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By Hollis Ashman and Jacqueline Beckley, Consumer Understanding Editors | 07/01/2006
Peanut butter began as a paste-like substance produced by the Incas in South America. The peanut crop traveled to Africa, Spain and finally to the American colonies. It was George Washington Carver who helped the southern states recovering from the Civil War understand the value of crop rotation and growing crops such as peanuts instead of just cotton and tobacco.
Peanut butter was introduced to the modern world at the Louisiana Purchase Expo of 1904 in St. Louis. Peter Pan Peanut Butter, utilizing the Rosenfield churning process, made a smooth peanut butter in 1928 and enabled a shelf life of up to a year. After a dispute, Rosenfield took the process to Skippy and created the first crunchy style peanut butter by adding chopped peanuts to the mix in 1934. Procter & Gamble’s Jif brand enter the market in 1958.
Peanut butter is in 90 percent of households and most families with kids consider it a staple and kid-friendly food. However, 3 million kids have a peanut allergy, so schools have either become nut-free or nut-conscious. The Peanut Institute has worked hard to educated consumers on the nutritional value of peanuts and peanut butter and the products’ benefits in snacking. Median usage is low with households using only 1 to 1-1/2 jars per month.
Smart Balance has stepped back and reconsidered peanut butter’s standard of identity. What is peanut butter? Is it a protein source with fat or is it a fat source with protein? During World War II, peanut butter was an affordable protein source. But as nutritional research began to understand the value of “good” fats, Smart Balance has reframed the idea of peanut butter (and many other oils) from protein source with fat to fat source with protein. They have focused on the healthy “good” fats and enhanced them with additional healthy oils to enable easy access to omega-3 fatty acids and lower saturated fats.
Sales of the sweet spread category have increased 11 percent since 2000 with a market size of $1.8 billion in 2004. Year-to-year growth from 2003 onward has been on the order of 0.5 percent, according to a 2005 study by Mintel International. This change in growth is driven by the fact sweet spreads are not stand-alone products. They are typically consumed as a topping on breads or as an ingredient in a recipe.
The emphasis on low-carb diets impacted this category substantially in the past few years. Peanut butter sales are $880 million of this $1.8 billion Sweet Spread category for 2004 and have a growth rate of 2 percent.
Peanut butter is still viewed as too high in calorie content to be considered entirely “healthy.” At retail, consumers see Jif, Skippy, Peter Pan and private label as the category leaders. Creamy peanut butter outsells chunky peanut butter by 4 to 1 (in dollar sales) and is reported to be preferred 2 to 1.
Peanut butter-flavored products have increased in new product introductions by 68 percent since 2000 to 619 new products that have peanut butter-flavor notes. This ubiquity of peanut butter flavor enables consumers to get their peanut butter needs met without actually consuming peanut butter itself.
Smart Balance is entering this category and needs to differentiate itself from the category brand leaders. The category is crowded and is growing only in the premium and natural areas.
Consumers are very confused with regard to what is “healthy.” Diets that highlight protein have subsided recently. A recent Women's Health Initiative study found low-fat dieting does not help cancer or heart disease in post-menopausal women, contrary to what many people, even researchers, believe. Consumers are questioning what are the basic rules they should use to eat healthy.
Wine and chocolate, once considered “bad” foods, are now being highlighted as high in antioxidants and “good” for you. The messages consumers hear are about the right carbohydrates and the right fats. But finding and understand those carbohydrates and fats may require an advanced degree in nutrition. And even that today may not help. The average consumer just does not have the time. He is looking for easy identifiers of trustworthy healthfulness.
Our Healthy You! research integrates 20 to 30 conjoint studies to generate a database that can be used to understand the experience of foods — from product, situation, emotions and brands/ benefits. It tells us the key attributes for a healthy peanut butter are taste, texture, aroma, price and brand.
Consumers are looking for taste and an inherent value of healthiness from structure-function claims like fiber to reduce your risk of heart disease and diabetes; builds and maintains strong bones; part of a low fat/ low cholesterol diet to reduce the risk of some forms of cancer; just two tablespoons provide important heart healthy nutrients. In short, if the consumer is going to eat peanut butter, he wants good taste and some insurance claim of health.
Key trends that can impact this idea are: convenience and healthfulness.
Convenience: Manufactures are responding to consumers’ hectic lifestyles by creating packaging that assists convenience. Peanut butter comes in squeezable packages, with jelly and as a premade sandwich (J.M. Smucker Co.’s Uncrustables).
Healthfulness: Nuts have both the halo of health and reality of health. Nuts are a nutritionally dense whole food. Various health claims for nuts are allowed such as “scientific evidence suggests but does not prove that eating 1.5 ounces per day of most nuts [such as almonds, hazelnuts, peanuts, pecans, pistachios, and walnuts] as part of a diet low in saturated fat and cholesterol may reduce the risk of heart disease. See nutrition information for fat content.”
However, peanut butter does not have this overall halo of health. In addition to the whole peanut allergy area, peanut butter is perceived as a fatty food. Peanut butter contains on the level of 24 percent fat. Eighty percent of this fat is unsaturated fat — "the good fat" — which may actually help lower LDL cholesterol levels in blood. It has become included in many medically endorsed weight loss and diabetic diets, due to its ability to met consumers’ cravings in a healthy way.
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