Butter prices

With already tight margins, manufacturers need to think about how they can reduce the impact of rising butter prices without sacrificing consumer experience.

You don’t have to work in the food industry to have noticed the recent rise in butter prices. Mainstream and industry press around the world have been reporting on the effect this has on consumers and manufacturers alike. But why is the price of butter going up, and what can manufacturers do about it?

What is causing the price hike?

Put simply, the rising butter prices come down to a shortage of milk. There are many reasons for this including a drop in milk prices back in 2016 which caused a lot of farmers to slow production (Source: BBC). Alongside this there has also been a reduction in milk production from South America, poor weather conditions and a decrease in the amount of livestock within the EU. All of this is reflected in the price of butter, which is now the highest it has been since 2013. These changes are causing manufacturers to look at ways of avoiding a decrease in their margins. One option is passing the cost on to consumers, which runs the risk of turning them away. Another is looking for butter replacements or alternatives.

Reducing costs

There are a few ways you can replace butter without compromising consumer experience, such as replacing the butter with another fat, for example shortening. Shortening, a fat of vegetable origin is already widely used in the bakery industry due to its economical price, relatively long shelf life and hypo allergenic nature. It also often has superior technological and structural properties for baking when compared to butter. The neutral taste of shortening is a limitation when considering it as a replacement, but there are options available to manufactures to help them achieve a buttery flavour. Bake stable butter flavourings, produced by TasteTech, are able mimic the flavour profile of butter. When used in conjunction with shortening, or other vegetable oils, this can give products the rich, buttery taste consumers expect. For manufacturers this allows a consistent, cost reduced product to be formulated which meets consumer expectations and means that they are less at risk from the damaging effects that come from the unstable butter market.

TasteTech has 25 years’ experience creating flavouring solutions for the food and drink industry and have numerous bake stable flavour solutions to suit a wide range of applications.

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