Butter is back

Historically, butter has had somewhat of an image problem, blamed for all manner of ills, including high cholesterol and heart disease. The fact is that this is changing, as the latest market data indicates that it’s making a significant comeback against its rival, margarine. Industry giant, Unilever, the world’s leading producer of spreads with over 30% of the market (Euromonitor), previously campaigned for the ‘Goodness of Margarine’, but have now tacitly admitted defeat, embracing the rising popularity of butter, even adding butter to one of their spreads. So what’s the reason for this sudden change of heart?

Over time, Unilever have improved their extensive range of spreads, phasing out trans fats and introducing Omega-3 fatty acids and plant sterols, which are cholesterol reducing. Spreads account for 7% of the company’s total sales revenue, leading the market with brands such as Flora, I Can’t Believe It’s Not Butter and Country Crock under its brand umbrella. However, in Autumn 2013, Unilever introduced butter to their Rama spread, in Germany. This has been well received in a country where butter outsells margarine three-to-one, with Rama’s advertising campaign stating that ‘margarine and butter make the perfect match’.

Representatives from Unilever claim that the decision to introduce butter to one of their spreads has paid off, however margarine sales were still down during the fourth quarter of 2013. In total, value sales of diet spreads in the UK were down 4.1% at the end of 2013, with some consumers fearing that they contain too many ‘additives’ and ‘e-numbers’ to make up for flavour.

It is notable that consumers are becoming more and more keen on butter again, because of its appeal as a natural product, compared to margarine, which is viewed by some as man-made, artificial and a ‘chemically enhanced’ alternative product. A 2013 Mintel report found that 39% of people agreed that butter was ‘more healthy’ because it is more natural. Additionally, figures from Kantar Worldpanel show that butter sales rose 7% by volume in the five years to January 2014 up to 141 million kilograms, with products like Arla’s Anchor becoming more popular, compared to a fall of 6% for margarine volumes, although the margarine market is still significantly larger in the UK.

It could appear odd and a little baffling that Unilever, who implored consumers to cut down their butter intake just under five years ago in 2009, claiming that the ‘big fat truth’ is ‘some fats are essential and you find them in margarine’, have now come full circle by adding butter to one of their own spreads, therefore embracing the re-surging popularity of the natural product.

The natural appeal and positioning of butter over margarine can also be down to the increasingly important factor of British Provenance, which dairy companies are emphasizing more and more, to increase sales and inspire loyalty. This creates a point of difference for butter brands, with some packs declaring ‘supporting our British farmers’, as there is some evidence indicating shoppers feel that buying British is becoming more important.

Also attributing to butter’s big comeback, is the increase in popularity of baking, some of which is driven by various cooking shows, the most notable of which, being the BBC’s BAFTA award-winning Great British Bake Off. The first episode, which aired in August 2010, had over 2.5 million views. Additionally, the baking industry reached £3.4 billion in the UK in the last quarter of 2013, with research by retail analyst Conlumino revealing that more than 3 out of 5 adults baked at home at least once in 2013, compared to 1 out of 3 in 2011.

Going forward in 2014, it is likely that the sales of spreads will continue to decline, with butter continuing to be on the rise, positioned as a natural British product. This could also mean an increase in the buttery spreads available in the market.

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