The favourable performance of Magnolia Inc, which dominates the category, was the key growth driver in 2019. Magnolia benefited from increasing its distribution reach, especially into the Visayas and Mindanao region, with the company’s prospects expected to remain favourable to the benefit of the whole category.
Margarine and spreads saw significantly stronger growth than butter in 2019 in both current value terms and retail volume terms. This was largely due to the much more affordable prices of margarine and spreads, with butter having an average unit price that is almost four times that of the former.
Butter and margarine and spreads are mainly used as a spread and as an ingredient for baking. It is not common, however, for households to use these products as a substitute for edible oils for use in cooking/frying.
Magnolia continued to dominate butter and spreads in 2019, with it recording double-digit growth in current value terms. Its success stems partly from its wide brand portfolio of butter and margarine and spreads, which allows it to serve different consumer groups.
San Miguel Corp, which is the GBO of Magnolia, started expanding its manufacturing facilities in the Philippines in 2018 as it looks to shift away from toll manufacturers in favour of having its own manufacturing facilities. It plans to increase its manufacturing capacity by 130,000 metric tonnes by 2020, with butter and margarine and spreads among its products that are set to benefit from this added production capacity.
The dominance of Magnolia within butter and spreads gives local companies an edge against their multinational counterparts. In margarine and spreads, all of the major brands are owned by domestic players as a result of competitive pricing, brand awareness via wide product portfolios and shelf space occupancy.
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Discover the latest market trends and uncover sources of future market growth for the Butter and Margarine industry in Philippines with research from Euromonitor's team of in-country analysts.
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