There’s an old saying, “Everything is better with butter.” The richness of butter is a key ingredient in baking, pan-frying, and sautéing, and is perfect on top of a baked potato. Then there’s the spreadability of butter on toast and pancakes, and its usage in casseroles, pasta, and even butter pecan ice cream, where pecans are roasted in butter before being tossed into the frozen treat.

Given its versatility, the butter/butter spreads category, with a 5.5% year-over-year (YoY) increase, churned out dollar sales of $5.65 billion in total U.S. multi-outlets and convenience stores for the 52 weeks ending Oct. 6, according to John Crawford, senior vice president of Client Insights-Dairy at Chicago-based Circana.

Butter, which comprises 92% of the butter/butter blends category, generated dollar sales of $5.2 billion at a YoY increase of 6.1% for the same time period. Butter Blends, from a much smaller base, whipped up sales of $437 million, a slight decline of 1.5%. On the volume side, butter/butter blends exceeded 1.192 billion pounds, up 2.6%.

When dissecting growth in margarine/spreads, the $1.74 billion segment is down 5.5%, while volume, at 695 million pounds, saw a YoY decline of nearly 2%, the market research firm reports.

On the creamer side, encapsulating coffee creamers, half & hal,f and dairy creamers, there was single-digit growth of 4.1% for cream/creamers, with percolating dollar sales of $6.76 billion, Circana reports. Volume is 3.444 billion pints, up 2.5%.

Crawford tells Dairy Foods that 75% of the cream/creamers market consists of the juggernaut $5.04 billion coffee creamers segment, with a YoY increase of nearly 5% and volume of 2.48 billion pints, a 3.1% YoY growth rate.

“Dairy cream is small,” Crawford says. “Refrigerated Dairy Half & Half (22% of market share) generated $1.5 billion in sales, up 3.5%, while refrigerated dairy coffee creamers were up 3.1% to 2.486 billion pints.”

Scott Dicker, senior director of market insights at Chicago-based SPINS, concurs that both butters and creamers are growing in dollar sales and units.

“Butter sales have reached over $5B as of October — a 4% increase compared to this time last year,” Dicker says. “Unit growth has also increased 2.1% reaching over 1 billion units. Similarly, creamer sales have also grown 4% compared to last year with $9.6B in sales in addition to 2.7% growth in units sold.”

Flavored butters and creamers

Experts note that flavored products, such as the new A.1. Steakhouse Butter and a plethora of limited-time creamers centered around the holidays like Pumpkin Spice and International Delight’s new Hot Chocolate Marshmallow Creamer and returning favorites like Peppermint Mocha in regular and zero-sugar varieties, are driving sales.

“Flavors and specialty products can have a large impact on category sales. For example, butter pecan flavored creamers grew over 50% this year amassing over $28 million dollars in sales,” Dicker notes. “As brands look to or continue to grow, bringing new innovative flavors to shelves is a creative way to disrupt what was once a more traditional category.”

Noting that flavor innovation in butter is “quite small,” Crawford explains that plain butter makes up 56% of the category, sweet butter comprises 42%, and “all other” flavors like herb, garlic, cheese, and A1 encompass only 2% of the category.

Yet, that may be changing, particularly as Gen Z and millennial consumers are turning to flavored butter and cream as tasty cooking fats to use at home. These demographics also are the “most open” to trying launches with premium, sweet, and spicy flavors, echoing their interest in novelty and individualization, states Chicago-based Mintel’s August report, “The Future of Butter, Margarine, Cream & Creamer.”

Flavored butters are experiencing innovation worldwide, Mintel’s report states. For example, in Sweden, Johan Jureskog Selection Chipotle Butter is a spicy hot, whipped butter with clear spice heat and the taste of smoky chipotle. Avocado is represented in Poland’s Naturale Vegan Salted with Avocado Taste which contains avocado oil and flavoring. In the U.S., Walmart’s private-label brand, Bettergoods, offers a Garlic, Parmesan, and Basil Butter that creates delicious garlic bread, chicken, veggies, and pasta, it says.

“Butter is a category with very little innovation,” Circana’s Crawford states. “The last big innovation was Land O’Lakes Spreadable Butter with Canola Oil. Kerrygold has had success with Irish butter and recently introduced a spreadable version of their own (without any additives). Land O’Lakes introduced Butter Balls (a bag of little butter in ball shape).”

Noting that the rich deliciousness of butter will always be a staple in kitchens across the world, SPINS’ Dicker suggests that the category is continuously growing and providing new alternatives. “In the last few years, we’ve seen all sorts of trends from butter boards to butter coffee changing the way we think, purchase, and consume butter products.”

Kerrygold, an international brand of Evanston, Ill.-based Ornua which means “new gold," introduced a new format of pure Irish grass-fed butter: Salted and Unsalted 1LB Butter Sticks — double the number of sticks in its signature green 16-ounce box. Available on store shelves across the U.S. with four 4-ounce sticks, Kerrygold 1LB Butter Sticks are an all-purpose, all-natural butter, perfect for baking, cooking, or serving tableside with every meal, the company says.

The 1LB Salted and Unsalted Butter Sticks stay true to the Kerrygold tradition of producing flavorful, creamy, and all-natural dairy products, hailing straight from 14,000 small Irish family farms that provide premium-quality milk for Kerrygold products, the company says.

Cream of the coffee 

When it comes to flavors, coffee creamers slay the competition, with flavors like French vanilla, hazelnut, caramel macchiato, Irish crème, white chocolate raspberry, amaretto, and mocha giving coffee connoisseurs a lot to smile about. Inviting consumers to enjoy a “cup of good cheer,” during the holiday season, brands like International Delight, Nestlé’s Coffee Mate, and Starbucks are releasing limited-edition creamers like peppermint mocha, pumpkin pie spice, and frosted sugar cookie.

Among the new creamers offered by Nestlé’s Coffee Mate are a new limited-edition launch, Coffee Mate Bagel & Cream Cheese Flavored Creamer. Other seasonal launches feature a Kit Kat-flavored creamer, made in partnership with confectioner Hershey, as well as new seasonal iced coffees, Pumpkin Spice — with notes of cinnamon, cloves and nutmeg — and Peppermint Mocha flavor varieties. In March, Coffee Mate unveiled a new Dirty Soda creamer designed specifically to accompany soda brand Dr Pepper. A Dirty Soda Coconut Lime Creamer also hit store coolers.

Interestingly, unlike cow’s milk, which comprises the lion’s share of the category at 87% and sales of $24.9 billion compared to $2.2 billion for plant-based milks, dollar sales of dairy and non-dairy creamers are about evenly split.

“Roughly 52% of creamers contain dairy and 48% are considered dairy-free or plant-based,” Dicker notes. “Common ingredients for plant-based creamer include almond, oat, soy, coconut, and blended mixes. Despite a decrease in sales this year, almond is still the leading plant-based creamer ingredient with oat close behind at a 6% growth rate this year.”

However, Circana’s Crawford suggests that dairy cream/creamers comprise 93% of the category for a consistent 5.7% YoY increase. “Plant-based is down -0.8% and up 9%, respectively, while Non-Dairy is down -4.5%,” Crawford says. “Almond is the majority of plant-based creamers with 39%. Oat is next with 33% and Soy a distant third at 3%. Blends of Almond and Coconut make up 11% and Almond and Oat 9%.”

When it comes to the largest flavor group, Crawford explains that vanilla is No. 1 at 35%, sweet flavors is 18%, nuts, like hazelnut and Almond Joy, comprise 14%, while chocolate stands at 7% and pumpkin, despite being a limited-time fall seasonal favorite, comprises only 3%.

Driving consumption with simplicity

Like new flavors growing demand in these categories, labels like organic or lactose-free can all have a significant impact depending on consumer preferences and trends.

“For example, consumers looking to increase their healthspan, or live better longer, may turn to organic options to avoid unwanted preservatives,” Dickers states. “Currently, we’re seeing an uptick in interest in both creamers and butters labeled as organic, with 100% organic butter showing strong sales growth (8.7%). However, lactose-free options are decreasing in sales — indicating consumers are prioritizing clean products more.”

To drive sales in a sea of competition, Crawford suggests butters, which is tied closely to commodity markets to impact growth, compared to margarine, should continue to tout simple ingredients. Ditto for creamers, which Crawford notes should key in on flavors and licenses to bring excitement to the category.

About butter, “Managing pricing and being right on promotion is key to success. Continue to differentiate with innovation and messaging. Figuring out one more usage occasion (adding butter to soup, coffee, etc.) can lift the category,” Crawford says. “For creamers, continue to also tout simple ingredients and continue to reformulate to make products more ‘natural.’ Seasonal flavors are also key. Look to coffee houses for future trends. Figuring out one more usage occasion (creamers for cocktails, etc.) can lift the category.”

Brands looking for success amid a highly saturated market should pay attention to trends and focus on innovation.

“…Branching out to disrupt the market with new flavors are a few ways to drive consumption,” Dicker says, adding that businesses shouldn’t underestimate the power of market data that can help indicate what areas are ripe for disruption among the competition.

“In the future, we can expect to see the trends like flavor infusion and a preference toward value-driven innovations continue to rise,” Dicker concludes. “Over the last few years, we’ve seen these trends at the forefront of market success. Expect to see combinations of rising flavors in other categories, like confectionary, become the hottest new creamer flavor or growing interest in sustainable butter options.”