Butter and Spreads in Portugal

2020 IMPACT

Demand for butter and spreads likely to increase in 2020 as more consumers expand their home-cooking habits under lockdown

The COVID-19 crisis is anticipated to drive sustained growth for butter and spreads in 2020 as lockdown restrictions confine people to their homes and consumers increase baking and cooking at home. Although stockpiling did not have a big effect at the beginning of the pandemic, throughout the lockdown period and beyond, Portuguese consumers are spending more time cooking at home which increases demand for butter, margarine and spreads as they are vital ingredients for cooking and baking.

Upfield expected to retain lead in 2020 despite continuing to lose value share

Upfield Portugal Unipessoal Lda is expected to retain its lead of butter and spreads in 2020 although it continues to lose value share, due to its dominance and reliance on the largest underperforming category of margarine and spreads. Despite this, the company continues to invest in a wide brand portfolio offering leading brands Planta and Becel, as well as Vaqueiro and Flora.

Small players and private label expected to increase shares in 2020

Competition is expected to continue intensifying within butter in 2020, as there is strong potential for growth moving forward. As a result, an increasing number of smaller brands are entering the category and recording strong current value growth.

RECOVERY AND OPPORTUNITIES

Over the forecast period, health and wellness trends are expected to dampen potential for retail volume growth for butter and spreads

Health and wellness trends will likely moderate the growth of butter and spreads over the forecast period, as consumers look for healthier alternatives. Consumers are paying increased attention to the sources of fat, opting for healthier options such as olive oil which is increasingly used for cooking ultimately cannibalising the consumption of cooking fats and margarine and spreads for that purpose, as butter is not often used for cooking in Portugal.

Butter is expected to post most dynamic performance over the forecast period due to healthier image

Demand for butter experienced modest growth in 2020 due to a change in home cooking habits because of lockdown, following a review period with relatively stagnant retail volume growth. As Portugal begins recovering from the pandemic, it is likely that the economic fallout of the pandemic will reduce disposable incomes, and consumers will continue their home-cooking habits in an attempt to cut costs.

National seal of origin may gain importance over the forecast period in butter and spreads

Over the forecast period, domestic producers are expected to continue dominating butter due to better knowledge of local consumer preferences. Butter is appreciated by some local consumers for its flavour, with a greater preference for salted butter.