What would you say have been the latest trends and developments in butter production?
Stuart Ibberson: In terms of market trends and developments, I think there’s a definite move towards more natural products and a move away from the highly processed. Consumers are re-evaluating what’s meant by ‘health’, and this is seen in the declining volumes of brands such as Flora (which lost its No 1 spot to Lurpak in 2007) and the delist in the last year of St Ivel Gold.
A decade or more ago, butter had a bad press – portrayed as an unhealthy product because of the ‘fat’ debate. Since then, a lot of work has gone into new product development and marketing to change that. Has butter recovered from that position, and is the growing focus on obesity going to affect sales?
Ibberson: Supporting what I’ve said above about the trend towards more natural products, there has also been a lot of positive publicity from the likes of Jamie Oliver and Hugh Fearnley-Whittingstall and many other food writers highlighting the dangers of an over-processed diet, which has prompted people to reappraise their diets. I think people think about more than just fat content, and butter has benefited from that. We also know that consumers have come back to that sensible mantra of ‘everything in moderation’, so they would prefer to have a little bit of something that tastes great and is natural rather than worry about the fat content of everything they eat. There are too many messages out there for them to take in, so common sense kicks in!
The two biggest sectors of the butter, spreads and margarine market (BSM) are spreadables (up 15% in sales on last year) and block butter (up 20% on last year). As a comparison, the block butter market is worth three times the low fat BSM market.
We’ve seen huge growth in the spreadable butter sector. Is that set to continue, and what has been the impact on block butters?
Ibberson: Block butter is actually in bigger growth than spreadables at the moment, though we predict that the spreadable sector will continue to grow as it satisfies the needs that are driving the consumer trends.
There has been a lot of new product development – lighter versions, unsalted varieties, butter and vegetable oil mixes, butter with omega-3, smaller packs, butters with herbs and so on. Is there more new product development to come? What is this likely to be?
Ibberson: We’re constantly looking at developing new products that fit with consumer trends and have had great success over the last few years. Lurpak Unsalted Spreadable is now worth £11.5m, Lurpak Organic Spreadable £1.7m (in one year) and Anchor Unsalted Block £0.9m (since September 2008), while Lurpak Organic, launched in 2007, has grown overall sales of organic BSM without cannibalising on existing products.
Is the economic downturn going to affect butter sales?
Ibberson: The economic downturn is a challenge for all fast-moving consumer goods products and categories, and butter will not be any different. However, butter isn’t a ‘luxury’ item and forms part of people’s regular weekly shop, so it should be able to withstand the downturn better than many other categories.
It could be argued that we might see some positive impact, as people are being encouraged to cook from scratch rather than buying ready meals. They might also be thinking twice about grabbing a latte and muffin on their way to work, and perhaps get up 15 minutes earlier and have a slice of toast before they leave the house, and even make their own sandwiches to take to work!
What are the key messages about butter that you try to get across in your marketing campaigns?
Ibberson: That butter is the most natural and tasty product in the market.
Geoff Platt is editor of Dairy Innovation magazine. Please subscribe by clicking here.
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