Many U.K. consumers are frying, baking and eating less bread today, which is melting volume sales of yellow fats and edible oils, according to new research from Mintel.
Some products remain untouched, however. Butter still rules. Coconut oil also continues to be in demand. Then there’s avocado oil, which can be the next big thing if retailers tout its healthy benefits and allot more shelf space. Still, the market’s overall growth depends greatly on tapping into such driving forces as regional appeal and new uses.
While avocado has become a widespread toast-topping phenomenon, it may also soon infiltrate the oil market. While avocado oil may be suffering from lack of awareness, there is clearly scope for retailers to shout about the health credentials more strongly and to support an increased presence on supermarket shelves.
Mintel’s Yellow Fats and Edible Oils UK 2017 report states that over three in five (62%) Brits who buy butter, spread, oil, and fat say they are frying less food at home now compared to a few years ago, while 43% say they are buying fewer bread products and 42% say they are baking less at home. This change in eating habits have had an impact on sales of butter, spreads, and oils, says Richard Caines, senior food and drink analyst at Mintel.
“Most buyers frying less food than a few years ago is a continuation of a long-term trend, including having fewer fried breakfasts,” Caines explains. “Meanwhile, people cutting back on bread means they are not using butter or spreads as much as they used to, negatively impacting on sales. Yellow fats also look to be suffering from an end to the home baking boom. As a result of this, encouraging new uses will be important in driving future growth in the yellow fats and edible oils market.”
The report notes that sales of yellow fats and edible oils have been in decline. Volume sales of spreads, such as margarine, are estimated to have fallen by 27% between 2012 and 2017, while sales of edible oils are down 10%. Butter bucked the downward trend in spreads and edible oils, however, increasing volume sales by 11%, benefiting from the desire for more natural and less processed products.
Butter remains household staple
It seems that it’s older consumers, in particular, who are refining their use of edible oils and yellow fats. Of those over the age of 55 who buy butter, spread, oil or fat, almost three in four (73%) say they are frying less food at home now compared to a few years ago, while half (49%) say they are baking less than a few years ago.
Meanwhile, it’s younger consumers who are slicing their bread consumption, with half (49%) of those aged 18-24 who have bought butter, spread, oil or fat in the last three months agreeing they are buying fewer bread products compared to a few years ago, according to the firm.
While Brits may be buying less yellow fats and edible oils, butter, spreads, and oils are still household staples. Over nine in 10 (92%) U.K. consumers have bought any butter or spread in the last three months, with 74% purchasing butter and 67% spread. Meanwhile, almost four in five (78%) have bought any edible oil, with olive (41%), vegetable or rapeseed (38%) and sunflower (33%) the most commonly bought oils, according to Mintel.
The price of butter has been rising in 2017 and the cost of butter or spreads is a key purchasing influencer for many. Of those who have bought butter and spread in the last three months, two in five (40%) say they look for a product for spreading on toast, sandwiches, etc. which has a low price, compared to a quarter who look for low saturated fat (26%) and low fat (24%), states Mintel.
Regional appeal can boost sales
There are factors, however, that could butter up sales of yellow fats and edible oils. Nearly three in 10 (28%) say they would pay more for products supporting British farmers, while just under a fifth say they would pay more for an organic product (19%) and the same proportion would pay more for a product that guaranteed higher animal welfare (19%). Furthermore, 44% say that the regional origin of a product, for instance Cornish butter, increases its appeal.
“Provenance in terms of coming from a particular region increases a product’s appeal and offers scope for adding a point of differentiation that goes beyond just promoting butter as British,” Caines says.
Supporting British farmers is clearly more emotive than just British provenance, as it is telling a story of farmers in particular regions and spelling out the brand or retailer’s support for them. In olive oils, regional origin could also be promoted more. Stressing regionality is one way to lift oils out of the commodity category, and to support premium pricing, he adds.
New trends on the horizon
Finally, while olive and sunflower oils may be the more traditional choice, coconut oil is showing signs of popularity. One in three (33%) Brits see coconut oil as ‘trendy’, compared to just 12% who say the same of olive oil, with 7% of Brits buying coconut oil/fat in the past three months. What’s more, 58% of those who buy coconut fat or oil say it is healthy. According to Mintel Global New Products Database (GNPD), one in eight (12%) butter, spread and oil products launched so far in the U.K. in 2017 contained coconut oil, up from 8% of launches in 2016.
However, looking to the future it seems coconut oil may have a rival. Indeed, while avocado has become a widespread toast-topping phenomenon, it may also soon infiltrate the oil market, with 24% of Brits saying avocado oil is ‘trendy’.
“The number of new product launches in oils and spreads featuring coconut has increased significantly due to coconut being an on-trend ingredient,” Caines says. “This is reflected by a third of people perceiving coconut oil to be a ‘trendy’ ingredient, the strongest association for this type of oil. While avocado oil may be suffering from lack of awareness, there is clearly scope for retailers to shout about the health credentials of avocado oil more strongly to support their increased presence on supermarket shelves, and their inclusion in spreads.”