Despite predicted low declines in retail volume terms for 2021 compared to 2020 when the emergence of COVID-19 and the subsequent home seclusion trend resulted in a surge for perceived essential groceries, overall demand for butter and spreads is likely to remain much higher than pre-pandemic levels over the year. With high cases in circulation in various regions of Mexico heading into 2021, many consumers continued to spend longer periods of time at home in the first half of the year, and therefore the trend for home baking and cooking remained relevant, driving demand for butter and spreads.
The main factor likely to drive declining demand for butter and spreads through retail during 2021 is the partial recovery of the foodservice channel as restaurants, bars and hotels are allowed to operate once again and restrictions relax in areas with lower cases of the virus. While many Mexicans are likely to remain cautious about spending too long in public spaces with the virus in circulation, prolonged periods of home isolation are likely to lead to an increasing number of citizens wanting to return to eating out more frequently, particularly as the country’s vaccination programme continues to be rolled out, leading to greater confidence in terms of consumer sentiment.
The competitive landscape of butter and margarine is likely to remain fairly consolidated during 2021 amongst leading players Cremería Americana SA de CV, ACH Foods México S de RL de CV (which owns dominant cooking fats brand Inca), and Upfield México S de RL de CV; the latter two are predicted to gain value share from the leader due to a shift away from butter where it holds a convincing lead through its brands Gloria and La Abuelita, while holding a much smaller presence in margarine and spreads with its brand San Antonio in 2021, a category that is predicted to record the lowest retail volume decline during the year. Margarine and spreads continues to be led by Primavera from Upfield with the player investing in the healthier positioning of its margarine brand following the launch of two variants towards the end of the review period, one produced from olive oil, and the other from coconut and almond oil to capitalise on the rising interest in plant-based products in Mexico.
Demand for butter and spreads in retail terms is predicted to further decline in Mexico heading into the forecast period, as consumers start to spend longer outside of the home including a return to the workplace. This will reduce the amount of time that they can dedicate to home cooking, whilst health concerns regarding the increased consumption of fat-laden cakes for instance, as a result of comfort eating driven by the home seclusion trend, will come to the fore.
By way of contrast, the foodservice channel is expected to fully recover to pre-pandemic levels in terms of volume sales by 2022 due to a greater shift from retail towards foodservice due to strengthening consumer sentiment in the wake of the country’s ongoing vaccination rollout and a return to work, resulting in higher disposable incomes. A further return of international visitors, depending on the threat level of the virus in different regions and source countries’ rules regarding isolation upon their return, is also likely to support a stronger performance for butter and spreads through foodservice compared to retail over the forecast period, resulting in the latter remaining the stronger channel for this category, particularly for butter.
A trend towards healthier eating as a result of weight gain during the pandemic due to sedentary lifestyles and the home seclusion trend in addition to general obesity levels in the country might bring opportunities for innovation within butter and spreads. Consumers are becoming increasingly aware of the ingredients and production processes involved in this category, particularly cooking fats, and margarine and spreads, while butter has a “cleaner” image.
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Understand the latest market trends and future growth opportunities for the Butter and Spreads industry in Mexico 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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