oils/fats
                                                                                                                        • Figure 50: Ways in which butter, spreads, edible oils and solid oils/fats have been eaten/used, July 2013
                                                                                                                      • Baking drives usage of butter
                                                                                                                          • Figure 51: Ways in which butter has been eaten/used, by age, July 2013
                                                                                                                        • Oils and solid oils/fats are most commonly used when cooking…
                                                                                                                          • …followed by when baking
                                                                                                                          • Consumer – Factors Influencing Choice of Butter and Spreads

                                                                                                                            • Key points
                                                                                                                              • Easy-to-use formats are the key driver for consumers
                                                                                                                                • Figure 52: Factors influencing choice of butter/spread, July 2013
                                                                                                                              • Health still plays a role
                                                                                                                                  • Figure 53: Consumers who choose ‘low fat’ as a factor influencing their choice of one butter/spread over another, by gender, socio-economic status and annual household income, July 2013
                                                                                                                                • Baking drives call for unsalted butter/spreads
                                                                                                                                  • Origin information of interest to more affluent groups
                                                                                                                                    • Openness to new formats
                                                                                                                                      • Figure 54: Attitudes towards new products of butter/spreads, July 2013
                                                                                                                                      • Figure 55: Those who are ‘very interested’ in ‘butter/spread which is good for bones’, by presence of children in household, July 2013
                                                                                                                                      • Figure 56: Those who are ‘very interested’ in new products of butter/spreads, by age, July 2013
                                                                                                                                  • Consumer – Attitudes Towards Butter and Spreads

                                                                                                                                    • Key points
                                                                                                                                      • Three in five can taste the difference between brands
                                                                                                                                          • Figure 57: Attitudes towards butter/spread, July 2013
                                                                                                                                        • Two fifths believe that naturalness equates to health for butter
                                                                                                                                          • Flavours, added ingredients and texture appeal to the under-35s
                                                                                                                                            • Figure 58: Agreement with selected statements on butter/spread, by age, July 2013
                                                                                                                                          • Tapping into consumer interest in farmers/farming could add value
                                                                                                                                          • Consumer Attitudes Towards Oils

                                                                                                                                            • Key points
                                                                                                                                              • Health, portion control and flavour are important to consumers
                                                                                                                                                  • Figure 59: Attitudes towards edible oils, July 2013
                                                                                                                                                • Educating consumers on product selection would help to demystify the category
                                                                                                                                                  • Flavour offers a shortcut to consumers
                                                                                                                                                    • Formats should cater to consumers’ desire for portion control
                                                                                                                                                      • Provenance has limited appeal
                                                                                                                                                      • Appendix – Market Drivers

                                                                                                                                                          • Figure 60: GDP, PDI, consumer expenditure and savings, at constant 2013 prices, 2008-18
                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                          • Figure 61: Best- and worst-case forecasts for retail sales of yellow fats and oils, by value, 2013-18
                                                                                                                                                          • Figure 62: Best- and worst-case forecasts for retail sales of yellow fats and oils, by volume, 2013-18
                                                                                                                                                        • Butter
                                                                                                                                                          • Figure 63: Forecast of UK retail sales of butter*, by value, 2008-18
                                                                                                                                                          • Figure 64: Best- and worst-case forecasts for retail sales of butter, by value, 2013-18
                                                                                                                                                          • Figure 65: Retail sales and forecast of butter, UK, by volume, 2008-18
                                                                                                                                                          • Figure 66: Best- and worst-case forecasts for retail sales of butter, by volume, 2013-18
                                                                                                                                                        • Spreads
                                                                                                                                                          • Figure 67: Retail sales and forecast of spreads, UK, by value, 2008-18
                                                                                                                                                          • Figure 68: Best- and worst-case forecasts for retail sales of spreads, by value, 2013-18
                                                                                                                                                          • Figure 69: Retail sales and forecast of spreads, UK, by volume, 2008-18
                                                                                                                                                          • Figure 70: Best- and worst-case forecasts for retail sales of spreads, by volume, 2013-18
                                                                                                                                                        • Cooking and baking spreads
                                                                                                                                                          • Figure 71: Retail sales and forecast of cooking and baking spreads, UK, by value, 2008-18
                                                                                                                                                          • Figure 72: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by value, 2013-18
                                                                                                                                                          • Figure 73: Retail sales and forecast of cooking and baking spreads, UK, by volume, 2008-18
                                                                                                                                                          • Figure 74: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by volume, 2013-18
                                                                                                                                                        • Edible oils
                                                                                                                                                          • Figure 75: Retail sales and forecast of edible oils, UK, by value, 2008-18
                                                                                                                                                          • Figure 76: Best- and worst-case forecasts for retail sales of edible oils, by value, 2013-18
                                                                                                                                                          • Figure 77: Retail sales and forecast of edible oils, UK, by volume, 2008-18
                                                                                                                                                          • Figure 78: Best- and worst-case forecasts for retail sales of edible oils, by volume, 2013-18
                                                                                                                                                      • Appendix – Brand Communication and Promotion

                                                                                                                                                          • Figure 79: Above-the-line expenditure in the UK yellow fats and edible oils market, by media type, 2009-13
                                                                                                                                                          • Figure 80: Above-the-line media advertising spend on yellow fats and oils, by category, 2009-13
                                                                                                                                                          • Figure 81: Above-the-line expenditure in the UK yellow fats and edible oils market, by advertiser, 2009-13
                                                                                                                                                      • Appendix – Purchasing Habits

                                                                                                                                                          • Figure 82: Yellow fats bought, by type – Butter, by demographics, July 2013
                                                                                                                                                          • Figure 83: Most popular yellow fats bought, by type – Spread, by demographics, July 2013
                                                                                                                                                          • Figure 84: Next most popular yellow fats bought, by type – Spread, by demographics, July 2013
                                                                                                                                                          • Figure 85: Most popular edible oil bought, by type, by demographics, July 2013
                                                                                                                                                          • Figure 86: Next most popular edible oil bought, by type, by demographics, July 2013
                                                                                                                                                          • Figure 87: Other edible oil bought, by type, by demographics, July 2013
                                                                                                                                                          • Figure 88: Edible oils bought, by type – Solid oil/fats, by demographics, July 2013
                                                                                                                                                      • Appendix – Frequency of Usage

                                                                                                                                                          • Figure 89: Frequency of usage of edible oils (eg vegetable oil, olive oil etc), by demographics, July 2013
                                                                                                                                                          • Figure 90: Frequency of usage of edible oils (eg vegetable oil, olive oil etc), by demographics, July 2013 (continued)
                                                                                                                                                          • Figure 91: Frequency of usage of spreads, by demographics, July 2013
                                                                                                                                                          • Figure 92: Frequency of usage of spreads, by demographics, July 2013 (continued)
                                                                                                                                                          • Figure 93: Frequency of usage of butter, by demographics, July 2013
                                                                                                                                                          • Figure 94: Frequency of usage of butter, by demographics, July 2013 (continued)
                                                                                                                                                          • Figure 95: Frequency of usage of solid oils/fats (eg lard, fat), by demographics, July 2013
                                                                                                                                                          • Figure 96: Frequency of usage of solid oils/fats (eg lard, fat), by demographics, July 2013 (continued)
                                                                                                                                                      • Appendix – Consumer – Occasions

                                                                                                                                                          • Figure 97: Ways in which butter have been eaten/used, by demographics, July 2013
                                                                                                                                                          • Figure 98: Ways in which spreads have been eaten/used, by demographics, July 2013
                                                                                                                                                          • Figure 99: Ways in which edible oils have been eaten/used, by demographics, July 2013
                                                                                                                                                          • Figure 100: Ways in which solid oils/fats have been eaten/used, by demographics, July 2013
                                                                                                                                                      • Appendix – Consumer – Factors Influencing Choice of Butter and Spreads

                                                                                                                                                          • Figure 101: Most popular factors influencing choice of butter/spread, by demographics, July 2013
                                                                                                                                                          • Figure 102: Next most popular factors influencing choice of butter/spread, by demographics, July 2013
                                                                                                                                                          • Figure 103: Other factors influencing choice of butter/spread, by demographics, July 2013
                                                                                                                                                          • Figure 104: Attitudes towards new products of butter/spread which is good for bones, by demographics, July 2013
                                                                                                                                                          • Figure 105: Attitudes towards new products of butter/spread with added vitamins, by demographics, July 2013
                                                                                                                                                          • Figure 106: Attitudes towards new products of butter/spread which are high in protein, by demographics, July 2013
                                                                                                                                                          • Figure 107: Attitudes towards new products of butter/spread with added fibre, by demographics, July 2013
                                                                                                                                                          • Figure 108: Attitudes towards new products of whipped butter/spread, by demographics, July 2013
                                                                                                                                                      • Appendix – Consumer Attitudes Towards Yellow Fats

                                                                                                                                                          • Figure 109: Attitudes towards butter/spread, July 2013
                                                                                                                                                          • Figure 110: Agreement with the statement ‘I can taste the difference between different brands of butter/spread’, by demographics, July 2013
                                                                                                                                                          • Figure 111: Agreement with the statement ‘Butter enhances the flavour of food more than edible oil’, by demographics, July 2013
                                                                                                                                                          • Figure 112: Agreement with the statement ‘Supermarket own-label butter is just as good as branded’, by demographics, July 2013
                                                                                                                                                          • Figure 113: Agreement with the statement ‘The price of butter/spread has gone up noticeably in the last year’, by demographics, July 2013
                                                                                                                                                          • Figure 114: Agreement with the statement ‘It is worth paying more for butter/spread if the extra money goes to the farmer/producer’, by demographics, July 2013
                                                                                                                                                          • Figure 115: Agreement with the statement ‘Butter is healthier than spread because it is more natural’, by demographics, July 2013
                                                                                                                                                          • Figure 116: Agreement with the statement ‘It is worth paying more for butter/spread with health claims’, by demographics, July 2013
                                                                                                                                                          • Figure 117: Agreement with the statement ‘I would be interested in trying butter made with added ingredients’, by demographics, July 2013
                                                                                                                                                          • Figure 118: Agreement with the statement ‘I would like to see a wider variety of flavoured butter’, by demographics, July 2013
                                                                                                                                                          • Figure 119: Agreement with the statement ‘Butter/spread with an unusual texture appeals to me’, by demographics, July 2013
                                                                                                                                                      • Appendix – Consumer Attitudes Towards Oils

                                                                                                                                                          • Figure 120: Most popular attitudes towards edible oils, by demographics, July 2013
                                                                                                                                                          • Figure 121: Next most popular attitudes towards edible oils, by demographics, July 2013

                                                                                                                                                      Companies Covered

                                                                                                                                                      • Arla Foods amba
                                                                                                                                                      • Clover Farms Dairy
                                                                                                                                                      • Dairy Crest Group plc
                                                                                                                                                      • Irish Dairy Board Co-operative Ltd. [Kerrygold]
                                                                                                                                                      • Napolina
                                                                                                                                                      • Unilever Bestfoods UK Ltd

                                                                                                                                                      Yellow Fats and Edible Oils - UK - September 2013

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