Sweet Spreads and Nut Butters - US

• How and why are U.S. health trends in obesity, diabetes, and food allergies affecting specific product groups and how can negatives be turned into positive marketing messages
• Why healthy positioning alone is not enough and how suppliers are innovating to make sticky products such as honey more user-friendly
• How J.M. Smucker has increased their dominance within the market again
• How the number of persons in a household may be as influential as presence of children in determining usage
• When and how sweet spreads are used and how that usage differs by specific type of product

Scope and Themes

What you need to know

Definition

Data sources

Sales data

Consumer survey data

Abbreviations and terms

Abbreviations

Terms

Executive Summary

Challenging market environment

Many specialty nut butters grow sales through FDM

Health concerns hinder, but gourmet helps sales of fruit spreads

Honey use grows and evolves

Smucker’s dominance grows while recall hurts ConAgra

Food stores grow share

Number of one-person households bad for market

Inflation pressures cause consumers to cut back on spending

High calorie foods including peanut butter are cheapest

Health concerns keeping many from the market

Innovating to make products more convenient and healthier

Usage of jams, jellies, and preserves among households

Household usage of peanut butter illustrates challenges

Consumer attitudes toward jellies, jams, and honey

Black respondents’ usage of creamy and seedless products high

Market Size and Forecast

Key points

Sales remain flat even as challenges are steep

Private label products grow prominence

Figure 1: Total U.S. sales and forecast of sweet spreads and nut butters, at current prices, 2003-13

Figure 2: Total U.S. sales and forecast of sweet spreads and nut butters, at inflation-adjusted prices, 2003-13

Wal-Mart sales

Competitive Context

Honey attempts to grow its presence outside the food industry

Acquisitions grow Smucker’s

Some schools banning peanuts and peanut butter as food allergies grow

Segment Performance

Key points

Economy trumps desire for healthy food

Figure 3: U.S. FDMx sales and forecast of sweet spreads and nut butters, at current prices, by segment, 2003-13

Peanut butter and honey grow faster than sweet spreads

Figure 4: U.S. FDMx sales of sweet spreads and nut butters, by segment, 2006 and 2008

Segment Performance—Peanut Butter and Other Nut Butters

Key points

Recession diet growing sales of staples such as peanut butter but inflation growing faster

Specialty nut butters grow

Chunky peanut butter sales a drag on the segment

Figure 5: U.S. FDMx sales and forecast of peanut and other nut butters, 2003-13

Segment Performance—Jam, Jelly, Preserves, and Fruit Butter

Key points

Sales slow on health concern and ties to breakfast

Imported and gourmet brands continue to grow

Figure 6: U.S. FDMx sales and forecast of jam, jelly, preserves, and fruit butter, 2003-13

Segment Performance—Honey

Key points

Appellations on honey

Private label goes upscale

Figure 7: U.S. FDMx sales and forecast of honey, 2003-13

Retail Channels

Key points

Food stores grow share

Drug stores show growth but presence is still small

Figure 8: U.S. sales of sweet spreads and nut butters, by retail channel, 2006 and 2008

Retail Channels—Mass Merchandisers and Other Channels

Key points

Figure 9: U.S. sales of sweet spreads and nut butters through mass merchandisers and other channels, 2003-08

Retail Channels—Food Stores

Key points

Food stores scaling down in size and up in quality

Aggressive promotion and tiered offerings of PL in food stores

Consolidation of food stores helps against big-box competitors

Figure 10: U.S. sales of sweet spreads and nut butters through food stores, 2003-08

Retail Channels—Drug Stores

Key points

A small player in a large market

Graying population and reliance on prescriptions help convenience sales

Figure 11: U.S. sales of sweet spreads and nut butters through drug stores, 2003-08

Natural Channel/SPINS

Figure 12: Natural product supermarket retail sales of sweet spreads, at current prices, 2006-08

Natural channel sales by segment

Figure 13: Natural product supermarket retail sales of sweet spreads, by segment, 2006 and 2008

Natural supermarket channel sales, peanut and other nut butters

Figure 14: Natural product supermarket retail sales of peanut and other nut butters, at current prices, 2006-08

Natural supermarket channel sales, jams, jellies, preserves and fruit butters

Figure 15: Natural product supermarket retail sales of jams, jellies, preserves and fruit butters, at current prices, 2006-08

Natural supermarket channel sales, honey

Figure 16: Natural product supermarket retail sales of honey, at current prices, 2006-08

Brand tables

Sweet spreads

Figure 17: Manufacturer brand natural supermarket sales of sweet spreads, 2006 and 2008

Peanut and other nut butters

Figure 18: Manufacturer brand natural supermarket sales of peanut and other nut butters, 2006 and 2008

Jams, jellies, preserves and fruit butters

Figure 19: Manufacturer brand natural supermarket sales ofjams, jellies, preserves, and fruit butters, 2006 and 2008

Natural channel sales of sweet spreads by organic

Figure 20: Natural product supermarket retail sales of sweet spreads, by organic, 2006 and 2008

Peanut and other nut butters by organic as total share of segment

Figure 21: Natural product supermarket retail sales of peanut and other nut butters, by organic, 2006 and 2008

Jams, jellies, preserves and fruit butters by organic as total share of segment

Figure 22: Natural product supermarket retail sales of peanut and other nut butters, by organic, 2006 and 2008

Honey by organic as total share of segment

Figure 23: Natural product supermarket retail sales of peanut and other nut butters, by organic, 2006 and 2008

Market Drivers

One-person households bad for sales while more is better

Figure 24: U.S. population and usage of peanut butter and jams/jellies/preserves, by size of hosuehold, 2006

Figure 25: Households, by size, 1996-2006

Economics drive consumers to cut back on spending

Figure 26: Changes in consumer price indices, 2003-08

High-calorie foods including peanut butter are cheapest

Health concerns

Food allergies increasing in children

Obesity and diabetes

Figure 27: Prevalence of diagnosed diabetes per 100 people per population, by age, United States, 1995-2005

Leading Companies

Key points

J.M. Smucker’s strategy of acquisitions

Peter Pan recall hurts ConAgra Foods

Figure 28: Sales of leading sweet spreads and nut butters companies, 2007 and 2008

Brand Share—Peanut and Other Nut Butters

Key points

Impact of ConAgra peanut butter recall benefits other suppliers

Jif dominates segment

Smart Balance growth stays strong

Specialty nut butters show strong growth

Figure 29: FDMx brand sales of peanut and other nut butters in the U.S., 2007 and 2008

Brand Share—Jam, Jelly, Preserves, and Fruit Butter

Key points

Smucker’s continues to grow market share

Premium imported jams make big gains

Figure 30: FDMx brand sales of jam, jelly, preserves, and fruit butter in the U.S., 2007 and 2008

Brand Share—Honey

Key points

Private label

Fragmented supply system

Figure 31: FDMx brand sales of honey in the U.S., 2007 and 2008

Brand Qualities

Rebuilding Peter Pan’s image

Figure 32: Trended usage of peanut butter brands, January 2003-March 2008

Innovation and Innovators

Making honey more user-friendly

Superfruits growing in fruit spreads

Omega-3 fatty acids added or emphasized

Advertising and Promotion

Overview

J.M. Smucker’s promotions

Jif peanut butter

Figure 33: Jif peanut butter, 2008

Figure 34: Jif peanut butter, 2008

Smucker’s jams

Figure 35: Smucker’s jams, 2008

Figure 36: Smucker’s jams, 2008

Honey industry promotional activity

Sue Bee Honey

Usage

Usage of jams, jellies, and preserves among households

Figure 37: Household usage of jams, jellies, and preserves, by race/Hispanic origin, household income and household size, February 2007-March 2008

Usage of jams, jellies, and preserves by type

Figure 38: Trended usage ofjams, jellies, and preserves, by type, January 2002-March 2008

Flavors of jams, jellies, and preserves used by household

Figure 39: Flavors of jams, jellies, and preserves used by households, by household income, February 2007-March 2008

Usage of specific sweet spreads

Figure 40: Incidence of personal and household consumption of honey, jam, jelly, marmalade, and fruit butter, July 2008

Meals with which sweet spreads are used

Figure 41: With which meal is honey, jam, jelly, marmalade, and fruit butter used, July 2008

Usage of honey by type

Figure 42: Specific types of honey used, by age, July 2008

Household usage of peanut butter

Figure 43: Household usage of peanut butter, by race/Hispanic origin, region, household size and marital status, February 2007-March 2008

Types of peanut butter used by households

Figure 44: Types of peanut butter used by households, by region, February 2007-March 2008

Attitudes and Motivations

Consumer attitudes toward jellies, jams, and honey

Figure 45: Consumer attitudes toward jellies, jams, and honey, strongly agree summary, by age, July 2008

Figure 46: Consumer attitudes toward jellies, jams, and honey, strongly agree summary, by region of residence, July 2008

Teens’ and Kids’ Usage

Figure 47: Incidence and frequency of eating jams, jellies, and preserves and peanut butter by teens and kids, January-November 2007

Figure 48: Teens’ incidence of eating jams, jellies, and preserves and peanut butter, by gender and age, January-November 2007

Race and Ethnicity

Flavor preferences by race/Hispanic origin

Figure 49: Usage of specific flavors of jam and jelly, by race/Hispanic origin, July 2008

Interest in non-traditional sweet spread flavors

Figure 50: Interest in non-traditional flavors of jam, jelly, marmalade, and/or fruit butter, by race/Hispanic origin, July 2008

Figure 51: Incidence of personal consumption of honey, jam, jelly, marmalade, and fruit butter, by race/Hispanic origin, July 2008

Figure 52: Types of peanut butter used by households, by race/Hispanic origin, February 2007-March 2008

Appendix: Other Useful Consumer Tables

Amount of jams, jellies, and preserves used in last 30 days

Figure 72: Number of jars of jams, jellies, and preserves used by the household in last 30 days, February 2007-March 2008

Flavors of jams, jellies, and preserves used

Figure 73: Flavors of jams, jellies, and preserves used by households, by race/Hispanic origin, February 2007-March 2008

Seeds or seedless

Figure 74: Incidence of purchase of seedless jams or jellies, by race/Hispanic origin, July 2008

Incidence of personal consumption of honey, jam, jelly, marmalade, and fruit butter

Figure 75: Incidence of personal consumption of honey, jam, jelly, marmalade, and fruit butter, by age, July 2008

Popularity of brands

Figure 76: Brands of jams, jellies, and preserves used by households, by household income, February 2007-March 2008

Types of honey used

Figure 77: Specific types of honey used, by household income, July 2008

Interest in non-typical flavors of jam, jelly, marmalade, and/fruit butter

Figure 78: Consumer attitudes toward jellies, jams, and honey, strongly agree summary, by race/Hispanic origin, July 2008

Kids’ and teens’ brand preferences

Figure 79: Brands of jam/jelly/preserves and peanut butter “liked best” by kids, January-November 2007

Figure 80: Brands of jam/jelly/preserves and peanut butter eaten by teens, January-November 2007

Brand preferences by race/Hispanic origin

Figure 81: Brands of jams, jellies, and preserves used by households, by race/Hispanic origin, February 2007-March 2008

Figure 82: Brands of peanut butter used in households, by race/Hispanic origin, February 2007-March 2008

Appendix: Trade Associations