'A breath of fresh air' is how Yeo Valley describes its brand, and indeed it proved to be just that.
Organic butter and spreads only account for just over 1% of the butter and spreads market but, in line with consumers' interest in products with natural credentials, sales were up 7.1% to nearly £11m in the past year [TNS], with innovation by Yeo Valley the catalyst for growth as a whole.
Yeo Valley leads the market, accounting for a 34% share of organic value sales [Nielsen].
The company relaunched its entire organic portfolio this year and backed it with a £3.6m marketing push.
But this year marked the first mainstream brand's entrance into the category when Arla threw an organic version of spreadable butter Lurpak into the mix in January.
Lurpak Organic Spreadable clocked up sales of £500,000 in its first 15 weeks, according to Nielsen [52w/e 19 April 2008].
There are high hopes that this will continue, though perhaps not to the extent the company originally predicted.
Initial targets were for £3-£5m when it launched, but senior brand manager Stuart Ibberson hopes that the product will generate sales of £2m to £3m in its first year.
Still, given that butter, spreads and margarines' share of the organic market is considerably lower than that of organic milk, Ibberson believes that the opportunity is now there for Lurpak to take ownership of the category.
So far, he claims, the launch has grown overall sales of organic butter and spreads without cannibalising existing products.
"Priced at about a 20% premium to standard Lurpak Spreadable and an 11% premium to Yeo Valley, the focus for the rest of this year will be to continue to trade people up to the organic butter and spreads sector," he says.
"As happened with our yoghurt lines, our progress is drawing other brands into the organic arena, which can only add interest for consumers to the sector as a whole," says marketing director Ben Cull.
On the back of this, Cull says he expects the organic sector will become an even more important part of the butter and spreads business in 2008.
Although Anchor has no immediate plans to enter the organic market, it is keeping a close eye on the market, says senior brand manager Lorraine Crowe.
"We feel it is important that we establish our free-range status before going down the organic route, and it is something we will consider in the future; but it won't happen this year," she adds.n
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