Food Bites: Butter

BRAND ACTIVITY

Oct 18th 2011, 12:18

Butter is made by churning cream or milk, which is either fresh or fermented. Butter is mostly used as a spread or condiment, though it is often used in the bakery and confectionery market. It consists of water, milk and butterfat.

Butter static after volatile history

• The butter category did not perform particularly well during 2010, with a fairly static market state (0.5%) recorded for the period.

• It is hypothesised that a number of factors may have hampered further potential growth for butter during 2010. Firstly, given the lucrative nature of the cream category, raw material may have been channelled preferentially into cream production at the expense of butter. This meant that less butter was produced in South Africa during the base year.

• Secondly, international butter supply issues translated into reduced imported volumes entering the country’s borders. While local suppliers attempted to fill the gap created by this, this was not fully met.

• Thirdly, the butter category is extremely price sensitive. Possibly due to the reduced supply of both local and international butter volumes, the butter category recorded a substantial price increase (18.6%) on the local market. As margarine is a direct competitor to butter, any significant price increases for the latter result in a relatively easy transition to margarine, with a decline in volumes seen as a result.

• Overall, it is hypothesised that these factors collectively hampered further category growth in 2010. However, it is believed that, with the increase in imported butter volumes and with better category pricing, the category should see good growth in the short term. An increase of 6.7% is anticipated for 2011.

Read more about the performance of the butter category in an Annual Market Quantification (September 11) presented by BMI.Click here for more information on BMI Research