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Yellow Fats and Edible Oils - UK - August 2011

INTRODUCTION
Definition
Industry definitions of yellow fats
Abbreviations
EXECUTIVE SUMMARY
The market
The mature market posts robust growth
Figure 1: UK retail sales of butter, spreads and edible oils, by value, 2006-11
Forecast
Figure 2: Forecast of UK retail sales of butter, spreads and edible oils, by value, 2006-16
Market factors
Health concerns continue to put pressure on the market
Rising dairy prices have fuelled inflation in butter
Olive oil benefits from steady prices and industry support
Demographic changes bode well for spreads, but pose challenges to butter
Companies, brands and innovation
Lurpak retains a strong lead in butter and spreads
Figure 3: Estimated brand shares in the butter, spreads and margarine market, 2010
Own-label still the dominant force in liquid oils
Figure 4: Estimated brand shares in the standard cooking oil market, 2010
Figure 5: Estimated brand shares in the olive oil market, 2010
Oils dominate NPD
The consumer
Consumers have become price-driven
Figure 6: Attitudes towards yellow fats and edible oils, June 2011
Butter leads in yellow fats, olive in oils
Butter is seen as tasty, spreads as processed
Figure 7: Qualities associated with butter and spreads, June 2011
Olive oil enjoys a popular image as natural and healthy in moderation
Figure 8: Qualities associated with vegetable oil and olive oil, June 2011
What we think
ISSUES IN THE MARKET
What factors can manufacturers leverage to add value to butter and spreads?
Can brands engage consumers with a healthy proposition?
How can the market engage the growing group of health-aware over-55s?
What areas hold development potential for edible oils?
FUTURE OPPORTUNITIES
Premiumization & Indulgence
Moral Brands
INTERNAL MARKET ENVIRONMENT
Key points
Butter’s healthier options attract new users
Figure 9: Trends in frequency of using butter, spreads and edible oils in the household in the last 12 months, 2009-10
Figure 10: Trends in types of butter used most often in the household in the last 12 months, 2009 and 2010
Figure 11: Household purchased quantities of yellow fat, 2005-09
Olive oil receives a boost from EU campaign
Figure 12: Household purchased quantities of vegetable oils, 2005-09
Consequences of a fatty diet
Figure 13: Trends in body mass index, 2006-10
Public health campaigns raise awareness of saturated fats health risk
Figure 14: Average UK energy intake per person per day, 2005-09
Cholesterol-lowering plant sterols get the green light from EFSA
BROADER MARKET ENVIRONMENT
Key points
Dairy industry under pressure
Figure 15: Retail price indices of butter and oil and fats, January 2005-January 2011 (Jan 2005=100)
Oils also subject to significant commodity and retail price volatility
Over-55s represent an opportunity for edible oils
Figure 16: Volume importance index of using butter, spreads and edible oils in the household in the last 12 months, by age, 2010
Figure 17: Projected trends in the UK population, by age, 2011-16
The core user base for butter is forecast to shrink in the coming years
Figure 18: Volume importance index of using butter, spreads and edible oils in the household in the last 12 months, by socio-economic group, 2010
Figure 19: Projected trends in the UK population, by socio-economic group, 2011-16
COMPETITIVE CONTEXT
Key points
A broad competitive set
Figure 20: UK retail value sales of competing products to edible oils, showing 2010 market size and growth, % change 2008-10
UK consumers’ fondness for toast remains firm
Consumers’ demand for convenience prevents a landslide return to homemade sandwiches
Figure 21: Frequency of bringing lunch from home, by most popular attitudes towards buying lunch on weekdays, March 2011
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
New product launch activity reaches new high in 2010
Figure 22: NPD in yellow fats and edible oils, by product category, 2007-11*
Figure 23: Trends in own-label and branded new product launches across edible oils and fats, January 2007-July 2011*
Figure 24: Trends in own-label-only new product launches across edible oils and fats sub-categories, January 2007-July 2011*
Trends in new product claims
Figure 25: NPD in yellow fats and edible oils, by top ten product claims, by category, 2007-11
Figure 26: NPD in yellow fats and edible oils, by top ten product claims, 2007-11
Leveraging provenance can provide a point of difference consumers can relate to in butter
Ethical – environmental claims
Flora has the lead in functional health claims
Free-from and cleaner labels
Positioning salted butter in a more positive and gourmet way
MARKET VALUE AND FORECAST
Key points
Butter, spreads and edible oils
Figure 27: UK retail value sales of butter, spreads and edible oils, 2006-11
Butter and spreads
Edible oils
Forecast
Figure 28: Forecast of UK retail sales of butter, spreads and edible oils, by value, 2006-16
Figure 29: Forecast of UK retail sales of butter, spreads and edible oils, by value, 2006-16
Forecast methodology
SEGMENT PERFORMANCE
Key points
Butter, margarine and spreads
Figure 30: UK retail value sales of butter, spreads and edible oils, 2006-11
Figure 31: UK retail value sales of butter, by type, 2006-11
Edible oils
Figure 32: UK retail value sales of liquid oil, by type, 2008-10
Figure 33: UK retail value sales of solid oils and cooking fats, 2007-11
MARKET SHARE
Key points
Brands experience slower growth than in previous years
Figure 34: Estimated brand shares in the butter, spreads and margarine market, 2008-10
Figure 35: Price comparison of leading brands, 2011
Cooking oils
Figure 36: Estimated brand sales and shares in the standard cooking oil market, 2008-10
Figure 37: Estimated brand sales and shares in the olive oil market, 2008-10
COMPANIES AND PRODUCTS
Key points
 MANUFACTURERS AND BRANDS
Figure 38: Selected leading companies in the yellow fats and edible oils market in the UK and their brands, 2011
Arla Foods
Dairy Crest
Filippo Berio
Kerrygold
Princes Group
Unilever
BRAND COMMUNICATION AND PROMOTION
Key points
Flora leads margarine and spreads as the biggest contributor to above-the-line spend
Figure 39: Above-the-line expenditure in the UK yellow fats and edible oils market, 2008-11
Figure 40: Advertisement expenditure in the UK yellow fats and edible oils market, by brand, 2008-11
Butter brands tend to focus on either taste, health or provenance
Focusing on health – and now taste
BRAND RESEARCH
Brand map
Figure 41: Attitudes towards and usage of butter and spread brands, June 2011
Brand attitudes
Figure 42: Attitudes, by butter and spread brand, June 2011
Brand personality
Figure 43: Butter and spreads brand personality – macro image, June 2011
Figure 44: Butter and spreads brand personality – micro image, June 2011
Correspondence analysis
Brand experience
Figure 45: Butter and spread brand usage, June 2011
Figure 46: Satisfaction with various butter and spread brands, June 2011
Figure 47: Consideration of butter and spread brands, June 2011
Figure 48: Consumer perceptions of current butter and spread brand performance, June 2011
Figure 49: Butter and spread brand recommendation – Net Promoter Score, June 2011
Brand index
Figure 50: Butter and spread brand index, June 2011
Figure 51: Butter and spread brand index vs. recommendation, June 2011
Target group analysis
Figure 52: Target groups, June 2011
Figure 53: Butter and spread brand usage, by target groups, June 2011
Group One – The Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – The Individualists
CHANNELS TO MARKET
Key point
Multiples continue to dominate in both oils and yellow fats
Figure 54: UK retail value sales of yellow fats, by outlet type, 2008-10
Figure 55: UK retail sales of edible oils, by outlet type, 2008-10
CONSUMER – PURCHASES BY TYPE
Key points
Block butter remains top choice
Figure 56: Types of yellow fats, solid oils and cooking fats bought, June 2011
Figure 57: Purchase of buttery taste spreads and spreadable butter, by age, socio-economic group and household income, June 2011
Figure 58: Purchase of olive spreads and cholesterol-lowering spreads, by age, socio-economic group and household income, June 2011
Olive leads in oils
Figure 59: Types of liquid oils bought, June 2011
Olive oil is a cupboard staple
Figure 60: Purchase of olive oil and virgin/extra virgin olive oil, by age, socio-economic group and household income, June 2011
Sunflower and vegetable oil bought by half
Figure 61: Purchase of sunflower oil and vegetable oil, by age, socio-economic group and household income, June 2011
Speciality oils hold only niche appeal
Usage of butter and spreads by occasion
Figure 62: Usage of butter and spreads, by occasion, June 2011
CONSUMER – PERCEPTIONS OF YELLOW FATS AND EDIBLE OILS
Key points
Butter shines on taste, spreads are seen as an everyday food
Figure 63: Qualities associated with butter and spreads, June 2011
Butter excels on taste, but hampered by view as too high in fat
Spreads are still dominated by image as processed, a minority see butter as natural
Butter becomes a rare treat
16-24-year-olds see spreads in a more positive light
Figure 64: Qualities associated with butter and spreads, percentage point difference of 16-24-year-olds compared to average, June 2011
Olive oil enjoys an image as healthy and natural
Figure 65: Qualities associated with vegetable oil and olive oil, June 2011
Vegetable oil is seen most typically as a bland kitchen essential
CONSUMER – ATTITUDES TOWARDS YELLOW FATS AND EDIBLE OILS
Key points
Health concerns and special offers play a key role in butter and spreads
Figure 66: Attitudes towards yellow fats and edible oils, June 2011
Half the nation buy butter and spreads on offer
Health plays a key role in the market
Fair pay to farmers and healthiness can be leveraged to add value
Home cooks and bakers support demand for yellow fats and flavoured oils
TARGET GROUPS
Key points
 FOUR TARGET GROUPS
Figure 67: Target groups, June 2011
Engagers (19%)
Switchers (39%)
Health-awares (23%)
Price-led (18%)
APPENDIX – INTERNAL MARKET ENVIRONMENT
Figure 68: Trends in agreement with selected lifestyle statements, 2006-10
Figure 69: Trends in statements on high salt/sodium content, 2007-10
Figure 70: Agreement with the lifestyle statements, by demographics, 2010
Figure 71: Statements on high salt/sodium content, by demographics, 2010
APPENDIX – BROADER MARKET ENVIRONMENT
Figure 72: Retail price indices of butter and oil and fats, January 2005-April 2011
APPENDIX – COMPETITIVE CONTEXT
Figure 73: UK retail value sales of competing products to edible oils, 2008-10
Figure 74: Trends in frequency of using packaged sliced breads in the household in the last 12 months, 2009-10
Figure 75: Trends in frequency of using other type of breads in the household in the last 12 months, 2009-10
Figure 76: Trends in frequency of using breakfast cereals in the household in the last 12 months, 2009-10
APPENDIX – WHO’S INNOVATING?
Figure 77: New product development in the UK edible oils and fats market, by top claims categories, 2008-11
APPENDIX – MARKET SIZE AND FORECAST
Figure 78: Forecast of UK retail value sales of butter, spreads and edible oils, best and worst case, 2011-16
Butter
Figure 79: Forecast of UK retail value sales of butter, 2006-16
Figure 80: Forecast of UK retail value sales of butter, 2006-16
Figure 81: Forecast of UK retail value sales of butter, best and worst case, 2011-16
Spreads
Figure 82: Forecast of UK retail value sales of spreads, 2006-16
Figure 83: Forecast of UK retail value sales of spreads, 2006-16
Figure 84: Forecast of UK retail value sales of spreads, best and worst case, 2011-16
Edible oils
Figure 85: Forecast of UK retail value sales of edible oils, 2011-16
Figure 86: Forecast of UK retail value sales of edible oils, 2011-16
Figure 87: Forecast of UK retail value sales of edible oils, best and worst case, 2011-16
APPENDIX – BRAND COMMUNICATIONS
Figure 88: Advertisement expenditure in the UK yellow fats and edible oils market, by product category minor, 2008-11
Figure 89: Advertisement expenditure in the UK yellow fats and edible oils market, by media type, 2008-11
Figure 90: Advertisement expenditure in the UK yellow fats and edible oils market, by company, 2008-11
Figure 91: Advertisement expenditure in the UK yellow fats and edible oils market, by company and media type, 2008-11*
APPENDIX – BRAND RESEARCH
Figure 92: Brand usage, June 2011
Figure 93: Brand commitment, June 2011
Figure 94: Brand momentum, June 2011
Figure 95: Brand diversity, June 2011
Figure 96: Brand satisfaction, June 2011
Figure 97: Brand recommendation, June 2011
Figure 98: Brand attitude, June 2011
Figure 99: Brand image – macro image, June 2011
Figure 100: Brand image – micro image, June 2011
Figure 101: Psychographic segmentation, by target groups, June 2011
Figure 102: Psychographic segmentation, by target groups, June 2011
Figure 103: Brand usage, by target groups, June 2011
Brand index
Figure 104: Brand index, June 2011
APPENDIX – TRENDS IN CONSUMER USAGE
Figure 105: Trends in frequency of using butter in the household in the last 12 months, 2009 and 2010
Figure 106: Trends in frequency of using low-fat spreads, dairy spreads and soft margarine in the last 12 months, 2009 and 2010
Figure 107: Trends in frequency of using oils for cooking and salad in the last 12 months, 2006-10
Figure 108: Frequency of using butter in the household in the last 12 months, by demographics, 2010
Figure 109: Frequency of using low-fat spreads, dairy spreads and soft margarine in the household in the last 12 months, by demographics, 2010
Figure 110: Frequency of using oils for cooking and salad in the household in the last 12 months, by demographics, 2010
APPENDIX – CONSUMER – PURCHASE BY TYPE
Figure 111: Types of yellow fats bought, June 2011
Figure 112: Most popular types of yellow fats bought, by demographics, June 2011
Figure 113: Next most popular types of yellow fats bought, by demographics, June 2011
Figure 114: Other types of yellow fats bought, by demographics, June 2011
Figure 115: Types of oils bought, June 2011
Figure 116: Most popular types of oils bought, by demographics, June 2011
Figure 117: Next most popular types of oils bought, by demographics, June 2011
Figure 118: Other types of oils bought, by demographics, June 2011
Figure 119: Usage of butter and spreads, by occasion, June 2011
Figure 120: Usage of butter and spreads, by occasion, by demographics, June 2011
Figure 121: Usage of cholesterol-lowering spread and vegetable oil, by occasion, June 2011
Figure 122: Usage of vegetable oil, by occasion, by demographics, June 2011
Figure 123: Usage of olive oil and other oil, by occasion, June 2011
Figure 124: Usage of olive oil, by occasion, by demographics, June 2011
Figure 125: Usage of other oil, by occasion, by demographics, June 2011
Figure 126: Usage of spray cooking oil and lard/fat, by occasion, June 2011
Figure 127: Usage of spray cooking oil, by occasion, by demographics, June 2011
APPENDIX – CONSUMER – PERCEPTIONS OF YELLOW FATS AND EDIBLE OILS
Figure 128: Perceptions of yellow fats and oils, June 2011
Figure 129: Most common perceptions of butter, by demographics, June 2011
Figure 130: Next most common perceptions of butter, by demographics, June 2011
Figure 131: Most common perceptions of spread, by demographics, June 2011
Figure 132: Next most common perceptions of spreads, by demographics, June 2011
Figure 133: Most common perceptions of vegetable oil, by demographics, June 2011
Figure 134: Next most common perceptions of vegetable oil, by demographics, June 2011
Figure 135: Most common perceptions of olive oil, by demographics, June 2011
Figure 136: Next most common perceptions of olive oil, by demographics, June 2011
Figure 137: Perceptions of yellow fats and oils, by most popular types of yellow fats bought, June 2011
Figure 138: Perceptions of yellow fats and oils, by next most popular types of yellow fats bought, June 2011
Figure 139: Perceptions of yellow fats and oils, by other types of yellow fats bought, June 2011
Figure 140: Perceptions of yellow fats and oils, by most popular types of oils bought, June 2011
Figure 141: Perceptions of yellow fats and oils, by next most popular types of oils bought, June 2011
Figure 142: Perceptions of yellow fats and oils, by other types of oils bought, June 2011
APPENDIX – CONSUMER – ATTITUDES TOWARDS YELLOW FATS AND EDIBLE OILS
Figure 143: Attitudes towards yellow fats and oils, June 2011
Figure 144: Agreement with statements ‘I buy whatever butter/spread is on special offer’ and ‘I have switched to supermarket own-label butter/spread to save money’, by demographics, June 2011
Figure 145: Agreement with the statements ‘I have switched from butter to spreads to save money’ and ‘Taste is more important than health when it comes to butter and spreads’, by demographics, June 2011
Figure 146: Agreement with the statements ‘Health concerns affect my usage/choice of butter and spreads’ and ‘I'm using more butter/spreads, because I'm baking/cooking more at home’, by demographics, June 2011
Figure 147: Agreement with the statements ‘I use the same brand for different spread/butter needs (eg cooking, baking, for toast)’ and ‘I would pay more for butter that is committed to higher animal welfare’, by demographics, June 2011
Figure 148: Agreement with the statements ‘I would pay more for butter/spreads that offers a fair price to farmers’ and ‘I buy the healthiest oils possible’, by demographics, June 2011
Figure 149: Agreement with the statements ‘I buy more expensive (eg extra virgin) oils because they are better for you’ and ‘Flavoured oils are a good way to spice up dishes’, by demographics, June 2011
Figure 150: Attitudes towards yellow fats and oils, by most popular types of yellow fats bought, June 2011
Figure 151: Attitudes towards yellow fats and oils, by next most popular types of yellow fats bought, June 2011
Figure 152: Attitudes towards yellow fats and oils, by other types of yellow fats bought, June 2011
Figure 153: Attitudes towards yellow fats and oils, by most popular types of oils bought, June 2011
Figure 154: Attitudes towards yellow fats and oils, by next most popular types of oils bought, June 2011
Figure 155: Attitudes towards yellow fats and oils, by other types of oils bought, June 2011
APPENDIX – TARGET GROUPS
Figure 156: Perceptions of yellow fats and oils, by target groups, June 2011
Figure 157: Attitudes towards yellow fats and oils, by target groups, June 2011
Figure 158: Statements on health and healthy lifestyle, by target groups, June 2011
Figure 159: Target groups, by demographics, June 2011

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