Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Health trends challenge market even as rising dairy costs create sales spikes
- Competition from healthier alternatives and market’s own pricing
- Butter loses share to margarine
- Discount/supercenters grow on convenience and pricing
- Concerns about health and weight
- Heart disease increasing among women
- Consumers concerned about economy and food prices
- Healthy positioning doesn’t guarantee success
- Land O’Lakes changes packaging for butter in multiple ways
- Healthy products get healthier and more convenient for cooking/baking
- How respondents use butter and margarine
- Respondents’ brand preferences
- Attitudes and changing opinions on healthy eating
- Significant differences in respondents’ use by race/ethnicity
- Higher usage in blacks and Hispanics
- Income and butter/margarine use
- Health concerns in blacks and Hispanics
Insights and Opportunities
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- Partner with other products to create flavors and uses
- Add flavor to butter to increase cooking and other usage
- Convenience packaging
- Smaller package sizes meet needs of small households and infrequent bakers
- Allergen-free products aimed at children with ADD/ADHD
- Emphasize gluten-free, soy-free, dairy-free, and lack of artificial colors as many more parents are searching for low-allergen products for children.
- Single-use and festive packaging
- Holiday packaging for use at table
- Ethical or green packaging
- Hormone-free or organic butter will set itself apart by using recyclable packaging or reusable packaging
- What else can I do with it?
- In-store promotional materials and sampling shows other uses for flavored butters beyond bread
Fast Forward Trends
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- Authenticity
- What’s it about?
- How does authenticity relate to butter?
- Butter transports us to a slower, simpler time
- Baking connects us to family and tradition
- What should butter manufacturers do?
- How does authenticity relate to margarine?
- Margarine has always marketed authenticity via ads
- Now margarine incorporates authenticity via ingredients
- Slow It All Down
- What's it about?
- How does slow it all down relate to butter?
- Fit or Fat?
- What’s it about?
- How can butter thrive in the fit or fat dichotomy?
- Broaden the universe of consumption in moderation
Market Size and Forecast
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- Key points
- Mature market chained to materials costs, but innovation can help
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- Figure 1: Total U.S. sales and forecast of butter/margarine and table spreads at current prices, 2002-12
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- Figure 2: Total U.S. sales and forecast of butter/margarine and table spreads at inflation adjusted prices, 2002-12
- Wal-Mart sales
Competitive Context
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- Cooking sprays, cooking oil, grilling offer alternatives to butter/margarine for cooking
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- Figure 3: FDMx sales of olive oil, 2002-07
- Drive against use of rBST in milk production likely to increase price of butter, and possibly lower use
Segment Performance
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- Key points
- Consumers not trading butter for margarine/table spreads
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- Figure 4: U.S. FDMx sales and forecast of butter and margarine/table spreads, by segment, 2002-12
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- Figure 5: U.S. FDMx sales of butter and margarine/table spreads, 2005-07
Segment Performance—Butter
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- Key points
- Milk prices directly affect butter sales and pricing
- Prices spike in 2004…
- …leading to over-production
- Butter prices increase but volume sales decline
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- Figure 6: FDMx value and volume sales of butter and average price per pound, 2002-07
- Figure 7: FDMx sales of butter at current prices, 2002-12
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- Figure 8: FDMx sales of butter at constant 2007 prices, 2002-12
Segment Performance—Margarine and Table Spreads
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- Key points
- Less volatility, but also declining sales as consumer habits change
- Consumers embrace healthier cooking methods
- Economic uncertainty may result in more cooking
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- Figure 9: FDMx dollar and volume sales of margarine/spreads/butter blends and average price per pound, 2002-07
- Figure 10: FDMx sales and forecast of margarine and table spreads at current prices, 2002-12
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- Figure 11: FDMx sales and forecast of margarine and table spreads at constant prices, 2002-12
Retail Channels
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- Key points
- Discount/supercenters continue to grow sales
- Convenience stores and drug stores the biggest losers
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- Figure 12: U.S. sales of butter and margarine/table spreads, by retail channel, 2005-07
Retail Channels—Supermarkets and Other Food Stores
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- Key points
- Growing food prices only reason for growing sales
- Continued consolidation, though slowing
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- Figure 13: U.S. sales of butter and margarine/table spreads at supermarkets and other food stores, 2002-07
Retail Channels—Discount/Supercenter/Warehouse Club
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- Key points
- Supercenters offer multiple levels of private label pricing
- Sales likely to continue to cannibalize other channels
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- Figure 14: U.S. sales of butter and margarine/table spreads, at discount/supercenter/warehouse clubs, 2002-07
Retail Channels— Convenience Stores/Drug Stores and Other
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- Key points
- Not the only 24-hour retail
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- Figure 15: U.S. sales of butter and margarine/table spreads, at c-stores/drug stores and other, 2002-07
Retail Channels—Natural Channel/SPINS
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- Figure 16: Natural product supermarket retail sales of butter and spreads, at current and constant prices, 52 weeks ending march 22, 2006-08
- Natural channel sales by segment
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- Figure 17: Natural product supermarket retail sales of butter and spreads, by segment, 52 weeks ending march 22, 2006-08
- Natural supermarket channel sales of butter and spreads
- Butter sales
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- Figure 18: Natural product supermarket retail sales of butter at current and constant prices, 52 weeks ending march 22, 2006-08
- Organic butter sales
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- Figure 19: Natural product supermarket retail sales of eggs, by organic, 2006-08
- Spread sales
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- Figure 20: Natural product supermarket retail sales of spreads at current prices and constant, ending march 22, 2006-08
- Organic spreads sales
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- Figure 21: Natural product supermarket retail sales of spreads, by organic, 2006-08
- Brand tables
- Butter and spreads
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- Figure 22: Manufacturer brand natural supermarket sales of butter and spreads, 2006 and 2008
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Market Drivers
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- Lifestyle and attitude changes impact this market
- All good things in moderation redefines butter
- There is more to food than fat and calories
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- Figure 23: U.S. per capita butter consumption, 2000-06
- Health concerns are still an issue in this market
- Overweight and obesity are serious problems in the U.S.
- Are consumers changing their diets?
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- Figure 24: Adult population over age 20 and adult obese population, estimates, 2002-07
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- Figure 25: Share of children aged 2-19 considered overweight, by age, 1971-2004
- Figure 26: Reason to watch diet, 2005 and 2007
- Heart health concerns hit women (and this market)
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- Figure 27: Prevalence of cardiovascular diseases among adults aged 20 and older, by type, by gender, 2005
- Figure 28: Prevalence of cardiovascular disease in Americans aged 20 and older by age and gender, NHANES 1999-2002
- Commodity prices continue to rise
- Driving up food prices
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- Figure 29: Changes in food prices, at and away from home, 2004-08
Leading Companies
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- Key points
- Little overlap between segments
- Healthier for you suppliers not guaranteed success
- Private label not immune
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- Figure 30: Manufacturer sales of butter and margarine/table spreads at FDMx, 2005-07
Brand Share—Butter
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- Key points
- Fragmented supply structure
- Organic butter sales inconsistent
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- Figure 31: FDMx brand sales of butter in the U.S., 2005 and 2007
Brand Share—Margarine and Table Spreads
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- Key points
- Premium spreads with plant sterols for lowering cholesterol levels are not all succeeding
- Smart Balance is succeeding
- How is Smart Balance succeeding?
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- Figure 32: Selected functional spreads prices in Indianapolis, indiana, april 2008
- Olive oil spreads grow
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- Figure 33: FDMx brand sales of margarine and table spreads in the U.S., 2005 and 2007
Brand Qualities
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- Do consumers want to buy food products that seem like pharmaceuticals?
- How is Smart Balance winning consumers?
- What are well established brands doing to drive perceptions?
- Margarine brands try to replace butter in baking, cooking, or table
- Butter brands struggle with private label for share
- Land O’Lakes offers a consistent image to butter consumers
Innovation and Innovators
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- Land O’Lakes half-pound packaging and half sticks add convenience
- Adapting to regional preferences
- Prominent omega-3 labeling
- Healthy spreads made convenient for baking
Advertising and Promotion
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- Overview
- Individual campaigns
- Unilever
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- Figure 34: I Can’t Believe its not butter #1, 2007
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- Figure 35: I Can’t Believe its not butter #2, 2007
- Country Crock
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- Figure 36: Shedd’s spread country crock ad, 2007
- Smart Balance (formerly GFA)
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- Figure 37: Smart balance ad #1, 2007
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- Figure 38: Smart balance ad #2, 2007
Butter and Margarine Usage
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- Trended usage of butter, margarine, and margarine spreads
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- Figure 39: Usage of butter, margarine, and margarine spreads for 2003, 2005, and 2007
- Trended household volume usage of butter and margarine
- Trended volume usage of butter and margarine/margarine spread
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- Figure 40: Usage of butter, margarine, and margarine spreads, by amount, 2003, 2005, and 2007
- Current usage of butter, margarine, and spreads
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- Figure 41: Usage of butter, margarine, and spreads, by gender, March 2008
- Preferences for everyday use
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- Figure 42: Everyday usage of butter, margarine and spreads, March 2008
Product Preferences Based on Type of Food Preparation
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- Preferences for baking
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- Figure 43: Usage of butter, margarine, and spreads for baking, March 2008
- Preferences for stove-top cooking
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- Figure 44: Usage of butter, margarine, and spreads for stove top cooking, by gender, March 2008
Brands
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- Popularity of brands
- Brand preferences by household income
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- Figure 45: Use of butter brands, by household income, May 2006-June 2007
- Brand preferences by region
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- Figure 46: Use of butter brands, by region of residence of respondent, May 2006-June 2007
- Margarine and margarine spreads
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- Figure 47: Use of margarine/margarine spread brands, by household income, May 2006-June 2007
Attitudes and Motivations
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- General behaviors about and attitudes towards cooking habits
- Key findings
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- Figure 48: Frequency of cooking, by gender, March 2008
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- Figure 49: Frequency of cooking, by age, March 2008
- Beliefs and behaviors related to butter use
- Key findings
- Beliefs and behaviors related to margarine use
- Key findings
Consumer Behavior: Switching Products
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- Key findings
- Behavioral changes by age
- Behavioral changes by income
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- Figure 53: Behavioral changes with regard to butter use, by household income, March 2008
Consumer Attitudes: Cooking, Shopping, Flavor, and Health
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- Consumer attitudes about cooking and shopping
- Key findings
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- Figure 54: Attitudes about shopping and cooking, by gender, March 2008
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- Figure 55: Attitudes about shopping and cooking, by age, March 2008
- Consumer attitudes about flavor
- Key findings
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- Figure 56: Butter and margarine flavor preferences, by gender, March 2008
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- Figure 57: Butter and margarine flavor preferences, by age, March 2008
- Health beliefs
- Key findings
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- Figure 58: Health beliefs about cooking and butter/margarine, by gender, March 2008
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- Figure 59: Health beliefs about cooking and butter/margarine, by age, March 2008
Race and Ethnicity
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- Preferences and usage differences by race/ethnicity
- Key points
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- Figure 60: Usage of butter, margarine, and margarine spreads for 2007
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- Figure 61: Usage of butter, margarine, and margarine spreads for 2007
- Usage differences by race and income
- Key points
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- Figure 62: Usage of butter, margarine, and spreads, by race/ethnicity and household income, March 2008
- Brand preference by race and income
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- Figure 63: Use of butter brands, by race/ethnicity, May 2006-June 2007
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- Figure 64: Use of margarine/margarine spread brands, by race/ethnicity, May 2006-June 2007
Consumer Behavior: Switching Products by Race and Income
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- Key findings
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- Figure 65: Behavioral changes with regard to butter use, by race/ethnicity and household income, March 2008
Attitudinal and Behavioral Differences by Race
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- Consumer attitudes towards cooking and shopping by race and income
- Key points
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- Figure 66: Attitudes towards shopping and cooking, by race/ethncity, March 2008
- Figure 67: Attitudes about shopping and cooking, by race/ethnicity and income, March 2008
- Consumer attitudes about flavor by race and income
- Key points
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- Figure 68: Butter and margarine flavor preferences, by race/ethnicity, March 2008
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- Figure 69: Butter and margarine flavor preferences, by race/ethnicity and income, March 2008
- Health beliefs by race and income
- Key points
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- Figure 70: Health beliefs about cooking and butter/margarine, by race/ethnicity, March 2008
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- Figure 71: Health beliefs about cooking and butter/margarine, by race/ethnicity and income, March 2008
Cluster Analysis—Indiscriminate Spreaders, Convenient Tubbies, and Disloyal Butter Sticklers
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- Key points
- Indiscriminate Spreaders cook often and love butter and margarine
- Indiscriminate Spreaders are positive about butter
- But they also like margarine
- Convenient Tubbies
- Disloyal Butter Sticklers
- Demographic and attitudinal tables
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- Figure 72: Butter and margarine user, by cluster and age, March 2008
- Figure 73: Butter and margarine user, by cluster and income group, March 2008
- Figure 74: Butter and margarine user, by cluster and race, March 2008
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- Figure 75: Butter and margarine user by cluster and Hispanic origin, March 2008
- Figure 76: How often do you personally cook or prepare meals at home? by user cluster, March 2008
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- Figure 77: Which of the following products have you used in the last 3 months? by cluster, March 2008
- Figure 78: Which of the following do you primarily use for baking? by cluster, March 2008
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- Figure 79: Which of the following do you use most often when you are cooking or sautéing something on the stove (e.g., frying eggs, potatoes, vegetables, meats, etc.)? by cluster, March 2008
- Figure 80: Thinking specifically about butter, margarine, and similar spreads, for everyday use on toast, plain bread, or sandwiches, which of the following do you use most often? by cluster, March 2008
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- Figure 81: Please indicate whether you agree or disagree with the following statements about butter and butter purchases by cluster, March 2008
- Figure 82: Please indicate whether you agree or disagree with the following statements about margarine and margarine purchases by cluster, March 2008
- Methodology
Custom Consumer Groups
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- Asians and Hispanics may prefer flavored butter and margarine products
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- Figure 83: Usage of butter, margarine, and spreads, by race/ethnicity, March 2008
IRI/Builders Panel Data
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- Consumer insights—butter and margarine
- Butter
- Butter: brand leaders by penetration
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- Figure 84: Top 10 butter brands, by household penetration for the 52 weeks ending June 24, 2007
- Butter: brand leaders by loyalty
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- Figure 85: Top 5 butter brands, brand loyalty for the 52 weeks ending June 24, 2007
- Margarine, spreads, and butter blends
- Margarine, spreads, and butter blends: by household penetration
- Margarine, spreads, and butter blends: by brand loyalty
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- Figure 86: Top 10 margarine/spreads/butter blends brands, by household penetration for the 52 weeks ending June 24, 2007
- Figure 87: Top 10 margarine, spreads, and butter blends brands, by brand loyalty for the 52 weeks ending June 24, 2007
Appendix: IRI/Builders Panel Data Definitions
Appendix: Other Useful Consumer Tables
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- Usage of butter, margarine, and margarine spreads
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- Figure 88: Usage of butter, margarine, and margarine spreads, by age, May 2006-June 2007
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- Figure 89: Usage of butter, margarine, and margarine spreads, by household Income, May 2006-June 2007
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- Figure 90: Usage of butter, margarine, and margarine spreads, by number of people in household, May 2006-June 2007
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- Figure 91: Usage of butter, margarine, and margarine spreads, by number of people in household, May 2006-June 2007
- Use of margarine by type of oil used in production
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- Figure 92: Types of margarine used, by type, May 2006-June 2007
- Usage of butter, margarine, and spreads by type
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- Figure 93: Usage of butter, margarine, and spreads, by age, March 2008
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- Figure 94: Usage of butter, margarine, and spreads, by race/ethnicity, March 2008
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- Figure 95: Usage of butter, margarine, and spreads, by household income, March 2008
- Preferences for baking
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- Figure 96: Usage of butter, margarine, and spreads for baking, by gender, March 2008
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- Figure 97: Usage of butter, margarine, and spreads for baking, by age, March 2008
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- Figure 98: Usage of butter, margarine, and spreads for baking, by race/ethnicity, March 2008
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- Figure 99: Usage of butter, margarine, and spreads for baking, by household income, March 2008
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- Figure 100: Usage of butter, margarine, and spreads for baking, by presence of children in household, March 2008
- Preferences for stove top cooking
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- Figure 101: Usage of butter, margarine, and spreads for stove top cooking, by gender, March 2008
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- Figure 102: Usage of butter, margarine, and spreads for stove-top cooking, by age, March 2008
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- Figure 103: Usage of butter, margarine, and spreads for stove top cooking, by race/ethnicity, March 2008
- Preferences for everyday use
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- Figure 104: Everyday usage of butter, margarine and spreads, by gender, March 2008
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- Figure 105: Everyday usage of butter, margarine and spreads, by age, March 2008
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- Figure 106: Everyday usage of butter, margarine and spreads, by race/ethnicity, March 2008
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- Figure 107: Everyday usage of butter, margarine and spreads, by household income, March 2008
- Butter brands usage
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- Figure 108: Use of butter brands, by number of people in housedhold, May 2006-June 2007
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- Figure 109: Use of butter brands, by number of children in household, May 2006-June 2007
- Beliefs and behaviors related to butter use
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- Figure 110: Beliefs and behavior related to butter use, by age, March 2008
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- Figure 111: Beliefs and behavior related to butter use, by race/ethnicity March 2008
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- Figure 112: Beliefs and behavior related to butter use, by household income, March 2008
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- Figure 113: Beliefs and behavior related to butter use, by region of residence, March 2008
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- Figure 114: Beliefs and behavior related to butter use, by presence of children in household, March 2008
- Beliefs and behaviors related to margarine use
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- Figure 115: Beliefs and behavior related to margarine use, by age, March 2008
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- Figure 116: Beliefs and behavior related to margarine use, by household income, March 2008
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- Figure 117: Beliefs and behavior related to margarine use, by region of residence, March 2008
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- Figure 118: Beliefs and behavior related to margarine use, by presence of children in household, March 2008
- Behavioral changes with regard to butter use
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- Figure 119: Behavioral changes with regard to butter use, by gender, March 2008
- Attitudes toward meal preparation
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- Figure 120: Attitudes toward meal preparation, by age, March 2008
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- Figure 121: Attitudes toward meal preparation, by race/ethnicity, March 2008
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- Figure 122: Attitudes toward meal preparation, by household income, March 2008
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- Figure 123: Attitudes toward meal preparation, by household income, March 2008
Appendix: Trade Associations
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