The weather can be crazy sometimes. For example, sometimes it can look sunny when facing the north and partly cloudy in the south, but there are menacing storm clouds to the west.

This sums up the butter category well. The good news is the entire butter/margarine/spreads category saw growth in the 52-week period ending Aug. 11, according to data from Chicago-based market research firm Circana. Dollar sales ticked higher by 1% year over year (YoY) to $7.3 billion, with unit sales increasing the same 1% figure to 1.6 billion.

There are sunny skies regarding dairy butter. The subcategory’s dollar sales jumped by 4% YoY to $5.1 billion, while unit sales increased a similar 3% YoY to 984 million, Circana research shows. However, the skies are cloudier for margarine, whose dollar sales dipped by 5% YoY to $1.65 billion, while unit sales declined a lesser 2% to 473 million. 

Dairy butter blends also dropped by 3% YoY to $435 million, with unit sales declining 5% YoY to 97 million.

Unfortunately, “rain is currently falling” for dairy alternative spreads. This subcategory’s dollar sales swooned by 21% YoY to $99 million, with unit sales also not faring well, dropping 16% YoY to 18 million, Circana data shows.

Despite mixed results for butter, some processors are doing extremely well, are optimistic, and see sunny skies ahead. 

“Despite all the challenges, the butter category continues to grow nationally, driven by a couple of factors: flavored butter, super-premium butter, and new, consumer-friendly packaging and formats that make shoppers’ lives easier as we transition back to a ‘normal’ world post-COVID,” Michael Burdeny, chief commercial officer and president of Consumer Products Group, California Dairies, well known for Challenge Dairy Products butter offerings, tells Dairy Foods.

“Although consumers are more price-conscious, often buying on deal or opting for private label, they are also shifting their spending to products that make meal planning easier, allow for indulgence, add flavor or comfort, or meet special needs like flavors, formats or health benefits. As we know, butter makes everything better,” Burdeny adds. 

Land O’Lakes is definitely another company that saw strength in butter in the past year, with CEO Beth Ford stating during her prepared remarks appearing in the company’s latest annual report that dairy foods — specifically branded butter — are a major source of strength for the Arden Hills, Minn.-based cooperative.

Smooth product launches

Despite butter alternatives seeing YoY sales declines, according to Circana data, this trend could change. Thanks to Bill Gates’ blog, millions of people this year were introduced to Savor, a company the billionaire Microsoft co-founder is invested in, whose goal is to make “delightfully rich foods without animal, farmland, fertilizers, hormones or antibiotics.”

“I’ve tasted Savor’s products, and I couldn’t believe I wasn’t eating real butter,” Gates wrote on his blog, called “GatesNotes.” “The big challenge is to drive down the price so that products like Savor’s become affordable to the masses — either the same cost as animal fats or less. Savor has a good chance of success here, because the key steps of its fat-production process already work in other industries.”

Looking at specific dairy products, some companies are introducing products in the butter alternative subcategory to perhaps boost future sales as well. A prime example is Bunge, which earlier this year introduced Beleaf PlantBetter in North America. Beleaf PlantBetter is the “answer to the complexities faced by food manufacturers and bakers seeking plant-based alternatives that match the sensory qualities and versatile functionality of traditional dairy butter and can easily be integrated in their current production process,” the company says.

“Beleaf PlantBetter stands out by delivering the same sensory excellence and processing ease as traditional dairy butter,” says Aaron Buettner, president, Food Solutions at Bunge. “We are excited to offer a solution that not only meets the high standards of our industry partners but also supports their sustainability goals all while delivering a lower cost-in-use compared to butter.”

Traditional butter launches

Of course, as the Circana data proves, there is definitely a market for traditional butter products as well. Kerrygold, an international brand of Ireland-based Ornua, is meeting this need, earlier this year introducing a new format of pure Irish grass-fed butter: Salted and Unsalted 1LB Butter Sticks. Rolling onto store shelves across the U.S. with four 4-ounce sticks per 16-ounce box, Kerrygold 1LB Butter Sticks are an “all-purpose, all-natural butter, perfect for baking, cooking, or serving tableside with every meal,” the company says. 

“We're doubling-down on the love our fans have for Kerrygold butter by doubling the number of sticks in these packs,” said Lauren Arffa, head of Innovation at Ornua Foods North America. “We know consumers have been craving a 16-oz. size butter from Kerrygold, and we’re thrilled to provide a solution for them with our 1LB sticks: the No. 1 category innovation this past year."

Also owned by an Irish-based company, Tirlán Ingredients, Truly Grass Fed expanded its selection of 95% grass-fed butter sticks to shelves across the country, joining its already popular butter block products, at Natural Grocers locations.

Calling all collaborators

Although collaborations are more pronounced for other dairy categories, Churn Foods, the grass-fed flavored butter company, made news in May when it released a hot honey butter, in collaboration with Paramount Consumer Products, to celebrate the 20th anniversary of the fan-favorite classic “Mean Girls” (2004), as well as the streaming premiere of the new hit movie “Mean Girls” (2024) on Paramount+. The collaboration combines grass-fed, hormone-free, non-GMO, high butterfat, European-style butter with flavor-packed ingredients, hand-selected by founder Chef Michael Tashman.

This year saw a new steakhouse butter introduction as well. A.1. debuted A.1. Steakhouse Butter, marking the brand’s first innovation outside the “sauce bottle” in more than five years. It is intended to meet the growing consumer demand for restaurant-quality flavors at home. 

“From sauces to butter, we know our fans are constantly seeking new ways to recreate the steakhouse experience at home,” says Holland Robinson, brand manager, A.1. “An iconic accompaniment to red meat since 1824, A.1. knows steak. By blending time-honored tradition with modern culinary trends, the new Steakhouse Butter is the perfect partner to the grill, delivering a bold, buttery, and savory complement to any meal.”

Lactose-free opportunity?

Looking ahead, one big future growth avenue for butter could be lactose-free varieties. Challenge Dairy Products placed a huge emphasis on lactose-free with its national distribution for one of its Spreadable Lactose Free Clarified Butter with Canola Oil. The strategic decision to increase distribution is largely driven by the ever-growing lactose-free category, which is projected to reach nearly $20 billion in value by 2025, according to the company.

While it has not been a long period since the launch, Challenge Dairy is already “seeing encouraging traction for our Lactose-free Spreadable Butter. We’re excited about the potential for lactose-free butter, especially since this has been an underserved need for lactose-free consumers,” Burdeny maintains. “In the past, these shoppers had to choose between butter that didn’t agree with their digestive system, and margarine.

“If you look overseas at the butter category in Europe, for example, you’ll always find a couple of lactose-free butter options in the store,” he continues. “Here in the United States, 27% of shoppers are already buying lactose-free dairy products, so it only makes sense to have this available in a butter offering.”

Beyond lactose-free butter, Challenge Dairy is seeing excellent momentum with its Challenge Spreadable Butter with Pure Avocado Oil, “which is on-trend as consumers look for simple, healthy products and ingredients,” Burdeny reveals. “We also see great potential in butter innovation that’s easy to use as convenience products continue to proliferate the grocery aisles.”

California Dairies’ Burdeny is definitely optimistic about the future of butter. “Butter is resonating with new cooks who are looking for less-processed, short-ingredient-list, and natural products, as well as younger consumers who want to get the most out of their meals with ‘wow’-inducing, butter-rich flavor excitement,” he concludes.