1. Edible Oils
How significant is the rise of the health-conscious connoisseur?
August 2009

2. Issues in the market How price rises affect demand for edible oils
Will the increased incidence of cooking at home spare the solid oils market?
Can specialty oils move beyond their niche status?
Is the healthy eating trend still driving sales of olive oil?

3. Summary A constant flow of sales A sustained healthy eating agenda
Retail value sales of edible oils have grown by 30% between 2007 and 2009 to reach £323 million. With inflation taken into account, real-term value growth stands at 17%
Liquid oils dominate value sales, accounting for 96% of the market in 2009
Value sales of vegetable oil are expected to surpass those of olive oil in 2009 as price rises have led consumers to trade down to cheaper varieties of oils
A sustained healthy eating agenda
Consumers are paying greater attention to the food they eat, and the effect it has on their health
As consumers look to maintain a healthy diet, they are cutting down on foods deemed unhealthy
Consumers are increasingly looking to emulate the Mediterranean style of diet that includes olive oil as a key feature in many of the dishes
Penetration dips
During the last four years, penetration of oils used for cooking and in salads has hovered at just over nine in ten main shoppers
Heavy volume usage skews towards under-45s, ABs and those at the family lifestage

4. Internal Market Environment
Consumers are increasingly looking to adopt the Mediterranean style of diet that has olive oil as a key feature
There has been renewed interest in home cooking and consumers are looking to create some of the complex dishes at home
Commodity price rises have pushed up the price of edible oils, and this has benefited standard vegetable oil over olive and speciality oils
Consumers are looking to cut down on less healthy foods, especially those deemed high in saturated fats

5. Broader Market Environment
Consumer expenditure has dropped in 2009 as consumers cut back on discretionary spend
The AB socio-economic class are the fastest-growing socio-economic group and are the highest-volume consumers of oils
The significant consumption of processed food may mean that children are not getting all the nutrients they need from their food
In 2003, just over a fifth of men and just under a quarter of women were classed as obese

6. Strengths and Weaknesses
Penetration – olive oil has a penetration of just over 50% of households
Home cooking – consumers cooking more meals from scratch at home ensure that the use of edible oils will continue to increase
Growth opportunities – health concerns and growth in consumption of salads as people strive to meet the recommended five a day
Brand awareness – long-established heritage brands like Filippo Berio have a high level of brand awareness and customer loyalty
‘Foodies’ – growing attention to food and recipes should drive experimentation of different oil
Formats – oil sprays enable consumers to control and minimise the amount of oil they use on their food and in cooking
Brand loyalty – a fifth of consumers claim to stick to the same brand
Unhealthy image – applicable mainly to solid oils, these will face continued decline as consumers move towards healthier liquid oils
Price instability – edible oil prices are vulnerable to price fluctuations in global commodity prices
Innovation – the category has received minimal innovation in the last few years
Marketing support – many of the oil brands receive very limited above-the-line advertising support
Declining volumes –Over a third of consumers (36%) are trying to use as little oil as possible
Own-label growth – over half of consumers usually buy own-label edible oil products as opposed to just over a quarter who usually buy a branded oil
Poor aisle layouts – in-store layouts of edible oils may be limiting the category’s potential as the fixture may be confusing, restricting product trial

7. Who’s innovating?
Top product claims for edible oil launches – UK, January 2006-June 2009
Source: Mintel GNPD
Organic and premium products have helped to drive new product innovation, bringing naturalness and healthy eating credentials to the edible oil category
Tesco in its Finest range launched a Cretan Extra Virgin Olive Oil in 2009 that is organic-certified, and produced from a protected designation of origin
Jamie Oliver’s peppery Italian Extra Virgin Olive oil launched in 2007 retails at £5.99 for 250ml

8. UK retail value sales of edible oils, 2004-14
Market size
UK retail value sales of edible oils,
Source: Mintel
Value sales of edible oils increased by a little over 30% between 2007 and 2009 to reach an estimated £323 million in 2009
Global demand for vegetable oil has increased as the rapid growth of biofuels is diverting increased amounts of vegetable oils into alternative energy production
Significant value sales growth in this market has come from price increases in vegetable and sunflower oil

9. Segment Performance
UK retail value sales of edible oils, by type,
Source: Mintel
Following several years of market leadership for olive oil, in 2009 value sales of seed oil are expected to surpass those of olive oil as price rises have led consumers to trade down to cheaper standard oils
Longer term, olive oil still remains popular as consumers take advantage of its diversity, using it for cooking, on salads and in marinades
There is a need to continually inform consumers about the many uses of specialty oils in order to further raise their profile

10. UK retail value sales of olive oil, by brand, 2007-09
Market Share
UK retail value sales of standard oils, by brand,
Standard oil sales are dominated by own-labels, with the main brands being Crisp ‘n Dry and Flora from Unilever
Despite rising production costs, olive oil manufacturers have not significantly increased their prices
Thanks to its Mediterranean origins, leading brand Filippo Berio (Societa per Azione Lucchese Oli e Vini), from Italy, has an established presence in the UK olive oil market
Branded manufacturers have very actively used price promotions to drive sales and prevent loss of share to the growing range of own-label products
Source: Mintel
UK retail value sales of olive oil, by brand,
Source: Mintel

11. Brand Communications and Promotion
Main monitored media advertising expenditure on edible oils, *
Source: Nielsen Media Research/Mintel
Edible oils have received minimal above-the-line support in recent years
The dominant medium used for advertising oils was press, including food and lifestyle titles and supermarket customer magazines
RH Amar has been the leading advertiser in support of the Filippo Berio brand
To counter the threat of own-label eroding their share, branded manufacturers need to inform consumers of their brands’ USPs

12. The Consumer – Usage of Edible Oils
‏Frequency of using oils for cooking and in salads,
Base: main shopper/all users of oils for cooking and salads aged 15+
Overall penetration of oils used for cooking and in salads has remained at around nine in ten households
However, frequency of use is increasing and more of these users are using cooking oils at least once a day
As consumers pay greater attention to the food they eat, they may look to cut down their oil consumption for health reasons
“Over the last 18 months, I have stopped deep fat frying any foods. I will use alternative methods eg oven, shallow fry, George Foreman grill etc.”
year-old ABC1 male
“I have started to use as little oil as possible for health reasons.”
year-old C2DE male
Source: Toluna/Mintel

13. The Consumer - Types of Oils Used and Attitudes
Consumers were asked “Which, if any, of these cooking oils/salad oils have you bought to use at home in the last 12 months?”
Cooking oils/salad oils bought to use at home in the last 12 months, March 2009
Base: 1,000 internet users aged 16+
The health attributes claimed for the typical Mediterranean diet have made olive oil a popular choice, especially amongst more affluent consumers living in London and the South East
Vegetable and sunflower oils share a relatively less affluent C2 consumer base who interchange between both oil types depending on price
Stir-frying is the most popular use for oil, with eight in ten people cooking stir-fries
Own-label oils are the choice of over half of consumers while three in ten choose the cheapest product
“I only use extra virgin olive oil low-fat spray, I use it for all types of frying, which mainly consists of stir-fries.”
year-old ABC1 female
Source: Toluna/Mintel

14. The Consumer – Broadening consumer’s repertoires
‏ Repertoire of cooking oils/salad oils bought to use at home in the last 12 months, March 2009
Base: 1,000 adults aged 16+
The key demographics of those buying just one type of oil are:
aged 45-54
DE and relatively low household income
live in the North and Scotland
live alone
shop mainly in Morrisons.
By contrast, the key demographics of those buying five or more types of oil are:
aged 35-44
AB and high household income
live in London
two-person household
read broadsheet newspapers and shop
A quarter of consumers are adventurous enough to be using four or more types of oil, offering suppliers the challenge of broadening consumers’ repertoires of oil
Source: Toluna/Mintel

15. The Consumer – Multipurpose oil uses
‏ Consumers were then asked:
“For which of the following purposes do you use cooking oils/salad oils?”
Base: 958 internet users aged 16+ who use edible oils
Source: Toluna/Mintel
Olive oil is first choice for use in marinades, salad dressings and for dips (probably mixed with balsamic vinegar and other herbs and spices)
These dishes typify the classic Mediterranean diet
Edible oils are used for cooking stir-fries by about four fifths of consumers as it is a quick meal solution that requires minimal cooking skills

16. The Consumer – Target Groups for Edible Oils
‏ Consumer target groups for edible oils, March 2009
Base: 958 internet users aged 16+ who use edible oils
Own-label Value Seekers
(34% of sample)
The key characteristic of these consumers is that they buy the cheapest oil on sale, taking advantage of special offers and happily buying own-label.
Own-label Oil Reducers
(23% of sample)
These consumers are health-conscious and use as little oil as possible in their cooking. They are also keen on supermarket own-label products
Healthy Oils
(13% of sample)
These consumers are brand-conscious and also try to use as little oil as possible in their cooking for health reasons. Unlike the other consumer groups, they also pay attention to the sourcing of their oil
Branded Loyalists
(30% of sample)
These consumers are loyal to brands and usually stick to the same brand once they find one they like
Source: Toluna/Mintel

17. oxygen
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