As one of the most mature markets in the grocery world, yellow fats often struggles to match other sectors in terms of innovation. Not only that, but the very nature of butter/margarine/spreads is that there is only so much of it you can use. As increasing consumption is probably not an option, pricing strategies have played a big part in the shape of the market. Every Day Low Pricing has led to a decrease in the value of the market and, as a result the cheaper, tertiary brands are performing well. This is having such an impact on Anchor, one of the leading players for so long, that New Zealand Milk has invested £10m in a brand-building television advertising campaign and a revamped look for the entire Anchor range. Meanwhile, major rival Lurpak continues to lead the way with its spreadable variant which itself has benefited from television exposure. A few years ago, buttery type spreads such as I Can't Believe It's Not Butter and Utterly Butterly were the groundbreaking innovation, with all the taste of butter but in an easily spreadable format. While these brands have firmly established themselves in the category, perceived product differentiation among consumers ­ and ultimately brand loyalty ­ is minimal and price promotions among these products simply encourage switching. The fastest growing sector within yellow fats is now olive spreads. With the increased awareness and consequently usage of olive oil in cooking, olive spreads are quickly catching up with the buttery spreads in terms of sales. Olivio has been the most successful exponent thus far but own label versions are also selling well and a couple of new additions to the range look set to grow the sector further. Rival St Ivel has dived into olive waters with the launch of its Carapelli extra virgin olive spread ­ which uses extra virgin olive oil by the Carapelli brand ­ to capitalise on the popularity of the foodstuff. And Olivio, not resting on its laurels, has recently launched "Olivio butter" ­ a blended spread made with butter and olive oil which is packaged like a regular butter. As a result of this positioning, and also its relatively high pricepoint, it is likely to compete directly with existing butter ranges. While some of us are happy to concentrate on taste issues alone in our choice of spread, many are still considering the health implications of certain yellow fats. Last year's biggest launch was Benecol, with its claims of reducing cholesterol levels. Sales grew quickly and have stabilised at a healthy level, certainly enough to categorise it as a successful new product. If yellow fat consumption is not about to breed a nation of butterholics, yogurts and dairy desserts continue to keep the country's cows busy. Sales have increased by 6.8% in the last year, nearly £65m in actual sales, which means that the category is now worth £1.02bn. Müller maintains its stranglehold on the market with a combination of quality product and aggressive promotions. A staggering 70% of all Müller sales occur while the brand is on a consumer promotion of some description and it is this constant stream of deals and offers that keeps the punter happy. Consumers in this market are notoriously promiscuous, hunting out the latest bargains for their dessert requirements. One of the keys to Müller's success is the large and ever-changing range of products, particularly in the Müller Corners department. This keeps the fixture fresh and exciting, an important factor in what can be a static market. The fact that Müller pots are bigger and packaged differently from the vast majority of chilled desserts adds to their more luxurious image. Interestingly, Müller Corners' growth has adversely affected some of its competition but not others. For example, Ski has managed growth of 10% while sales of St Ivel Shape have fallen by 23.6%. Essentially a healthy sector anyway, the lower fat end of the market is showing high growth and again one of the main benefactors is Müller with Müllerlight. Positioned as an integral part of the Müller range, it is promoted in the same way and as a result enjoys the same success, or in the case of the latest year, even more so. Overall, the chilled desserts aimed at the adult consumer is growing faster than the children's sector. And the yogurt and probiotic drinks sector is harnessing adult consumers' health concerns with drinks such as Yakult and Actimel showing phenomenal growth over the past year. For the kids it is products featuring popular kids characters such as The Tweenies, Pokémon or Bob the Builder that have been driving innovation in the market. They keep the fixture fresh whereby, precisely because they only have a limited lifespan, they keep the kids interested with a permanently high novelty value. {{MARKETING }}

Topics