Butter feels the sales boom

Butter is back. The negative health beliefs about this simple and natural dairy product are being swept away by science and butter has become a growth opportunity for Europe’s dairies – not only at home in Europe, but in the US and Asia.

“Saturated fat was once considered dietary public health enemy number one,” Dr. David Ludwig, professor of nutrition at Harvard School of Public Health explained in an interview in Time magazine about the re-think about dairy fats that has been taking place. “For the last few years there’s been research and commentary suggesting that this focus is misguided.”

An example of the evidence that’s firmly underscoring that while butter may not be healthy, it’s not a bad food – and may be better than a sugar — is a recently published study in which researchers analysed nine papers that included more than 600,000 people. They looked at people’s butter consumption and the risk for chronic disease and found no link to heart disease. In fact, consuming butter might even be protective against type 2 diabetes.

To be clear, the new study doesn’t say butter is a health food, rather that “it doesn’t seem to be hugely harmful or beneficial,” according to lead researcher Dr. Dariush Mozaffarian, dean of the Friedman School of Nutrition Science and Policy at Tufts University in Boston.

Release the negative

Europe’s public health officials are still struggling to let go of a negative view about butter that never had any basis in science, and Europeans over 50 may be reluctant to give up the “low-fat-is-best beliefs” that they grew up with, but around the world people are rediscovering the naturalness, pleasure and usefulness of butter.

In the US, butter sales have reversed their many years of decline and have been growing every year, increasing by 4% to $2.82 billion (€2.5bn) in the 52 weeks to July 10 (according to SymphonyIRI). Margarines and table spreads – once marketed as a healthier alternative to butter – meanwhile continued their decline, with sales falling by 7%.

The Kerrygold brand, marketed by Ornua, (formerly the Irish Dairy Board) was the biggest winner from the trend, with its US sales up by 49% to more than $84 million (€74.4m).

Another European company doing well is Finlandia, which has sold cheese in the US since the 1950s, but butter only since 2014. Finlandia spied an opportunity with the growth of premium butters in the US, whose sales have been growing by about 20% year on year. Finlandia attributes the butter’s success to the fact that it is premium, comes from grass-fed cows and has a creamier texture.

On the other side of the world, China’s butter imports grew 40% in 2015. And while China’s per capita consumption is a tiny fraction of that of the US, that is in fact not an obstacle but an opportunity, particularly as wealthier urban Chinese are increasingly embracing butter as a prestigious, upscale cooking ingredient, just as they are also embracing cheese.

Smarter butter companies understand this and have been investing in educating the consumer, which is one reason why French butter brands enjoyed 48% growth in 2015 in China, while butter from Belgium grew 57% and from the Netherlands over 100%.

One reason that butter is on the up is because of its simple ingredient list. It’s one of nature’s naturally clean label foods. Many millennials, who are the major force behind the rising American preference for simple ingredient lists, are astonished to learn that butter is made from just cream and salt, while margarine – which their parents had grown up regarding as healthier – seems like it’s made from a chemistry set. The consumer quest for clean label is one reason why Finlandia, to take one example, communicates strongly about how its butter is made with, “only the purest natural ingredients” and made, “with pure fresh milk from Finnish family-owned farms.”

Versatile

Home gourmets from San Francisco to Shanghai are tapping into butter’s versatility in cooking and baking and butter makers are developing all types of product ranges designed to aid the home cook, from small stick-packs to sprays and flavours, such as:

  • Sticks and half-sticks made with olive oil and sea salt.
  • Soft butter blends with olive oil, honey, garlic and herbs, and cinnamon and sugar.
  • Culinary-inspired butters in garlic herb, maple syrup, pumpkin spice, smoked and many other flavours, wrapped in paper.

Some foodservice groups are also switching to butter. McDonald’s in the US, for instance, has substituted butter for liquid margarine across the board; when it started the move with Egg McMuffins a year ago, sales of the breakfast sandwich jumped by double digits. This resulted in an increase of 12 tons in the company’s butter purchases in Year 1.

The biggest successes in food and health over the last 20 years have come from products marketed for their “naturally healthy” credentials. And often, as in the case of butter, the news that a natural and simple product will do you no harm is as powerful to consumers as a positive health message.

Take that “free-from harm message” and use creative new product development to connect it to a wide variety of great, and unusual, tastes, provided in convenient packages and backed by communications about how to use butter creatively in baking and cooking. Widen your horizons from Europe to the markets of the US and Asia which are embracing butter and you have the start of a profitable growth business.

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