Margarine and spreads saw dramatic decreases in retail volume sales towards the end of the review period, plummeting by 23% in 2015, 26% in 2016 and 16% in 2017. This was due to the fast-growing health trend, which encouraged consumers to choose less processed, more natural food. Although margarine is a popular ingredient in baking, it is being rapidly replaced by alternatives like oil and butter, as it is considered extremely unhealthy. This is also reflected in the increase in margarine-free recipes. In addition, unit prices dropped because of the entry of a new competitor, Shimrit (Paca Industries), which is associated with quality baking products. Shimrit’s hydrogenated fat-free margarine gained popularity immediately in the market. Therefore, after moderate increases in the early review period, unit prices decreases from 2014/2015 undermined value growth.
Tnuva Food Industries continued to lead butter and margarine in 2017 with a 31% share of retail value sales. The company offers butter under Tnuva Butter, although the brand’s retail value share in butter dropped due to increasing competition. However, the company’s overall retail value share increased due to the sharp drop in margarine sales, which saw butter account for a larger share.
Retail volume and value sales (constant 2017 prices) of butter and margarine are expected to stagnate over the forecast period. While butter is predicted to see positive growth, margarine and spreads is set to witness further declines, albeit at a decelerating rate. With the fast decline in retail sales of margarine and spreads, companies will have to introduce healthier options to provide alternatives to products that consumers try to avoid, such as Shimrit’s hydrogenated fat-free margarine.
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