Butter and spreads is set to significantly benefit from the surge in new COVID-19 infections impacting Taiwan during 2021, due to the home seclusion trend which has seen local consumers spend more time in the kitchen preparing meals from scratch and baking due to home schooling and remote working policies. Social distancing measures and general concern over exposure to the virus had already led to many Taiwanese switching from dining out in foodservice outlets to home cooking even prior to the increase in the alert level in May 2021.
With Taiwan moving to alert level 3 in May 2021 due to a surge in virus cases, various restrictions including a ban on dine-in options for horeca outlets are set to impact the dominant channel of foodservice over the year, with predicted double-digit volume declines for both butter, and margarine and spreads. This trend is ultimately leading to a notable switch towards retail demand for these products as a result of the home seclusion trend.
Butter remains a fairly consolidated competitive landscape in Taiwan, led by Fonterra Brands (New Young) Pte Ltd, which benefits from its strength in the larger category of butter with its Anchor line (Anchor New Zealand Pure Creamery Butter and Anchor New Zealand Low Salt Butter), in addition to Allowrie, which holds much lower share and continues to experience declining sales. However, Anchor is synonymous with butter, enjoying widespread awareness among Taiwanese consumers.
Following a surge in demand due to the home seclusion trend during 2021, retail volume sales of butter and spreads are predicted to decline in 2022 before returning to greater levels of normalisation over the forecast period. A likely return to foodservice due to pent-up demand is set to be another factor, with this channel predicted to record double-digit growth in terms of demand for both butter, and margarine and spreads, although a more tentative recovery could be seen towards the end of 2021 with Taiwan starting to relax its restrictions at the end of July.
Flavoured margarine is gaining in popularity amongst young female consumers. Due to the popular trend of eating premium Japanese “raw toast” towards the end of the review period in Taiwan following the opening of bakeries which offer this product including SAKImoto Bakery, many young female consumers are beginning to eat white toast at home for breakfast or dessert accompanied by good-quality butter or margarine for spreading.
Taiwanese local butter is likely to continue to gain increasing attention over the forecast period. Since local raw milk costs are relatively high and the majority of raw milk production used to be controlled by dominant domestic players, most butter tends to be imported rather than locally produced.
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This report originates from Passport, our Butter and Spreads research and analysis database.
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