Butter Market

Market Overview

The global butter market size was valued at USD 51.49 billion in 2021 and is projected to reach USD 65.9 billion by 2030, registering a CAGR of 2.78% from 2022 to 2030. Increasing consumer demand for prepared foods, the growing acceptance of plant-based and lactose-free diets, The supply of butter in the Asia-Pacific region has always been heavily influenced by the local market, and this influence has only increased over time.

Globally speaking, the industry is exhibiting clear signs of enormous expansion. Demand in the food industry has dramatically increased as a result of rising consumer interest in processed food items such as bakery goods, confectionery, desserts, and ready-to-eat meals. This trend can be seen across the whole food industry. The expansion of the market for butter is anticipated to be driven during the projected period by the growing demand for packaged products across the retail and foodservice channels.

Market Dynamics

Global Butter Market Drivers

• Growing demand for processed food products

The demand for dairy products across the world has been shifting away from their replacements that are based on vegetable oil and toward dairy fats instead. This tendency can be related to a shift in taste preferences as well as an improved perception of the health benefits of dairy fat. It is projected that more dairy products would be consumed in emerging nations due to a rise in the consumption of processed foods as a result of rising discretionary incomes among consumers and the increasing globalization of diets.

The increased consumption of butter in the bakery industry is being driven in large part by the ever-increasing demand for baked goods such as cakes, bread, cookies, and biscuits. The production of confectioneries cannot proceed without the incorporation of this component. It is anticipated that the demand for butter would expand as a result of the increased popularity of a variety of different confectionary foods. It has found extensive use in ready-to-cook and ready-to-eat meals, which are exploding in popularity as a result of the rise in demand for convenience foods. In the next years, it is anticipated that the dairy beverage industry will continue to see a growth in the number of inventions and advances that involve the use of butter.

Global Butter Market Restraints

• The increasing popularity of lactose-free and plant-based foods

The growing consciousness among consumers about the treatment of animals contributes to an increase in the demand for foods derived from plants. Additionally, food and beverages made entirely from plants are rapidly making their way into the mainstream retail items market. The ever-increasing idea that plant-based goods are healthier and safer drives up the demand for natural butter substitutes such as soymilk and nut milk-based butter. Likewise, the demand for nut milk-based butter also increases.

The number of people who are lactose intolerant is on the rise, which drives up the need for dairy substitutes. Products that include lactose are regarded as unhealthful because of their role in the development of obesity and other conditions associated with lifestyle choices. It is anticipated that the rapidly expanding dairy alternatives industry, with its new product developments including non-dairy ice creams, vegetable oil-based bakeries, and confectionery items, will impede the expansion of the global market.

Global Butter Market Opportunity

• The rising popularity of butter across retail & foodservice sectors

One of the things that sell at a rapid pace across all retail channels is butter that has been packaged. During the epidemic and subsequent nationwide lockdowns, a significant number of consumers resorted to preparing meals and baked goods at home. Because of these considerations, the demand for its retail packaging skyrocketed in both developed and developing economies. Over the past few years, premium-grade products have also seen increased demand from customers in developed countries. Butter made from A2 milk, butter made from organic milk, and butter with no added ingredients is all considered premium types of butter. The expectation is that rising levels of consumers' discretionary spending will further boost the demand for premium butter among customers.

Butter is an ingredient that can be found in a broad variety of establishments around the world, including hotels, restaurants, cafes, and catering companies. The ever-evolving preferences of consumers have led to a surge in the use of it in a wide variety of cuisines that are provided freshly in cafes and restaurants. In the next years, it is projected that the developing pattern of eating away from home and purchasing ready-made meals would present an opportunity for the expansion of the industry.

Regional Analysis

The market is split by region into North America, Europe, Asia-Pacific, and LAMEA.

The Asia-Pacific region is the market that is expanding at the quickest rate for butter. The local market has always been a significant factor in the Asia-Pacific butter supply, and that role has only grown more important over time. In order to fulfill the rising demand of consumers in the Asia-Pacific region, butter processing factories have been rapidly growing in recent years. This has contributed to the expansion of the market. Also, although butter is most commonly associated with Western cuisines, its possible application in Chinese cuisine has been aggressively marketed by large producers such as Fonterra, leading to an increase in its use in Asian cuisine and, as a result, in the Asian market.

Products made with peanut butter have a significant majority share in the nut butter market. However, the majority of the market for spreads is serviced by companies that specialize in chocolate spreads, such as Nutella. This is because chocolate spreads are the most popular type of spread. In recent years, the demand for nut butter has shifted away from its traditional use in spreads and toward its utilization as a component in the preparation of meals. Artisanal nut butter is becoming increasingly popular in nations where brands are placing a greater emphasis on the development of one-of-a-kind recipes that utilize organic raw materials as their primary component. KP Snacks introduced its very own line of palm oil-free peanut butter products in August 2020. Both the jar and the lid are made from 100 percent recyclable materials, the product has 35 percent less salt, and it does not include any added sugar or artificial flavors.

Segmental Analysis

Based on type, the market is divided into salted and unsalted butter.

• The salted segment holds the largest market share due to higher consumption

Due to their global reach and popularity, salted products have the highest market value on a global scale. It is largely sold in retail and food service channels as packaged butter. Salted butter has a longer shelf life than unsalted butter and is easier to preserve. Additionally, salted butter enhances the flavor and texture of the product. It is anticipated that the ever-expanding distribution channels and burgeoning internet retail will continue to fuel industry expansion.

The unsalted variety is utilized in a variety of processed items, including bakery goods, noodles, and pasta. The desire for unsalted varieties has expanded dramatically among food makers. In addition, the rising consumption of refined butter can be ascribed to its increased use in new culinary products such as premixes and ready-to-cook meals.

• Industrial Processing Segment Holds the Major Market Share

Based on application, the market is segmented into industrial processes, retail channels, and food services.

The industrial processing sector is the market leader. The segment's growth is primarily driven by the increased demand for butter in the food processing industry. The confectionery industry uses butter extensively as its principal ingredient. The increasing investment by manufacturers in the innovation and development of unique confectionery goods has raised the segment's need for butter. Butter is a common ingredient in numerous baked goods, especially bread and cakes. In the foreseeable future, it is projected that the rapidly expanding bakery industry will propel market expansion.

The rapid expansion of retail channels is a result of their improved distribution capabilities. These channels provide a solid foundation for packaged butter sales. As a need or pastime, consumers have developed an interest in baking at home in recent years. During the pandemic, the packed butter segment has undergone significant expansion due to home-growing and cooking practices.

Recent Developments

March 2022, A well-known supplier of packaging, Wipak UK, is getting ready to launch a recyclable paper wrap for butter. This wrap will be the first of its kind in the United Kingdom, and it will be the first of its kind to be able to be recycled kerbside within the paper waste stream. Additionally, this wrap will have a carbon footprint that is 68 percent smaller than market-standard wraps, which are made of aluminum/low-density polyethylene (LDPE)/paper laminate.

February 2022, The introduction of Majestic Brand Dairy's organic butter, which is produced through an "old school" method, was recently announced. The Majestic butter is available in both unsalted and salted forms. It is sold in packages of four wrapped sticks weighing 4 ounces each and has an estimated retail price of $7.99.

March 2022, Willamette Valley Pie Company has unveiled its freshly revamped appearance. The corporation has acknowledged that it is revising its image to bring it in line with its continued expansion and the expanded selection of products it provides.