PRODUCERS of Margarine and Butter also referred to as (Spread) have resorted to positioning their products based on consumers' health concerns and income.
The health concern has to do with the presence of hydrogenated fats (unnatural fats) in spreads and producers are now focusing on reformulating the recipes (product ingredients), while reducing the unnatural fats.
Margarine is a non-dairy product created as substitute for butter, while Butter is more natural dairy product made from cow milk. The above issues have also moved the producers in making frantic efforts to improve on product variants, and to address the need for product value delivery. Besides quality and innovations, consumers are demanding for pocket friendly products that fit into their income bracket.
The innovation and product segmentation taking place in the spread market has also taken a toll on some of the manufacturers, forcing them to begin to play at the lower end of the market. This, however, has led to product segmentation into different sachet and plastic container sizes. The demand for the products is said to be rising as a result of increasing urbanization, population explosion, indulgence and increasing number of confectionary outfits springing up across Nigeria, which are identified as responsible for growth of the spread market in the country.
One of the multinational companies with huge presence in Nigeria, involved in the manufacture of margarine is Unilever Nigeria Plc, while others are imported brands. The Nigeria market has over 15 margarine and butter brands jostling for dominance nationwide. Of this number, three are manufactured by Unilever Nigeria Plc namely Flora, Blue band and Stork.
However, five of the products have emerged top of the mind brand with national reach, the five are Flora; Blue band from Unilever Nigeria while the others are imported brands such as Topper, Sima and Goldengate. However, more imported brands in the market are Crystal farm, Land O'lakes, Blue bonnet, Brummel and Brown, Breakstone, STK Royal Margarine, and Madina Baking Butter, Rhoda, Fleischmann, Bonne mama, to mention a few.
Flora, Topper, Goldengate and Sima are basically used by confectionary companies such as Quick Service Restaurants, QSR, and road size caterers for jollof rice, flour foods like chin-chin, meat pie, bread etc. But Blue band is mainly used by households.
Segmentation: Vanguard Companies and Markets, (C&M) findings revealed that the spread market is segmented into two major categories on the basis of its usage as spreadable and non-spreadable. The demand for butter is more in comparison to margarine due to the rising preference of consumers for natural products. But the demand for margarine is also rising as producers of margarine moved to reformulate their product recipes.
Increased home-baking trend has also helped to drive the demand for margarine in Nigeria. There is also the rising trend of natural food consumption due to the shift in consumer preference for processed foods. There is increasing demand for butter owing to increasing media focus on food and diet.
Findings: C&M findings reveal that sales of margarine once regarded as a healthier alternative to butter, have declined in the market, while butter sales have risen.
Growing suspicion of processed foods and a re-evaluation of saturated fat have prompted many consumers to return to butter. Households have also cut back on the amount of bread they eat because most bread are prepared with margarine and they are buying more butter because they consider it to be more natural. Giving the high rate of health concerns, consumers health are taken into consideration by margarine producers as cholesterol level in margarine is now being reduced.
C& M findings showed that the brands sell at different price margins, for example, Topper sells 10kilogrammes for N10,500; Golden Gate of the same kilogramme sells for N9,500, likewise Rhoda sells the same kilogramme for N9,000.
Consumers' reaction: A caterer who gave her name as Mrs. Florence whose preference is Topper because of its product quality, complained that it is now expensive. A situation she attributed to inflation in the economy. She went further to say that three years ago, the brand sold for N4,000 but it is currently selling for N10,500. This increment, she said has, however, given other brands like Golden Gate, Sima and Rhoda advantage in the market.
Another consumer, Patrick Ibe, stated: "I am not a spread person, but buys Blue band, the light blue plastic cover type, for the family because it is believed to contain lower fat." A wholesaler, who gave his name as Alhaji who sells flour and margarine at Alaba-suru market said Topper, Sima, Goldengate and Rhoda sell highest for baking, while Blue band sells highest for household consumption, while all of them are making serious impact in the market in terms of volume sales.
On why consumers prefer Topper, Sima and Goldengate, he said; they are used for all purposes, baking, cooking etc. "I do not sell Blue band, but the product is good for individual consumers because of its various sizes and low fat level," he added. A supermarket attendant along LASU- Isheri expressway, corroborated C&M's findings when he said that demand for both products are rising at same time as preference for butter spurred producers of margarine to reformulate in line with the consumer preferences.
A nutrition expert, Carly Oguma, stated: "concern about fats has led to many brands removing hydrogenated fats from their spreads and reformulating their recipes. A wholesaler, Pat Lawson Enterprises at Alaba-suru market, Lagos- Badagry expressway, confirmed that the most patronized by consumers is the Blue band margarine, because of its softness and low cholesterol level, particularly the one with the sky blue cover.