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Yellow Fats - UK - June 2009

Since Mintel last reported on the yellow fats market in September 2007, rapidly rising costs have put pressure on the market and the economic downturn has taken its toll on consumers, while attitudes have shifted towards broad-based health.

Sales yellow fats value increased by an estimated 16% in 2008, to reach £1.1 billion. With only marginal growth in volume, the leap ahead in 2008 was almost entirely driven by high price inflation fuelled by dairy and energy price rises.

Butter continues to gain ground from spreads and margarines, posting sales growth of 19% to £525 million, spreads growing by a healthy 13% to £576 million in 2008. Butter has benefited from consumer preference moving in favour of balanced diets and natural foods, and the strong performance of some of the leading brands.

The price rises are expected to ease in 2009 as cost pressures moderate and consumers, with their incomes under pressure, rein in spending, perhaps buying more products on special offer or switching to own-label. However, yellow fats are expected to benefit from the projected strength in sales of bread and the rise in home cooking in the downturn. Growth of 8% is thus estimated for the market in 2009, to reach £1,190 million.

Key themes

  • Are inaccurate consumer perceptions hampering usage of yellow fats?

  • How will the economic downturn impact the market?

  • What are the differences in attitudes towards yellow fats across demographic groups?

  • How is brand activity changing the market?

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Table of contents

  1. Issues in the Market

      • Key themes
        • Definitions
          • Abbreviations
          • Future Opportunities

            • Handing over control
              • Time to leverage trust
                • Beyond the traditional
                • Market in Brief

                  • Slowing growth ahead as price rises ease
                    • Arla holds top position in a concentrated market
                      • Themes of 2008
                        • High penetration, perceptions lag reality
                        • Internal Market Environment

                          • Key points
                            • Tapping into the natural trend?
                              • Figure 1: Consumers who are prepared to pay more for additive-free foods, by gender, age and socio-economic group, 2008
                            • Fat – the bad guy
                              • Figure 2: Household purchased quantities of food and drink, 2004/05-2007
                              • Figure 3: Consumers who avoid fats, by gender, age and socio-economic group, 2008
                              • Figure 4: Household purchased quantities of food and drink, 2004/05-2007
                              • Figure 5: Average UK energy intake per person per day, 2002/03-2007
                            • Nearly half the population is slimming
                                • Figure 6: Trend in slimming, counting calories and checking nutritional content, 2004-08
                              • Cooking gains ground, treats hold theirs
                                  • Figure 7: Agreement with statements about cooking, 2004-08
                                  • Figure 8: Consumers who like to eat less healthy foods as ‘treats’, by gender, age and socio-economic group, 2008
                              • Broader Market Environment

                                • Key points
                                  • ABs to grow
                                    • Figure 9: Changes in UK adult population, by socio-economic group, 2004-09 and 2009-14
                                  • Ageing population – cutting back on yellow fats
                                    • Figure 10: Changes in the UK population, by age, 2004-14
                                  • Cost pressure starting to ease
                                    • Figure 11: UK farmgate price of milk, January 2004-April 2009
                                • Competitive Context

                                  • Key points
                                    • Yellow fats in the dairy context
                                      • Figure 12: UK retail value sales of dairy products, 2004-09
                                    • Competition to yellow fats
                                      • Figure 13: Index of UK retail value sales of selected competitive markets to yellow fats, 2004-08
                                      • Figure 14: UK retail value sales of selected competitive goods, 2004-08
                                    • Cheese
                                      • Sweet spreads
                                        • Edible oils
                                          • Bread under competition
                                              • Figure 15: Frequency of eating bread, 2004-08
                                              • Figure 16: UK retail value sales of bread, morning goods and sandwiches*, by sector, 2004-09
                                          • Strengths and Weaknesses in the Market

                                            • Strengths
                                              • Weaknesses
                                              • Who’s Innovating?

                                                • Key points
                                                  • Limited innovation in the mature market
                                                    • Figure 17: NPD activity, by launch type within the UK yellow fats market, 2006-08
                                                  • Shift from added benefits to premium
                                                    • Pack sizes and spreadables
                                                      • Flavoured butters
                                                        • International innovation
                                                          • Active health spreads
                                                            • Usage variety with flavours
                                                              • More potential for specialised cooking and baking products?
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Figure 18: UK retail value sales of yellow fats, and index of growth, 2004-14
                                                                • Easing price inflation to slow value growth
                                                                  • Volume may benefit from demographics and downturn
                                                                    • Figure 19: UK retail value sales of yellow fats, 2004-14
                                                                  • Butter vs. spreads?
                                                                    • Figure 20: UK retail value sales of yellow fats, by type, 2004-14
                                                                  • Factors used in the forecast
                                                                  • Segment Performance

                                                                    • Key points
                                                                      • Brand activity and demand for natural foods fuel butter
                                                                        • Figure 21: UK retail value sales of butter*, 2004-14
                                                                        • Figure 22: UK retail value sales of butter, by type, 2004-09
                                                                      • Consumer move away from weight watching impacts spreads
                                                                        • Figure 23: UK retail value sales of spreads, 2004-14
                                                                        • Figure 24: Share of functional spreads in total UK retail value sales of spreads, 2004-09
                                                                    • Market Share

                                                                      • Key points
                                                                        • A concentrated market
                                                                          • Figure 25: Manufacturers’ shares in UK retail value sales of yellow fats, 2008
                                                                          • Figure 26: Brand shares in the yellow fats market, 2006-08
                                                                        • A strong 2008 for Dairy Crest
                                                                          • Arla gains ground on the back of Lurpak
                                                                            • Flora under pressure at Unilever
                                                                            • Companies and Products

                                                                              • Key points
                                                                                • Manufacturers and brands
                                                                                  • Figure 27: Leading companies in the yellow fats market and their brands
                                                                                • Major players
                                                                                  • Arla Foods
                                                                                    • Dairy Crest Group
                                                                                      • Kerrygold
                                                                                        • McNeil Consumer Nutritionals
                                                                                          • Unilever
                                                                                            • Other brands
                                                                                            • Brand Communication and Promotion

                                                                                              • Key points
                                                                                                • Main media spend contracts in 2008
                                                                                                  • Figure 28: Main monitored media advertising spend on yellow fats, 2004-08
                                                                                                • TV the channel of choice
                                                                                                  • Figure 29: Main monitored media advertising spend on yellow fats, by media type, 2006-08
                                                                                                • Market leaders dominate adspend
                                                                                                  • Figure 30: Manufacturers’ share of adspend vs. share of value sales, 2008
                                                                                                  • Figure 31: Main monitored media advertising spend on yellow fats, by advertiser, 2006-08
                                                                                                • Four fifths of spend on five brands
                                                                                                  • Figure 32: Main monitored media advertising expenditure on yellow fats, by top-spending brands, 2006-08
                                                                                                • Themes
                                                                                                  • A necessary reminder of taste
                                                                                                    • Provenance can chime with consumers in downturn
                                                                                                      • Laughter sells?
                                                                                                      • Channels to Market

                                                                                                        • Key points
                                                                                                          • Leading grocers dominate yellow fats
                                                                                                            • Figure 33: UK retail value sales of yellow fats, by outlet type, 2006-08
                                                                                                          • Own-label small, but gaining in downturn
                                                                                                              • Figure 34: Trends in consuming own-label vs. branded butter and spreads most often, 2004-08
                                                                                                            • Added health benefits appeal to Co-op and M&S shoppers
                                                                                                              • Figure 35: Statements agree with butter, margarine and spreads, by supermarket used, March 2009
                                                                                                              • Figure 36: Statements agree with butter, margarine and spreads, by supermarket used, March 2009 (continued)
                                                                                                          • The Consumer – Usage

                                                                                                            • Key points
                                                                                                              • Butter wins favour from spreads
                                                                                                                  • Figure 37: Trends in consumption of butter, low-fat spreads, dairy spreads and soft margarine in the last 12 months, 2004-08
                                                                                                                • Top targets different for butter and spreads
                                                                                                                  • Figure 38: Comparison of consumption patterns of butter and low-fat spreads, dairy spreads and soft margarine in the past 12 months, 2008
                                                                                                                  • Figure 39: Most valuable consumers for butter and spreads, by age group, 2008
                                                                                                                  • Figure 40: Most valuable consumers for butter and spreads, by socio-economic group, 2008
                                                                                                              • The Consumer – Attitudes and Motivations

                                                                                                                • Key points
                                                                                                                  • Few positive attitudes towards butter
                                                                                                                    • Figure 41: Words/phrases associated with butter and spreads, March 2009
                                                                                                                  • Convenience is all for spreads
                                                                                                                    • Attitudes towards yellow fat are determined by age
                                                                                                                        • Figure 42: Attitudes towards butter, margarine and spreads, March 2009
                                                                                                                      • Health messages have made an impact
                                                                                                                        • The lucrative young
                                                                                                                          • The promiscuous 25-34s
                                                                                                                            • Offer-driven 35-44s
                                                                                                                              • 45-54s go for premium or own-label
                                                                                                                                • How can spreads win over the over-54s?
                                                                                                                                • The Consumer – Further Analysis

                                                                                                                                  • Key points
                                                                                                                                      • Figure 43: Target groups for yellow fats, March 2009
                                                                                                                                    • Gourmets – 37% of adults
                                                                                                                                      • Everydays – 32% of adults
                                                                                                                                        • Cut backs – 31% of adults
                                                                                                                                        • Appendix – Internal and Broader Market Environment

                                                                                                                                            • Figure 44: Trends in healthy lifestyles and eating habits, 2004-08
                                                                                                                                            • Figure 45: Healthy lifestyles and eating habits, by demographics, 2008
                                                                                                                                            • Figure 46: Healthy lifestyles and eating habits, by demographics, 2008 (continued)
                                                                                                                                          • Calorie intake from fats
                                                                                                                                            • Figure 47: Energy intake, by source, 2002/03-2007
                                                                                                                                          • Household consumption of fats
                                                                                                                                            • Figure 48: Household consumption of fats in Great Britain (grams per week), 1942-2000
                                                                                                                                          • Population
                                                                                                                                            • Figure 49: Structure of the UK population, by age, 2004-14
                                                                                                                                            • Figure 50: Structure of the UK adult population, by socio-economic group, 2004-14
                                                                                                                                        • Appendix – The Consumer – Usage

                                                                                                                                            • Figure 51: Consumption of butter in the last 12 months, by demographics, 2008
                                                                                                                                            • Figure 52: Consumption of low-fat spreads, dairy spreads and soft margarine in the last 12 months, by demographics, 2008
                                                                                                                                        • Appendix – The Consumer – Attitudes and Motivations

                                                                                                                                              • Figure 53: Words/phrases associated with butter, March 2009
                                                                                                                                              • Figure 54: Words/phrases associated with margarine/spreads, March 2009
                                                                                                                                              • Figure 55: Words/phrases associated with butter, by demographics, March 2009
                                                                                                                                              • Figure 56: Words/phrases associated with butter, by demographics, March 2009 (continued)
                                                                                                                                              • Figure 57: Words/phrases associated with margarine/spreads, by demographics, March 2009
                                                                                                                                              • Figure 58: Words/phrases associated with margarine/spreads, by demographics, March 2009 (continued)
                                                                                                                                              • Figure 59: Attitudes towards butter, margarine and spreads, by demographics, March 2009
                                                                                                                                              • Figure 60: Attitudes towards butter, margarine and spreads, by demographics, March 2009 (continued)
                                                                                                                                          • Appendix – The Consumer – Further Analysis

                                                                                                                                              • Figure 61: Attitudes towards butter, margarine and spreads, by target groups, March 2009
                                                                                                                                              • Figure 62: Target groups, by demographics, March 2009
                                                                                                                                              • Figure 63: Grocery shopping habits, by target groups, March 2009
                                                                                                                                              • Figure 64: Attitudes towards health and healthy lifestyles, by target groups, March 2009
                                                                                                                                              • Figure 65: Attitudes towards eating habits, by target groups, March 2009
                                                                                                                                              • Figure 66: Words/phrases associated with butter, by target groups, March 2009
                                                                                                                                              • Figure 67: Words/phrases associated with margarine/spreads, by target groups, March 2009

                                                                                                                                          Companies Covered

                                                                                                                                          • Advertising Standards Authority
                                                                                                                                          • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                          • Asda Group Ltd
                                                                                                                                          • British Bakeries Ltd
                                                                                                                                          • British Market Research Bureau (BMRB)
                                                                                                                                          • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                          • Co-operative Group
                                                                                                                                          • Costcutter Supermarkets Group
                                                                                                                                          • Dairy Crest Group plc
                                                                                                                                          • Department for Environment, Food & Rural Affairs
                                                                                                                                          • Food Standards Agency
                                                                                                                                          • Government Actuary's Department (GAD)
                                                                                                                                          • Irish Dairy Board Co-operative Ltd. [Kerrygold]
                                                                                                                                          • J. Sainsbury
                                                                                                                                          • Johnson & Johnson Ltd
                                                                                                                                          • Kerry Foods
                                                                                                                                          • Kerry Group plc
                                                                                                                                          • Kesko
                                                                                                                                          • Lidl (UK)
                                                                                                                                          • Marks & Spencer
                                                                                                                                          • McNeil Consumer Nutritionals UK Ltd
                                                                                                                                          • St Helen's Farm
                                                                                                                                          • Tesco Plc
                                                                                                                                          • The Danish Dairy Board
                                                                                                                                          • The Kerrygold Company Ltd
                                                                                                                                          • Unilever Bestfoods UK Ltd
                                                                                                                                          • Virgin Media Ltd
                                                                                                                                          • Waitrose
                                                                                                                                          • Wm Morrison Supermarkets
                                                                                                                                          • Wyke Farms Limited
                                                                                                                                          • Yeo Valley Farms (Production) Ltd

                                                                                                                                          Yellow Fats - UK - June 2009

                                                                                                                                          £1,995.00 (Excl.Tax)