Yellow Fats and Edible Oils - UK - September 2015

OVERVIEW
What you need to know
Products covered in this report
Definition
EXECUTIVE SUMMARY
The market
Figure 1: UK retail value sales of yellow fats and edible oils, 2010-20
Yellow fats
Speciality oil is in growth but cooking and olive oils decline
Companies, Brands and Innovation
Lurpak posts volume growth in a declining market
Unilever has been hit the hardest by spreads’ woes
Competition from own-label heats up
Kerrygold pushes pasture grazing
The consumer
Block butter is the most widely bought yellow fat
Figure 2: Yellow fats bought, by type, July 2013, May 2014 and July 2015
Spray cooking oils now bought by one in six
Figure 3: Edible oils bought, by type, July 2013, May 2014 and July 2015
Easy-to-use is the most important factor for consumers when buying yellow fats
Figure 4: Factors influencing choice of butter/spread, July 2013 and July 2015
More than two thirds see taste as important when buying block butter
Figure 5: Attitudes towards yellow fats and edible oils, July 2015
What we think
ISSUES AND INSIGHTS
Spreads segment continues its sharp decline
The facts
The implications
Sales of cooking and olive oil are struggling
The facts
The implications
Butter brands must do more to drive home their flavour credentials
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Yellow fats and edible oils decline continues in 2015
Butter sees strong volume growth
Spreads continue their sharp decline
Cooking and Baking spreads segment in poor shape
Speciality oil is in growth but cooking and olive oils decline
UK wholesale butter and bulk cream prices continue to fall
Adverse weather hits EU olive oil production, causing prices to rise
Changing bread eating habits impact purchases of spreads
MARKET SIZE AND FORECAST
Volume decline continues in 2015
Figure 6: UK retail value sales of yellow fats and edible oils, 2010-20
Figure 7: UK retail value sales of yellow fats and edible oils, 2010-20
SEGMENT PERFORMANCE
Butter volumes are in healthy growth
Figure 8: UK retail value and volume sales of butter, 2010-20
Figure 9: UK retail value sales of butter, 2010-20
Spreadable butter benefits from spreads’ woes
Figure 10: UK retail value sales of butter, by type, 2010-14
Spreads see value and volume decline continue
Figure 11: UK retail value and volume sales of spreads, 2010-20
Figure 12: UK retail value sales of spreads, 2010-20
Figure 13: UK retail value and volume sales of spreads, by type, 2012-14
Cooking and baking spreads suffer from butter’s resurgence
Figure 14: UK retail value and volume sales of cooking and baking spreads, 2010-20
Figure 15: UK retail value sales of cooking and baking spreads, 2010-20
Edible oils’ decline is expected to continue
Figure 16: UK retail value and volume sales of edible oils, 2010-20
Figure 17: UK retail value sales of edible oils, 2010-20
Figure 18: UK retail value and volume sales of edible oils, by type, 2012-14
MARKET DRIVERS
Butter gains positive coverage in the mainstream UK media
UK wholesale cream and butter prices continue to fall
Figure 19: UK wholesale prices of unsalted butter and bulk cream, January 2010-July 2015
Figure 20: Consumer Price Index of butter, January 2010-July 2015
Adverse weather hits EU olive oil production, causing prices to rise
Changing bread eating habits hamper purchases of spreads
Bright future for extra virgin olive oil?
KEY PLAYERS – WHAT YOU NEED TO KNOW
Dairy Crest reformulates Clover spread and adds spray oils
Lurpak discontinues its four-strong Cook’s Range
Kerrygold pushes pasture grazing
Lurpak posts volume growth in a declining market
Müller Group set to be a major yellow fats player
Unilever is hit hardest by downturn in spreads’ fortunes
Frylight posts market-beating value growth
Napolina is the only brand to buck the trend in olive oil and post growth
BRAND RESEARCH – YELLOW FATS AND EDIBLE OILS
What you need to know
Brand map
Figure 21: Attitudes towards and usage of selected brands, June 2015
Key brand metrics
Figure 22: Key metrics for selected brands, June 2015
Brand attitudes: Lurpak’s foodie focus is seen as worth paying more for
Figure 23: Attitudes, by brand, June 2015
Brand personality: ICBINB must address its tired and unappealing personality
Figure 24: Brand personality – macro image, June 2015
Flora excels in propagating a healthy image
Figure 25: Brand personality – micro image, June 2015
 BRAND ANALYSIS
Lurpak
Figure 26: User profile of Lurpak, June 2015
Flora
Figure 27: User profile of Flora, June 2015
Kerrygold
Figure 28: User profile of Kerrygold, June 2015
Clover
Figure 29: User profile of Clover, June 2015
I Can’t Believe It’s Not Butter
Figure 30: User profile of I Can’t Believe It’s Not Butter, June 2015
MARKET SHARE
Brands drag down total market value and volume
Lurpak posts volume growth in a declining market
Unilever has been hit the hardest by spreads’ woes
Müller poised to become a major player in yellow fats
Figure 31: Leading brands’ sales and shares in the UK retail yellow fats market, by value and volume, 2013/14 and 2014/15
Figure 32: Leading manufacturers’ sales and shares in the UK retail yellow fats market, by value and volume, 2013/14 and 2014/15
Frylight posts market-beating value growth
Figure 33: Leading brands’ sales and shares in the UK retail cooking oils market, by value and volume, 2013/14 and 2014/15
Figure 34: Leading manufacturers’ sales and shares in the UK retail cooking oils market, by value and volume, 2013/14 and 2014/15
Brands suffer the most in olive oil
Figure 35: Leading brands’ sales and shares in the UK retail olive oils market, by value and volume, 2013/14 and 2014/15
Figure 36: Leading manufacturers’ sales and shares in the UK retail olive oils market, by value and volume, 2013/14 and 2014/15
BRAND COMMUNICATION AND PROMOTION
Margarine and spreads accounts for three fifths of adspend in the market
Butter ad spend falls
Stork returns to TV after 20-year hiatus
Figure 37: Recorded above-the-line online, display and direct mail total advertising expenditure in the yellow fats and edible oils market, 2011-15
Boost in lard/cooking fat adspend support is short-lived
Adspend on oils halves in 2014
Kerrygold pushes associations between its butter and ‘lush green grass’
Unilever agrees display ad deal for Flora and Stork
Lurpak launches Freestyle food month
Clover teams up with McCain Jackets for a sampling campaign
Figure 38: Top recorded above-the-line online, display and direct mail total advertising expenditure on the yellow fats and edible oils market, by top ten brands by adspend, 2011-15
LAUNCH ACTIVITY AND INNOVATION
Oil accounts for three fifths of new launches in 2014
Figure 39: NPD in the UK yellow fats and edible oils market, 2011-15
Flavoured oils help boost Tesco and Lidl’s share of new launches
Operators continue to move into speciality oils
Lurpak Cook’s Range boosts Arla’s share of launches
Manufacturers and retailers flag up ‘real butter’ content
Figure 40: NPD in the UK yellow fats and edible oils market, by top 10 ultimate company, 2011-15
Operators add value to oil through spray and pourable formats
Spray
Ease of use – pouring
New wave of nut oils
THE CONSUMER – WHAT YOU NEED TO KNOW
Block butter is the most widely bought yellow fat
Majority of Brits buy same amount of spreads as a year ago
Sunflower, vegetable and virgin/extra virgin olive oil are the most widely bought oil types
One in six consumers buy cold-pressed rapeseed oil
Spray cooking oils now bought by one in six
Easy-to-use is the most important factor for consumers
Olive oil ranks highest for healthiness of selected oils
Scope for nuts to leap from dairy alternative drinks to dairy-free spreads
PURCHASING HABITS – YELLOW FATS
Younger consumers are more likely to buy butter
Cholesterol-lowering spreads more popular with the young
Figure 41: Yellow fats bought, by type, July 2013, May 2014 and July 2015
Majority of Brits buy same amount of spreads as a year ago
Figure 42: Changes in purchase of spreads compared to a year ago, July 2015
Figure 43: Reasons for buying less spreads than a year ago, July 2015
PURCHASING HABITS – EDIBLE OILS
Penetration of edible oils is high
Spray cooking oils now bought by one in six
One in 10 16-34s buy coconut oil
Figure 44: Edible oils bought, by type, July 2013, May 2014 and July 2015
16-34s are core purchasers of cold-pressed rapeseed oil
Figure 45: Purchase of cold-pressed rapeseed oil to use at home in the last 6 months, by age group, July 2015
Rapeseed oil adspend is still very small but growing
FACTORS INFLUENCING CHOICE OF BUTTER AND SPREADS
Easy-to-use is the most important factor for consumers
Brands playing on natural themes are well-placed
British origin/ingredients
Health factors matter to more than half of users/buyers
Figure 46: Factors influencing choice of butter/spread, July 2013 and July 2015
QUALITIES ASSOCIATED WITH EDIBLE OILS
Olive oil ranks highest for healthiness among selected oils
Figure 47: Qualities associated with selected types of edible oils, July 2015
Less than a third see each type of oil as a store cupboard staple
Few see each type of oil as responsibly sourced
Just 14% see cold-pressed rapeseed oil as good for pan-frying
Olive oil and coconut oil seen most widely as expensive
ATTITUDES TOWARDS YELLOW FATS AND EDIBLE OILS
More than two thirds see taste as important when buying block butter
Figure 48: Attitudes towards yellow fats and edible oils, July 2015
More required to promote coconut oil as an alternative to spreads
Can nuts make the leap from dairy alternative drinks to dairy-free spreads?
A place for argan oil in mainstream grocery?
Scope for butters flavoured with condiments
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research
APPENDIX – MARKET DRIVERS
Figure 49: Trends in the age structure of the UK population, 2010-20
Figure 50: Trends in the age structure of the UK population, 2010-2020
APPENDIX – BRAND COMMUNICATION AND PROMOTION
Figure 51: Recorded above-the-line online, display and direct mail total advertising expenditure on the yellow fats and edible oils market, by category, 2011-14
Figure 52: Recorded above-the-line online, display and direct mail total advertising expenditure on rapeseed oil brands, 2011-15
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 53: NPD in the UK yellow fats and edible oils market, by product category, by brand vs own-label, 2014
APPENDIX – MARKET SIZE AND FORECAST
Forecast Methodology
Total market
Figure 54: Forecast retail sales of yellow fats and edible oils, by volume, 2010-20
Figure 55: Best- and worst-case forecasts for retail sales of yellow fats and edible oils, by value, 2015-20
Figure 56: Best- and worst-case forecasts for retail sales of yellow fats and edible oils, by volume, 2015-20
Butter
Figure 57: Forecast retail sales of butter, by volume, 2010-20
Figure 58: Best- and worst-case forecasts for retail sales of butter, by value, 2015-20
Figure 59: Best- and worst-case forecasts for retail sales of butter, by volume, 2015-20
Spreads
Figure 60: Forecast retail sales of spreads, by volume, 2010-20
Figure 61: Best- and worst-case forecasts for retail sales of spreads, by value, 2015-20
Figure 62: Best- and worst-case forecasts for retail sales of spreads, by volume, 2015-20
Cooking and baking spreads
Figure 63: Forecast retail sales of cooking and baking spreads, by volume, 2010-20
Figure 64: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by value, 2015-20
Figure 65: Best- and worst-case forecasts for retail sales of cooking and baking spreads, by volume, 2015-20
Edible oils
Figure 66: Forecast retail sales of edible oils, by volume, 2010-20
Figure 67: Best- and worst-case forecasts for retail sales of edible oils, by value, 2015-20
Figure 68: Best- and worst-case forecasts for retail sales of edible oils, by volume, 2015-20