Demand for natural fats is rising
THE debate over fats is larded with controversy. For years doctors argued that they should be expunged from diets entirely. Saturated fats, they reckoned, were especially harmful. As a result, consumers increasingly turned to margarine and demand for butter melted away. The vegetable-based spread remained dominant for decades. But two trends have since eaten away at its market share.
First, the crusade against fats is waning. Nowadays, doctors are much more sanguine about eating fat in general. Instead they have set their sights on “trans fats”, which are commonly found in margarine and thought to increase the “bad” type of cholesterol (which has low-density lipoproteins) while lowering the “good” sort (which has high-density ones). Second, consumers are placing greater emphasis on “natural foods”, including both butter and olive oil. Margarine consumption is slipping: today the average American consumes just 1.6kg (3.5 lbs) of the stuff each year, down from over 5kg per person in the early 1990s.
Changes in what consumers put on their toast have affected the corporate world. On April 6th Unilever, a consumer-goods conglomerate, announced that it will sell off its margarine and spreads business in the face of falling demand. While the decision may ultimately butter up investors, there is a sentimental cost: one of the original two firms that merged to form the Anglo-Dutch giant in 1929 was Margarine Unie.
Data from Euromonitor International, a research firm, illustrate why Unilever is keen to leave the spreads business behind. The market for butter is far from saturated: global sales are expected to rise by 9% over the next five years, whereas sales of margarine are projected to stay flat. If Euromonitor’s forecasts are correct, the spreads business may soon face a margarine call.
From The Economist