Yellow fats can still melt into market, Mintel

In its recently issued report on yellow fats, the market analyst underscored the potential these fats have to capitalize on market segments that tap into consumers' desire for indulgence.

The tendency has been for products across all food categories to move increasingly towards marketing along healthful lines - emphasizing changes such as a lower trans fat or salt contents.

According to Mintel, the value of the yellow fats market has been growing steadily at around 2.4 percent annually, since 2002, but volume growth is now static.

The entire yellow fats market for the UK was valued at £407m (€586.6m) in 2006, up from £363m (€523.2m) in 2004.

In the UK, there is on the one hand the driver of taste and natural products - under which butter scores strong points - but on the other hand lies the influence of the Food Standards Agency (FSA) as it aims to get consumers to reduce their saturated fat intake.

However, Mintel indicates consumers are willing to pay more for tastier and more natural products, meaning they are trading up for premium butter and health spreads.

While spreads and margarine account for the greatest portion of the yellow fats market, it is butter and increased sales of spreadable butter that are fastest encroaching on sales in the segment.

Mintel has suggested manufacturers of these fats launch new products leveraging their strengths for markets such as those for morning goods, from-scratch cooking goods, foods geared at men, and goods aimed at children's health.

The analyst said as the number of people eating breakfast at home declines, sales of morning goods like croissants, crumpets, bagels, pancakes and scones are on the rise.

It said this specifically opens channels for yellow fat ingredient manufacturers to enter.

"As morning goods are chosen for their taste and convenience rather than their health properties, manufacturers could develop indulgent products specifically for use on these foods," wrote the report's authors.

The analyst also pushed forth the concept of flavored spreads or butters.

"Manufacturers should launch butters and spreads for specific meal recipes such as sun dried tomato and basil butter for use in pasta, or chilli and lime butter for use in stir-fries, or butter with curry powder for use in making curries," said the researchers.

According to Mintel's consumer research, men - particularly between the ages of 25 and 34 - are the main purchasers of buttery spreads.

However, the analyst reveals there are currently no spreads targeting men specifically, thereby revealing another market opportunity for manufacturers.

"Manufacturers would benefit from promoting these products to men through adverts that exploit their use in bacon butties or fry ups and through cross-promotion with meat products."

Mintel also suggests yellow fats producers target parents' attraction to value-added products for their children.

The analyst cites how other dairy markets, like those for cheese and yogurt, have introduced lines of fortified products for children and recommends yellow fats companies do the same thing.

"Manufacturers could launch healthy spreads containing omega-3, omega-6 fatty acids and calcium to help children develop healthy," state the authors.

The market analyst also provides suggestions on new serving and packaging possibilities for yellow spreads.

This includes concepts such as products shaped like cartoon characters for children, single-use packages containing a spread and a jam, or single-serve butter ingredient packages for cooking applications.