Volume sales of butter and spiked in 2020, as a result of consumers secluding themselves at home in response to government quarantine measures. Sales of these products into foodservice collapsed as the channel was shut down, and consumers prepared more home-made meals.
Argentina’s burgeoning economic crisis is impacting negatively on value sales, as consumers are replacing butter with margarine and spreads, the cheaper alternative. As a result, butter, the largest part of these products in both value and volume terms in 2021, is set to see the sharpest fall in volume sales over the year.
In March 2020, the government launched a programme called “Precios Maximos de Referencia” (Maximum Reference Prices) that covered a basket of products deemed essential. This basket includes butter, although not margarine and spreads or cooking fats.
The competitive environment in Argentinian butter and spreads is set to see upheaval over the forecast period. In part, this is a result of soaring consumer price sensitivity, with many people looking to trade down to the cheapest products and brands they can find as the economic recovery fails to materialise.
Butter and spreads will continue to suffer from a general lack of innovation that will put the brakes on sales development. The country’s economic turbulence and financial uncertainty facing manufacturers means there is no incentive to invest in product development or marketing, and as a result the category will continue to be categorised by a very limited range of products.
Private label expanded strongly in 2020 and 2021, and this trend is set to continue over the forecast period. The reasons for the success of these products is simple – private label is cheaper and an excellent alternative when the brands included in the Precios Cuidados programme are not available on shelves.
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Understand the latest market trends and future growth opportunities for the Butter and Spreads industry in Argentina with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Butter and Spreads research and analysis database.
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