Mixed performance for spreads

February 22, 2011

Spreads are winners and losers in this post-recession period, during which shoppers continue to buy cautiously.

Spreads are winners and losers in this post-recession period, during which shoppers continue to buy cautiously.

On one hand, prices for butter - the king of spreads and a cooking ingredient in countless dishes - are at a seven-year high. This has prompted a 2.6% equivalized unit volume decline in U.S. food, drug and mass merchandiser stores (including Walmart) during the 52 weeks ended November 27, 2010, according to Nielsen. The data for prepackaged, UPC-coded products only showed a corresponding 5.0% dollar sales lift to $1.67 billion.

This is a turnabout for butter, which Mintel said in its recent Savory and Sweet spreads study had grown in volume but dipped in dollars between 2004 and 2009.

Meanwhile, margarine, used often as a butter substitute, fell even more in the latest 52 weeks, posting a 5.9% EUV decline and a 10.0% dollar sales drop to $1.51 billion, noted Nielsen.

If EUV is down for both butter and margarine, what are shoppers buying instead? Or have people simply vacated the category as a non-necessity in order to save money?

Part of the answer is evident in Nielsen data for a wide array of jams, jellies and spreads. The two biggest winners - meat sandwich spreads and hummus - are the beneficiaries of two concurrent consumer trends. The dollar sales and EUV growth of meat sandwich spreads represent a trade-down from meat in its original form, while the growth of hummus represents a widespread move to eat healthier.

Here are the details, according to Nielsen:

  • Meat sandwich spreads (a dry grocery segment of meat spreads that make a complete sandwich when put on bread, plus products such as chicken salad, tuna salad and ham salad) posted double-digit advances in each of the past two years. Dollar sales rose 38.2% to $22.9 million on a 25.4% EUV rise in the most recent 52-week period, following a year in which dollar sales were up 35.2% on a 24.0% EUV gain.
  • The far larger hummus segment rang up a 23.5% dollar sales advance to $336.0 million in the latest 52 weeks on a 27.6% EUV rise, following a year in which dollar sales grew 14.0% on a 10.9% EUV climb.

Peanut butter has also fared decently as an economical protein choice the past couple of years. According to Nielsen, dollar sales edged up 0.8% to $1.28 billion in the most recent 52 weeks on a 2.8% EUV increase. This followed a year in which dollar sales were up 3.2% - significant for a segment of this size - albeit on a 2.4% EUV decline.

Sweet products have turned in middling performance over the past two years, the Nielsen data show. For example: honey dollar sales rose 11.9% and 2.1% in the two latest 52-week periods to $314.9 million on 5.1% and 0.2% EUV gains; jams dollar sales rose 2.1% then slid 2.2% to $176.9 million on 2.2% and 0.8% EUV declines; jelly dollar sales were up 6.6% and 0.2% to $178.2 million on 0.9% and 2.5% EUV dips; marmalade dollar sales rose 4.3% and then fell 7.9% to $39.8 million on a 1.2% EUV rise and then a 10.2% EUV drop; preserves dollar sales were up 4.2% and then down 2.7% to $318.4 million on 1.9% and 1.6% EUV declines; and fruit spreads dollar sales rose 4.3% and 4.6% to $142.9 million on 1.3% and 2.0% EUV gains.