Progressive Grocer - January 2011 - (Page 70)

Frozen/Refrigerated Promise for the Future Margarine enjoys a richer outlook than butter as more consumers reach for healthier spreads. Meanwhile, butter is expected to go about the same distance in the other direction — down 2.5 percent during 2011 to 2015, Mintel projects. “Volume sales will decline as consumers tighten budgets even further,” the report finds. “Butter prices in June 2010 were 5.8 percent higher than in June 2009, and these higher prices, while driving up dollar sales, can also lead consumers to forgo butter purchases or trade down in price to private label butter or margarine/table spreads.” Sea Change By James Dudlicek C hefs and bakers may declare butter to be better, but shoppers looking for table spreads are expected to stray in greater numbers from the genuine creamery article for nutritional as well as economic reasons. That’s the long-range assessment of market analysts, but it’s not necessarily reflective of the here and now, at least to one retail grocer. “In the last five months, I have seen our customers moving toward butter and away from alternatives,” says Ben Ablan, category manager for Chesterfield, Mo.-based regional supermarket chain Dierbergs Markets Inc., responding amid the holiday baking season, when butter usage historically spikes. “I see consumers continuing to move back to butter and away from alternatives.” But that doesn’t mean shoppers aren’t seeking out alternatives. “I have quite a few customers that are asking for soy-free alternatives,” Ablan notes. The analysts at Chicago-based Mintel see such behavior as a growing trend. “Tighter food budgets have begun to affect the FDMx butter segment as sales declined in 2009 and are estimated to decline again in 2010,” says a September 2010 Mintel report on the sweet and savory spreads segment. Dollar sales of butter were about $1.3 billion for the year ending Oct. 30 in food stores (excluding supercenters) with at least $2 million in sales, according to Nielsen Company data. That’s 0.7 percent lower than the same period a year ago; units sold dropped 2.7 percent. Margarine sales for the same period fell nearly 10 percent to just under $1.7 billion, according to Schaumburg, Ill.-based Nielsen, with a 5 percent drop in units sold. Mintel’s long-range forecast for butter alternatives is much sweeter — modest annual sales increases through 2015 after finishing 2010 down 6.6 percent. “Margarine and table spreads sales are expected to experience a CAGR of 2.7 percent during 201115, as health-conscious consumers increasingly seek out betterfor-you products,” Mintel reports. “Generally, BFY products carry a higher price, which should result in slightly higher sales, even if units sold do not increase substantially.” At least one major butter producer concurs with that assessment. “There has been a multiyear trend toward more consumer purchases of private label butter over branded options,” says Jim Walsh, VP of marketing at New Ulm, Minn.-based Associated Milk Producers Inc. (AMPI). “That trend appears to have continued in 2010, probably a reflection of consumers’ continued efforts to trim their food budgets.” This past holiday season, however, was full of promise for retail butter sales. “Right now, we’re seeing butter in the $1.60 range, which has spurred business because retailers can feature a far more attractive price as compared to before Thanksgiving,” Walsh, whose company is a major butter supplier to retail, foodservice and food ingredient customers located primarily in the eastern half of the United States, told PG in early December. Most of AMPI’s butter is sold under private labels, though some is marketed under the State Brand moniker. “I predict that December sales are going to ultimately be stronger than last year’s level,” Walsh says, noting he observed a 5 percent decrease in overall butter sales compared with 2009 before heading into the holiday season. Private label sales of butter accounted for about half of all FDMx sales in 2009-10. “A growing presence of private label organic lines, including butter, has helped to drive sales,” Mintel reports, noting that consumer behavior has been affected by volatile price swings in the butter market. Butter quarters continue to be the biggest seller for both branded and private label products. “We have seen an uptick in demand for unsalted butter as a percentage of the total butter category,” Walsh says. “This may be due to consumers’ health concerns. Also, the popularity of the Food Network and programs featuring professional chefs are driving consumers to try more recipes that call for unsalted butter.” On the other hand, several butter manufacturers — embracing 70 • Progressive Grocer • January 2011 A H E A D O F W H AT ’ S N E X T

Table of Contents for the Digital Edition of Progressive Grocer - January 2011

Progressive Grocer - January 2011
Table of Contents
Nielsen’s Shelf Stoppers/ Spotlight: Medications and Remedies/antacids
Mintel Global New Products: Salty Snacks, Meat Snacks and Popcorn, Q2-Q3 2010
Best Practices: Are We There Yet?
Store of the Month Special Edition: My H-E-B
Marketing: Circular Paradox
Gma President’s Note: United We Stand
Pg Special Events: Pg Honors 2010 Top Women, Green Grocers at Gala Event
Retailer Spotlight: Winn-Dixie’s Awakening
Category Management: Mutual Benefi Ts
Special Section: Progressive Grocer Independent: For Retailers, by Retailers
Condiments: A Matter of Taste
Butter/margarine: Promise for the Future
Desserts: Sweet Solutions
Energy Drinks/shots: Energy Drinks Get a Jolt
Winter Produce: Season of Plenty
Meat Merchandising Study: Meat to Meals
Candles/Air Fresheners: Beyond Common Scents
Front End: The Front End Checkout: A Microeconomic Model of the Store
Cough and Cold: A Tissue Please?
Whole Health: Feeling Good in 2011
Futuretech: It’s a Mad, Mobile World
Progressive Voices: Retailers’ Value Equation = Customer-Benefit Costing
Ovens and Rotisseries: Heating Up
What’s Next: Editors’ Picks for Innovative Products

Progressive Grocer - January 2011