2020 – A Banner Year for Butter
“A bit of butter makes the batter better.” That has been the theme for Americans who have stayed at home more than usual this year due to the global coronavirus pandemic.
Over the last several months there has been a large uptick in home baking and cooking, which has caused butter consumption to rise tremendously. According to the U.S. Department of Agriculture, butter production has risen 6% over the first nine months of the year and is on track to top two billion pounds for the first time since 1943.
While butter has been on a slow incline throughout the past four decades, it gained more momentum in the early 2000s and finally regained its spot above margarine consumption in 2005, a feat not accomplished since 1957. Now, with more consumers cooking and baking their own goods at home in 2020, butter is booming once again.
One dairy cooperative taking advantage of this boom is Land O’Lakes. According to a company statement, Land O’Lakes net earnings rose during the third quarter of 2020, largely due to a surge in retail butter sales. Additionally, CEO Beth Ford says she expects butter sales to increase more than 20% in 2020 thanks to rising retail demand that has helped to make up for lost restaurant business.
These retail sales have more than offset the decline in restaurant sales for Land O’Lakes, which usually account for 15% to 20% of the company’s business, according to Bloomberg.
Ford said during an interview with Bloomberg that the boom in retail demand prevented Land O’Lakes from storing butter this summer that was produced during peak milk production for the holiday baking season. However, butter sales soared during these hotter months, which is typically the slowest baking season.
Some 372 million pounds of butter were in cold storage at the end of August and inventory levels will depend on the demand for the ingredient during the “less-than-typical holiday season,” according to Rabobank.
“Often times, even for the retail business, what you do is you make a lot of butter because it’s
peak milk production time, and you store it for the key season, during the holidays,” Ford said in her interview with Bloomberg. “But the buying was so strong that we didn’t do that, because we were selling right off the line.”
Another factor pushing butter sales higher is its clean label. With a minimal list of ingredients compared to margarine and other butter substitutes, butter is moving up in the ranking in the eyes of consumers.
“[Butter] has benefited from clean-label trends as well as fad diets like keto, which require high fat intake. Butter also has gained ground as shoppers avoid processed alternatives like margarine,” according to an article in FoodDive.
While butter’s fate still remains uncertain this holiday season as it looks likely that there will be smaller than normal get-togethers, there’s no doubt that 2020 will still go down as a banner year for the dairy product.