The market of butter and spreads in Ukraine is very dynamic, so the purpose of the research conducted by KOLORO branding agency was to identify the main market trends, consumer preferences, as well as to analyze the main producers of these products.
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Features of the butter and spreads market in Ukraine. Consumer preferences
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Butter is a product made from cow’s milk with a milk fat content between 50% and 82.5%.
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The following types of butter are distinguished according to the mass fraction of milk fat:
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- conventional oil (82.5%);
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- amateur (80%);
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- peasant (72.5%);
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- sandwich (61%);
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- teal (50%).
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| \KOLORO branding agency will not only professionally conduct market research (market analysis, competitor analysis, target audience research, etc. with current data), but will also develop the design of packaging and labeling of your product, develop corporate identity and outdoor advertising design, create a logo and brand book, come up with a brand legend and advertising slogan, select the most profitable packaging printing and much more.\n\n\t\t\t\t\t |
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Spread is a product based on a mixture of milk and vegetable fat with a total fat content ranging from 39% to 95%.
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In terms of fat content, spreads are of the following types:
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- creamy and vegetable (mass fraction of milk fat more than 50%);
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- vegetable and creamy (mass fraction of milk fat 15-49%);
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- vegetable-fat (without milk fat).
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Spreads are bought most often by people who are saving money, as the prices of spreads are lower than butter. Those who do not buy spreads most often refuse to buy them because these products are not associated with healthy food. Currently, there are no restrictions on the content of dairy ingredients, which is why the dairy products (spreads) presented on the Ukrainian market contain extremely low amounts of natural milk fat (most often their share does not exceed 10%).
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The issue of “separating” products containing milk from natural dairy products has already been raised in the government. If producers of spreads are obliged to indicate that their products contain milk fat substitutes, it will reduce the demand for their products. If a limit of at least 50% milk fat content in the composition of a milk-containing product is introduced, the demand and cost of dairy raw materials will increase in the butter and spreads market, which will lead to an increase in the price of spreads. The increase in the cost of spreads will lead to a decrease in demand for these products.
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Due to the ban on imports of Ukrainian products to the Russian market, the supply of raw milk on the domestic market increased, which in turn led to a decrease in the cost of butter and a decrease in demand for spreads. So back in 2010, 40% of consumers bought butter and 60% bought spreads, while in 2012 butter consumers became more than 50%. That is why the prospect for the near future is to reduce the output of spreads and increase the production of natural butter.
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Main trends in production and consumption of butter and spreads in Ukraine
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In the Ukrainian market of dairy products, butter and spreads occupy 16% in monetary terms. Domestic producers give preference to making spreads with low milk fat content, so there is less and less natural butter and real spreads on the market. Thus, only one third of the milk supplied for processing is used for butter production.
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The production of spreads grew until 2007, and since 2008 there has been a decline in production. Over the last three years the output of spreads decreased on average by 9.6%: in 2012 to 50.8 thousand tons compared to 57.1 thousand tons in 2011. The situation with butter production is quite the opposite: earlier its output and consumption was decreasing, but recently there has been an upward trend. In 2011 the production of butter increased by 3.8%, and in 2012. – by 15.7% – up to 88.2 thousand tons.
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The charts show the indicators ofbutter and spreads productionin Ukraine in 2009-2012 in physical terms:
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In general, the consumption of butter decreases every year: in 2011 it amounted to 74 thousand tons, i.e. compared to the previous year it decreased by 15%. The average Ukrainian buys only 1 kg of butter per year, despite the fact that the annual consumption of this product is 5.8 kg. This means that it is necessary to increase the production of real butter, emphasizing the naturalness of products.
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Analysis of exports and imports of butter and spreads
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Exports of butter, according to the State Customs Service, amounted to 679 tons in 2012, which is three times less than in 2011. In monetary terms, butter exports also decreased by 3.3 times to 2.887 million dollars. Import of butter increases every year, so in 2010 it increased by 0.8 million dollars in monetary terms, and in 2012 it increased by more than 80% in physical terms compared to 2011.
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Export of spreads has a tendency to grow: in 2011 it increased to 31 thousand tons in physical terms or by USD 25.12 million in monetary terms compared to 2010, and in 2012 it increased by 11.33% and amounted to USD 116.98 million. Ukraine is the leader among CIS countries in the import of spreads.
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Belarus was the main supplier of butter and spread to the domestic market, but due to the rise in the price of its products, the largest amount of spreads and butter began to be imported from New Zealand.
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Key players producing butter and spreads
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The butter and spreads market is characterized by the presence of a large number of players (about 150 companies). But more than half of the output is produced by 4 large companies.
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The most popular brands of butter in Ukraine:
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- Tulchinka (Terra Food);
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- Selyanske (Lustdorf);
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- President (Lactalis);
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- Our dairyman, Vershkova Dolina (Starokonstantinovsky dairy);
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- Slavia, Yagotinske (Dairy Alliance);
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- Galicia, My Korivki (Galicia);
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- and others.
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According to the data of the Union of Dairy Enterprises of Ukraine, at the end of 2012 the production volumes of butter producing companies were as follows:
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The chart shows that 50% (44.4 thousand tons) of the total butter production volume is accounted for by 16 major producing companies.
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The structure of the oil market, on the other hand, looked like this:
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The largest producers of spreads in Ukraine:
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- Andrushevsky Butter and Cheese Factory (TM Andrushevske and Popilnyanske);
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- Tulchinsky branch of Terra Food Group (TM Tulchinka);
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- Techmolprom of Almira Company;
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- Ratnevsky dairy plant from Agropolis Group of Companies (TM “Shchedriy Vechir”);
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- Galicia (TM “Dvі korivki”).
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According to the data of the Union of Dairy Enterprises of Ukraine, at the end of 2012 the production volumes of companies producing spreads were as follows:
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Terra Food has a company calledTulchinkaand produces butter and spreads under the brand name of the same name. The company is equipped with the latest equipment and constantly introduces new technologies, which guarantees consumers high quality products. Tulchinka produces 2 types of butter and 12 types of spreads.
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Lustdorf Company is one of the top three butter producers in Ukraine. The company produces butter under the brand name “Selyanske” and spread under the brand name “Burenka”.
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Lactalis Ukraine has been operating in the Ukrainian market since 1996 and is one of the leaders in the dairy products market. The company produces butter under the trademark “President”, which is very popular among the residents of Ukraine.
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SUMMARY
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Based on the results of the analysis of the Ukrainian market of butter and spreads, the following conclusions can be drawn:
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- In the butter and spreads market, there is a trend towards a decrease in the production of spreads and an increase in the production of natural butter. Recently, consumers have been favoring spreads over butter due to their lower cost, but natural butter consumption is expected to increase in the future.
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- Ukraine is a net importer of butter and spreads, and over the past few years imports of these products have increased and exports have decreased.
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- The most popular brands of butter and spreads are Tulchinka, President, Nash Molochnik, Dvі korivki, Selyanskei Burenka.
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- As Ukrainians refuse to consume butter and spreads due to the association with inconsistent product quality, in the future, manufacturing companies should pay more attention to the production of natural butter with a high proportion of milk fat content.
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Branding agency KOLORO will not only professionally conduct marketing research (market analysis, competitor analysis, target audience research, etc. with the current data), but also develop the design of packaging and labels of your product, develop corporateidentity and design of outdoor advertising, create a logo and brandbook, come up with a brand legend and advertising slogan, select the most profitable printing of packaging and much more.
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In addition, the company KOLORO is engaged in 3D-modeling, we can make for you a high-quality subject, product or advertising visualization! You can order the service you are interested in by contacting us by phone or e-mail(s):+38-(057)-760-26-05; +38-(057)-760-26-06; +38-(099)-618-87-50;info@koloro.ua.
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