Edible Fats and Oils - US - February 2008

SUMMARY

Abstract

This report focuses on five major segments within the edible fats and oils market: mayonnaise; cooking and salad oil; olive oil; pan spray; and shortening. Besides presenting sales data on a segment-by-segment basis, the report considers a range of topics, including the following:

• The size of the market, and its potential for growth. How can a category that is built on "flavor neutral background products" stand out?
• What manufacturers and retailers can do to jump-start some segments, and clarify others. When is variety good, and when are there too many choices?
• The role of private label in an industry that is primarily commodity based. Is private label a "default" for lower priced products, or is it a secure, familiar name?
• The array of competing categories, and how they impact sales of fats and oils. How can fats and oils compete against everything from cooking tools to fat substitutes?
• Key brands, and the challenges they face. How do manufacturers compete against each other, and against private label? Do consumers see a difference?
• The impact of ethanol on the prices of vegetable oils. With corn and soy oil prices on the rise, what alternatives are left?
• Consumers

  TABLE OF CONTENTS

  Table of Contents

  • Scope and Themes
  • What you need to know
  • Definition
  • Data sources
  • Sales data
  • Consumer survey data
  • Abbreviations and terms
  • Abbreviations
  • Terms
  • Executive Summary
  • The $5.9 billion market will grow slowly through 2012
  • Opportunities abound in some segments
  • Competition from some unusual sources
  • Segment performance varies: olive oil is fastest growing
  • Supermarkets account for almost half of sales
  • Prices of edible fats and oils rise as farmers move to ethanol
  • Dieting usually means cutting back on fat
  • Unilever and Kraft brands lead the market, but private label is bigger
  • Competition on a number of levels
  • Most new, innovative products are from smaller players
  • Advertising and promotions focus on two themes
  • Mayonnaise and olive oil are found in most households
  • Brand loyalty in salad/cooking oil is not strong
  • Focus on olive oil
  • Market Size and Forecast
  • Key points
  • Olive oil is the only shining light in a slowing market
  • ...but it is reaching a temporary saturation point
  • Strong interest in private label holds down sales gains
    • Figure 1: Total U.S. sales and forecast of edible fats and oils at current prices, 2002-12
    • Figure 2: Total U.S. sales and forecast of edible fats and oils at constant 2007 prices, 2002-12
  • Wal-Mart sales
  • Competitive Context
  • Unless cooking habits undergo a radical change, the market will continue to rise very slowly
  • Indirect competition... from a range of products
  • Segment Performance -- Overview
  • Key points
  • Olive oil will continue to grow, mayonnaise sales will slow
  • Two reasons for poor showing: commodity status of major segments and the move to private label
    • Figure 3: U.S. sales and forecast of fats and oils (top five segments) at current prices, by segment, 2002-12
    • Figure 4: U.S. sales of fats and oils, by segment, 2005 and 2007
  • Segment Performance -- Mayonnaise
  • Key points
  • Mayonnaise sales will continue to decline slowly
  • Taste is a significant factor, and brands have strong taste associations
    • Figure 5: U.S. sales and forecast of mayonnaise, 2002-12
  • Segment Performance -- Cooking and Salad Oil
  • Key points
  • Small gains over time, but no significant jumps
    • Figure 6: U.S. sales and forecast of cooking and salad oil, 2002-12
  • Segment Performance -- Olive Oil
  • Key points
  • Private label offers price break without compromising quality
  • Interest in Mediterranean diet drives olive oil sales
    • Figure 7: U.S. sales and forecast of olive oil, 2002-12
  • Segment Performance -- Microwave Browning/Pan Spray
  • Key points
  • A category dominated by one brand and private label
  • The category also has limited applications
    • Figure 8: U.S. sales and forecast of microwave browning/pan spray, 2002-12
  • Segment Performance -- Shortening
  • Key point
  • A one-brand segment, in decline
    • Figure 9: U.S. sales and forecast of shortening, 2002-12
  • Retail Channels -- Overview
  • Key points
  • Market is split between supermarkets and "everything else"
    • Figure 10: U.S. sales of edible fats and oils, by retail channel, 2005 and 2007
  • Retail Channels -- Other
  • Key points
  • "Plain" and "fancy" products send consumers to a wide array of channels
  • Apportioning sales within the channel
    • Figure 11: U.S. sales of edible fats and oils at other channels, 2002-07
  • Retail Channels -- Supermarkets
  • Key points
  • Supermarket sales slip in light of competition
  • Supermarkets offer top brands, pitted against their own store brands
    • Figure 12: U.S. sales of edible fats and oils at supermarkets, 2002-07
  • Market Drivers
  • Key points
  • Ethanol production raises cost of vegetable oils
    • Figure 13: U.S. fuel ethanol production, 2002-06
  • Dietary considerations: obesity concerns may slow consumption rates
    • Figure 14: Percentage of population who are overweight or obese, by age, 1971-2004
  • Growing interest in omega-3 could boost floundering mayonnaise segment
    • Figure 15: Incidence of specifically purchasing products with omega-3, December 2007
    • Figure 16: Measure of frequency of purchase ofOmega-3 products, December 2007
  • Leading Companies
  • Key points
  • Private label success underscores commodity market status
  • Unilever competes in two segments, Kraft in one
  • Unilever's ability to leverage top brand names across segments
    • Figure 17: Sales of leading edible fats and oils companies, 2006 and 2007
  • Brand Share -- Mayonnaise
  • Key points
  • Innovation, but only to an extent
  • A one-dimensional product
  • No notable gains in more healthful line extensions
    • Figure 18: FDM brand sales of mayonnaise in the U.S., 2006 and 2007
  • Brand Share -- Cooking and Salad Oil
  • Key points
  • Cooking and salad oils' commodity status
  • Is there a way to stand out in the market?
  • "Healthy oils" have not made major headway
    • Figure 19: FDM brand sales of cooking and salad oil in the U.S., 2006 and 2007
  • Brand Share -- Olive Oil
  • Key points
  • Store brand olive oil holds its own
  • Price is a factor
  • Unilever's strong support for Bertolli
    • Figure 20: FDM brand sales of olive oil in the U.S., 2006 and 2007
  • Brand Share -- Microwave Browning/Pan Spray
  • Key points
  • ConAgra's Pam has little competition
  • Pam is considerably more expensive
  • Line extensions do little to change product share
    • Figure 21: FDM brand sales of microwave browning/pan spray in the U.S., 2006 and 2007
  • Brand Share -- Shortening
  • Key points
  • Crisco holds a two-thirds share of the market
  • Scratch baking declines, deep frying done more often with oil
    • Figure 22: FDM brand sales of shortening in the U.S., 2006 and 2007
  • Brand Qualities
  • Competition and innovation
  • Flavor
  • Health
  • Packaging
  • Innovation and Innovators
  • Innovations in edible oils
  • Flavor trends -- oils
  • Innovations in mayonnaise
    • Figure 23: Edible oils and mayonnaise new product introductions, U.S., 2002-07
    • Figure 24: Percent change in edible oils and mayonnaise new product introductions, U.S., 2002-07
  • Advertising and Promotion
  • Overview
  • Promoting product packaging
    • Figure 25: Television ad, Crisco oil, 2007
    • Figure 26: Television ad, Kraft Real Mayonnaise, 2007
    • Figure 27: Television ad, Hellmann's mayonnaise, 2007
  • Promoting the product itself
    • Figure 28: Television ad, Kraft Miracle Whip, 2007
    • Figure 29: Television ad, Hellmann's real mayonnaise, 2007
    • Figure 30: Television ad, Botticelli olive oil, 2007
    • Figure 31: Television ad, Pam vegetable oil spray, 2007
  • Usage of Edible Fats and Oils
  • Key points
  • Household usage
    • Figure 32: Usage of edible fats and oils, by age, December 2007
  • Trended usage of edible fats and oils
    • Figure 33: Trended household usage of edible fats and oils, 2003 and 2007
    • Figure 34: Purposes for salad or cooking oil use, 2003 and 2007
  • Types of oil used
    • Figure 35: Usage of salad or cooking oil, by type of oil, by educational attainment, May 2006-June 2007
  • Frequency of using oil for cooking
    • Figure 36: Frequency of cooking with corn, vegetable, or canola oil, by age, December 2007
    • Figure 37: Frequency of cooking with corn, vegetable, or canola oil, by race/Hispanic origin, December 2007
  • Focus on olive oil usage
    • Figure 38: Frequency of cooking with olive oil, by age, December 2007
  • Brand Usage
  • Key points
  • Popularity of brands
  • Brands of oil used
    • Figure 39: Use of salad or cooking oil brands, by race/Hispanic origin, May 2006-June 2007
  • Brands of mayonnaise used
    • Figure 40: Use of mayonnaise/mayonnaise-type salad dressing brands, by race/Hispanic origin, May 2006-June 2007
  • Considerations surrounding brand choice
    • Figure 41: Factors taken into account when purchasing edible oils, by race/Hispanic origin, December 2007
  • Attitudes and Opinions about Olive Oil
  • Key points
  • Buying behavior and preferences
    • Figure 42: Buying behavior and preferences regarding olive oil, by age, December 2007
    • Figure 43: Opinions concerning olive oil, by household income, December 2007
  • Appendix: Other Useful Consumer Tables
  • Usage of edible fats and oils
    • Figure 53: Usage of edible fats and oils, by household income, December 2007
    • Figure 54: Usage of edible fats and oils, by race/Hispanic origin, December 2007
  • Usage frequency
    • Figure 55: Frequency of cooking with corn, vegetable, or canola oil, by household income, December 2007
    • Figure 56: Frequency of cooking with olive oil, by household income, December 2007
    • Figure 57: Volume of salad or cooking oil used in last 90 days, by race/Hispanic origin, May 2006-June 2007
    • Figure 58: Volume of mayonnaise or mayo-type salad dressing used in last 90 days, by race/Hispanic origin, May 2006-June 2007
    • Figure 59: Use of cooking spray brands, by race/Hispanic origin, May 2006-June 2007
  • Factors taken into account when purchasing oils
    • Figure 60: Factors taken into account when purchasing edible oils, by age, December 2007
    • Figure 61: Factors taken into account when purchasing edible oils, by household income, December 2007
  • Attitudes and opinions about olive oil
    • Figure 62: Opinions concerning olive oil, by race/Hispanic origin, December 2007
  • Appendix: Trade Associations