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Yellow Fats and Edible Oils - UK - September 2015

“Whilst there are pockets of growth in the yellow fats and edible oils market – such as butter and speciality oils – overall, the market is in poor health. Value and volume are predicted to fall in 2015 across spreads and cooking/olive oils, hastening the need for operators to add value, for example by exploring the use of nut oils in spreads and oils with beneficial ingredients.”
– Richard Ford, Senior Food and Drink Analyst

This report looks at the following areas:

  • Spreads segment continues its sharp decline
  • Sales of cooking and olive oil are struggling
  • Butter brands must do more to drive home their flavour credentials

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
        • Definition
        • Executive Summary

            • The market
              • Figure 1: UK retail value sales of yellow fats and edible oils, 2010-20
            • Yellow fats
              • Speciality oil is in growth but cooking and olive oils decline
                • Companies, Brands and Innovation
                  • Lurpak posts volume growth in a declining market
                    • Unilever has been hit the hardest by spreads’ woes
                      • Competition from own-label heats up
                        • Kerrygold pushes pasture grazing
                          • The consumer
                            • Block butter is the most widely bought yellow fat
                              • Figure 2: Yellow fats bought, by type, July 2013, May 2014 and July 2015
                            • Spray cooking oils now bought by one in six
                              • Figure 3: Edible oils bought, by type, July 2013, May 2014 and July 2015
                            • Easy-to-use is the most important factor for consumers when buying yellow fats
                              • Figure 4: Factors influencing choice of butter/spread, July 2013 and July 2015
                            • More than two thirds see taste as important when buying block butter
                              • Figure 5: Attitudes towards yellow fats and edible oils, July 2015
                            • What we think
                            • Issues and Insights

                              • Spreads segment continues its sharp decline
                                • The facts
                                  • The implications
                                    • Sales of cooking and olive oil are struggling
                                      • The facts
                                        • The implications
                                          • Butter brands must do more to drive home their flavour credentials
                                            • The facts
                                              • The implications
                                              • The Market – What You Need to Know

                                                • Yellow fats and edible oils decline continues in 2015
                                                  • Butter sees strong volume growth
                                                    • Spreads continue their sharp decline
                                                      • Cooking and Baking spreads segment in poor shape
                                                        • Speciality oil is in growth but cooking and olive oils decline
                                                          • UK wholesale butter and bulk cream prices continue to fall
                                                            • Adverse weather hits EU olive oil production, causing prices to rise
                                                              • Changing bread eating habits impact purchases of spreads
                                                              • Market Size and Forecast

                                                                • Volume decline continues in 2015
                                                                  • Figure 6: UK retail value sales of yellow fats and edible oils, 2010-20
                                                                  • Figure 7: UK retail value sales of yellow fats and edible oils, 2010-20
                                                              • Segment performance

                                                                • Butter volumes are in healthy growth
                                                                    • Figure 8: UK retail value and volume sales of butter, 2010-20
                                                                    • Figure 9: UK retail value sales of butter, 2010-20
                                                                  • Spreadable butter benefits from spreads’ woes
                                                                    • Figure 10: UK retail value sales of butter, by type, 2010-14
                                                                  • Spreads see value and volume decline continue
                                                                    • Figure 11: UK retail value and volume sales of spreads, 2010-20
                                                                    • Figure 12: UK retail value sales of spreads, 2010-20
                                                                    • Figure 13: UK retail value and volume sales of spreads, by type, 2012-14
                                                                  • Cooking and baking spreads suffer from butter’s resurgence
                                                                    • Figure 14: UK retail value and volume sales of cooking and baking spreads, 2010-20
                                                                    • Figure 15: UK retail value sales of cooking and baking spreads, 2010-20
                                                                  • Edible oils’ decline is expected to continue
                                                                    • Figure 16: UK retail value and volume sales of edible oils, 2010-20
                                                                    • Figure 17: UK retail value sales of edible oils, 2010-20
                                                                    • Figure 18: UK retail value and volume sales of edible oils, by type, 2012-14
                                                                • Market Drivers

                                                                  • Butter gains positive coverage in the mainstream UK media
                                                                    • UK wholesale cream and butter prices continue to fall
                                                                      • Figure 19: UK wholesale prices of unsalted butter and bulk cream, January 2010-July 2015
                                                                      • Figure 20: Consumer Price Index of butter, January 2010-July 2015
                                                                    • Adverse weather hits EU olive oil production, causing prices to rise
                                                                      • Changing bread eating habits hamper purchases of spreads
                                                                        • Bright future for extra virgin olive oil?
                                                                        • Key Players – What You Need to Know

                                                                          • Dairy Crest reformulates Clover spread and adds spray oils
                                                                            • Lurpak discontinues its four-strong Cook’s Range
                                                                              • Kerrygold pushes pasture grazing
                                                                                • Lurpak posts volume growth in a declining market
                                                                                  • Müller Group set to be a major yellow fats player
                                                                                    • Unilever is hit hardest by downturn in spreads’ fortunes
                                                                                      • Frylight posts market-beating value growth
                                                                                        • Napolina is the only brand to buck the trend in olive oil and post growth
                                                                                        • Brand Research – Yellow Fats and Edible Oils

                                                                                          • What you need to know
                                                                                            • Brand map
                                                                                              • Figure 21: Attitudes towards and usage of selected brands, June 2015
                                                                                            • Key brand metrics
                                                                                              • Figure 22: Key metrics for selected brands, June 2015
                                                                                            • Brand attitudes: Lurpak’s foodie focus is seen as worth paying more for
                                                                                              • Figure 23: Attitudes, by brand, June 2015
                                                                                            • Brand personality: ICBINB must address its tired and unappealing personality
                                                                                              • Figure 24: Brand personality – macro image, June 2015
                                                                                            • Flora excels in propagating a healthy image
                                                                                              • Figure 25: Brand personality – micro image, June 2015
                                                                                            • Brand analysis
                                                                                              • Lurpak
                                                                                                  • Figure 26: User profile of Lurpak, June 2015
                                                                                                • Flora
                                                                                                    • Figure 27: User profile of Flora, June 2015
                                                                                                  • Kerrygold
                                                                                                      • Figure 28: User profile of Kerrygold, June 2015
                                                                                                    • Clover
                                                                                                        • Figure 29: User profile of Clover, June 2015
                                                                                                      • I Can’t Believe It’s Not Butter
                                                                                                        • Figure 30: User profile of I Can’t Believe It’s Not Butter, June 2015
                                                                                                    • Market Share

                                                                                                      • Brands drag down total market value and volume
                                                                                                        • Lurpak posts volume growth in a declining market
                                                                                                          • Unilever has been hit the hardest by spreads’ woes
                                                                                                            • Müller poised to become a major player in yellow fats
                                                                                                              • Figure 31: Leading brands’ sales and shares in the UK retail yellow fats market, by value and volume, 2013/14 and 2014/15
                                                                                                              • Figure 32: Leading manufacturers’ sales and shares in the UK retail yellow fats market, by value and volume, 2013/14 and 2014/15
                                                                                                            • Frylight posts market-beating value growth
                                                                                                                • Figure 33: Leading brands’ sales and shares in the UK retail cooking oils market, by value and volume, 2013/14 and 2014/15
                                                                                                                • Figure 34: Leading manufacturers’ sales and shares in the UK retail cooking oils market, by value and volume, 2013/14 and 2014/15
                                                                                                              • Brands suffer the most in olive oil
                                                                                                                • Figure 35: Leading brands’ sales and shares in the UK retail olive oils market, by value and volume, 2013/14 and 2014/15
                                                                                                                • Figure 36: Leading manufacturers’ sales and shares in the UK retail olive oils market, by value and volume, 2013/14 and 2014/15
                                                                                                            • Brand Communication and Promotion

                                                                                                              • Margarine and spreads accounts for three fifths of adspend in the market
                                                                                                                • Butter ad spend falls
                                                                                                                  • Stork returns to TV after 20-year hiatus
                                                                                                                    • Figure 37: Recorded above-the-line online, display and direct mail total advertising expenditure in the yellow fats and edible oils market, 2011-15
                                                                                                                  • Boost in lard/cooking fat adspend support is short-lived
                                                                                                                    • Adspend on oils halves in 2014
                                                                                                                      • Kerrygold pushes associations between its butter and ‘lush green grass’
                                                                                                                        • Unilever agrees display ad deal for Flora and Stork
                                                                                                                          • Lurpak launches Freestyle food month
                                                                                                                            • Clover teams up with McCain Jackets for a sampling campaign
                                                                                                                              • Figure 38: Top recorded above-the-line online, display and direct mail total advertising expenditure on the yellow fats and edible oils market, by top ten brands by adspend, 2011-15
                                                                                                                          • Launch Activity and Innovation

                                                                                                                            • Oil accounts for three fifths of new launches in 2014
                                                                                                                              • Figure 39: NPD in the UK yellow fats and edible oils market, 2011-15
                                                                                                                            • Flavoured oils help boost Tesco and Lidl’s share of new launches
                                                                                                                              • Operators continue to move into speciality oils
                                                                                                                                • Lurpak Cook’s Range boosts Arla’s share of launches
                                                                                                                                  • Manufacturers and retailers flag up ‘real butter’ content
                                                                                                                                    • Figure 40: NPD in the UK yellow fats and edible oils market, by top 10 ultimate company, 2011-15
                                                                                                                                  • Operators add value to oil through spray and pourable formats
                                                                                                                                    • Spray
                                                                                                                                      • Ease of use – pouring
                                                                                                                                        • New wave of nut oils
                                                                                                                                        • The Consumer – What You Need to Know

                                                                                                                                          • Block butter is the most widely bought yellow fat
                                                                                                                                            • Majority of Brits buy same amount of spreads as a year ago
                                                                                                                                              • Sunflower, vegetable and virgin/extra virgin olive oil are the most widely bought oil types
                                                                                                                                                • One in six consumers buy cold-pressed rapeseed oil
                                                                                                                                                  • Spray cooking oils now bought by one in six
                                                                                                                                                    • Easy-to-use is the most important factor for consumers
                                                                                                                                                      • Olive oil ranks highest for healthiness of selected oils
                                                                                                                                                        • Scope for nuts to leap from dairy alternative drinks to dairy-free spreads
                                                                                                                                                        • Purchasing Habits – Yellow Fats

                                                                                                                                                            • Younger consumers are more likely to buy butter
                                                                                                                                                              • Cholesterol-lowering spreads more popular with the young
                                                                                                                                                                • Figure 41: Yellow fats bought, by type, July 2013, May 2014 and July 2015
                                                                                                                                                              • Majority of Brits buy same amount of spreads as a year ago
                                                                                                                                                                • Figure 42: Changes in purchase of spreads compared to a year ago, July 2015
                                                                                                                                                                • Figure 43: Reasons for buying less spreads than a year ago, July 2015
                                                                                                                                                            • Purchasing Habits – Edible Oils

                                                                                                                                                              • Penetration of edible oils is high
                                                                                                                                                                • Spray cooking oils now bought by one in six
                                                                                                                                                                  • One in 10 16-34s buy coconut oil
                                                                                                                                                                    • Figure 44: Edible oils bought, by type, July 2013, May 2014 and July 2015
                                                                                                                                                                  • 16-34s are core purchasers of cold-pressed rapeseed oil
                                                                                                                                                                    • Figure 45: Purchase of cold-pressed rapeseed oil to use at home in the last 6 months, by age group, July 2015
                                                                                                                                                                  • Rapeseed oil adspend is still very small but growing
                                                                                                                                                                  • Factors Influencing Choice of Butter and Spreads

                                                                                                                                                                    • Easy-to-use is the most important factor for consumers
                                                                                                                                                                      • Brands playing on natural themes are well-placed
                                                                                                                                                                        • British origin/ingredients
                                                                                                                                                                          • Health factors matter to more than half of users/buyers
                                                                                                                                                                            • Figure 46: Factors influencing choice of butter/spread, July 2013 and July 2015
                                                                                                                                                                        • Qualities Associated with Edible Oils

                                                                                                                                                                          • Olive oil ranks highest for healthiness among selected oils
                                                                                                                                                                              • Figure 47: Qualities associated with selected types of edible oils, July 2015
                                                                                                                                                                            • Less than a third see each type of oil as a store cupboard staple
                                                                                                                                                                              • Few see each type of oil as responsibly sourced
                                                                                                                                                                                • Just 14% see cold-pressed rapeseed oil as good for pan-frying
                                                                                                                                                                                  • Olive oil and coconut oil seen most widely as expensive
                                                                                                                                                                                  • Attitudes towards Yellow Fats and Edible Oils

                                                                                                                                                                                    • More than two thirds see taste as important when buying block butter
                                                                                                                                                                                      • Figure 48: Attitudes towards yellow fats and edible oils, July 2015
                                                                                                                                                                                    • More required to promote coconut oil as an alternative to spreads
                                                                                                                                                                                      • Can nuts make the leap from dairy alternative drinks to dairy-free spreads?
                                                                                                                                                                                        • A place for argan oil in mainstream grocery?
                                                                                                                                                                                          • Scope for butters flavoured with condiments
                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                              • Abbreviations
                                                                                                                                                                                                • Consumer research
                                                                                                                                                                                                • Appendix – Market Drivers

                                                                                                                                                                                                    • Figure 49: Trends in the age structure of the UK population, 2010-20
                                                                                                                                                                                                    • Figure 50: Trends in the age structure of the UK population, 2010-2020
                                                                                                                                                                                                • Appendix – Brand Communication and Promotion

                                                                                                                                                                                                    • Figure 51: Recorded above-the-line online, display and direct mail total advertising expenditure on the yellow fats and edible oils market, by category, 2011-14
                                                                                                                                                                                                    • Figure 52: Recorded above-the-line online, display and direct mail total advertising expenditure on rapeseed oil brands, 2011-15
                                                                                                                                                                                                • Appendix – Launch Activity and Innovation

                                                                                                                                                                                                    • Figure 53: NPD in the UK yellow fats and edible oils market, by product category, by brand vs own-label, 2014
                                                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                                                  • Forecast Methodology
                                                                                                                                                                                                    • Total market
                                                                                                                                                                                                      • Figure 54: Forecast retail sales of yellow fats and edible oils, by volume, 2010-20
                                                                                                                                                                                                      • Figure 55: Best- and worst-case forecasts for retail sales of yellow fats and edible oils, by value, 2015-20
                                                                                                                                                                                                      • Figure 56: Best- and worst-case forecasts for retail sales of yellow fats and edible oils, by volume, 2015-20
                                                                                                                                                                                                    • Butter
                                                                                                                                                                                                      • Figure 57: Forecast retail sales of butter, by volume, 2010-20
                                                                                                                                                                                                      • Figure 58: Best- and worst-case forecasts for retail sales of butter, by value, 2015-20
                                                                                                                                                                                                      • Figure 59: Best- and worst-case forecasts for retail sales of butter, by volume, 2015-20
                                                                                                                                                                                                    • Spreads
                                                                                                                                                                                                      • Figure 60: Forecast retail sales of spreads, by volume, 2010-20
                                                                                                                                                                                                      • Figure 61: Best- and worst-case forecasts for retail sales of spreads, by value, 2015-20
                                                                                                                                                                                                      • Figure 62: Best- and worst-case forecasts for retail sales of spreads, by volume, 2015-20
                                                                                                                                                                                                    • Cooking and baking spreads
                                                                                                                                                                                                      • Figure 63: Forecast retail sales of cooking and baking spreads, by volume, 2010-20
                                                                                                                                                                                                      • Figure 64: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by value, 2015-20
                                                                                                                                                                                                      • Figure 65: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by volume, 2015-20
                                                                                                                                                                                                    • Edible oils
                                                                                                                                                                                                      • Figure 66: Forecast retail sales of edible oils, by volume, 2010-20
                                                                                                                                                                                                      • Figure 67: Best- and worst-case forecasts for retail sales of edible oils, by value, 2015-20
                                                                                                                                                                                                      • Figure 68: Best- and worst-case forecasts for retail sales of edible oils, by volume, 2015-20

                                                                                                                                                                                                  Companies Covered

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                                                                                                                                                                                                  Yellow Fats and Edible Oils - UK - September 2015

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