Butter revival batters margarine sales in UK

By Chris Mercer

- Last updated on GMT

Related tags Butter

Butter is making a comeback on lower fat margarine as UK consumers
trade up to treat themselves, but the overall fats market is
shrinking and imported brands are taking the biggest winnings.

Britons munched their way through 107,000 tonnes of butter last year, eight per cent more than in 2002, as tradition and purity help butter to fight back against margarine spreads, says a new report by Mintel​.

UK butter consumption is expected to hit 110,000 tonnes this year. And a 15 per cent increase in value between 2002 and 2004 have helped to give the segment a 43 per cent share of Britain's £849m yellow fats market, up from 39 per cent two years earlier.

Claire Birks, author of the report, told www.DairyReporter.com​ that butter's resurgence had come from consumers placing more importance on having oils in their diets, compared to the low-fat fads of the 1980s and 1990s. The trend also reflected peoples' desire to cut out processed foods, she said.

"People are reassured by the authenticity of butter, and it certainly has taste going for it."

The popularity of margarine has fallen away in the last two years, with consumption dropping five per cent and its value share of Britain's yellow fats market dipping in direct comparison to butter from 61 per cent to 57 per cent.

Birks said, however, that convenience was still the key for consumers and that spreadable butter was fuelling the butter revival.

There was 29 per cent more spreadable butter in the UK last year than in 2002 and the segment's value rose 33 per cent in the same period.

Butter's better performance in market value rather than volume is an encouraging sign for dairy processors as they focus on increasing earnings and escaping much of the dairy sector's commodity status.

Yet, the UK's overall yellow fats market has shrunk from 385m tonnes in 2000 to an estimated 371m tonnes this year, as consumers use them less and less at home.

And, it is imported brands that have creamed off the higher takings so far. Birks said that Lurpak butter, made by Arla Foods in Denmark, had risen 21 per cent in sales mainly thanks to the success of its spreadable and 'light' spreadable ranges.

Lurpak had around a 41 per cent share of the UK butter market in 2004, and its success has forced a slight slip in sales for Arla's other imported brand, Anchor. These two were the UK's top butter brands in 2004, according to a study by AC Nielsen​.

"This is a clear example of where a lack of innovation and marketing has allowed other countries to dominate our domestic market,"​ said Britain's Milk Development Council in a recent report.

It said Britain's growing dairy trade deficit showed the country was still lagging behind other European countries in increasingly important added value product markets.

Functional spreads are the leading light for the UK margarine sector, and DairyReporter​ will publish a separate report on these.

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