Butter up! Spices and pouch-packs could bolster Brazil's butter market, says Mintel

14-Jun-2018 - Last updated on 14-Jun-2018 at 13:20 GMT

Butter can have a bright future in Brazil but the category needs clever flavor and packaging innovation to tempt consumers who traditionally prefer margarine, says a Mintel analyst.

In 2016, margarine accounted for 85% of all yellow fat volumes in Brazil – preferred over butter for its affordability, according to Mintel. But, with Brazil creeping out of its deep recession and posting a GDP rise of 1% last year – the first since 2014 – butter could have its chance.

Data from Mintel's Global New Products Database (GNPD) showed that in 2017 there were 58% more butter products launched in Brazil, compared to 2016. However, Caroline Roux, global food and drink analyst at Mintel, said launches so far had been too plain to tempt consumers.

Writing in a recent blog post, Roux said: “Few products have looked to stand out by taking a more experimental approach to flavor, functionality or packaging, and this represents a potential growth area going forward as butter consumption becomes more ingrained in Brazil.”

“...Butter is still, however, overwhelmingly seen as a spread, which highlights opportunities for manufacturers to be more experimental around flavor, which can help consumers be more creative in the kitchen.”

There were “significant opportunities” with the right product innovation, she said, which would also be buoyed by Brazil's economic recovery and fewer concerns around cost.

Spices and pouches...

Speaking to FoodNavigator-LATAM, Roux said there was strong potential to grow the butter category in Brazil if manufacturers could encourage different usage occasions.

Currently, she said 76% of Brazilian consumers use margarine or butter as a spread and just 21% use the products to shallow fry food, favoring oil to cook with. But, if innovative flavors and packaging were introduced, she said there was scope to tempt consumers.

“Savory and/or spicy flavors are the most obvious routes to encourage cooking usage. Packaging innovation, and small packs in particular, alongside flavor could help convince consumers to use flavored butter more often,” Roux said.

Showing consumers that the butter product could help them in the kitchen, she said, would also“draw attention” because consumers valued convenient shortcuts when cooking at home.

Roux said butter manufacturers could take inspiration from other categories, like nut butters where American natural and organic brand Justin's had launched an innovative package concept.

“Justin's broke into the US market with single-serve pouches. The pack added portability and a new way to consume nut butters, increasing usage occasions for the category. And it allowed consumers to experiment with a relatively small investment in money and risk of wasted product.”

Domestic supply catch-up

However, opportunity to expand the butter category in Brazil also required adequate supply – an area Brazil struggled in.

“Outside of the economic climate, domestic butter shortages have been a significant constraint. As most milk is consumed whole in Brazil – 63% of Brazilians drink whole milk, compared to 23% who drink skimmed milk – reducing the supply of milk fat for other uses,” Roux said.

Whilst this had created space for manufacturers to import butter, she said it also elevated the product to a premium tier and prevented many consumers from buying the product.

“Two-thirds of Brazilians say they would buy more butter if it was cheaper, highlighting opportunities for local dairy producers.”