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Butter’s comeback is churning big sales

Published: Tuesday, April 22, 2014 12:00 p.m. CDT • Updated: Tuesday, April 22, 2014 12:02 p.m. CDT
Caption
(David Joles/Minneapolis Star Tribune/MCT)
Hope Creamery manager Jay Logan tosses a chunk of freshly churned butter into the butter wrapping machine, April 10, 2014, in Hope, Minn.

From dairy giant Land O’Lakes to tiny creameries, the butter business is booming.

Per capita U.S. butter consumption has hit highs not seen in about 40 years. The once demonized fat is downright de rigueur in cooking circles, a star on celebrity chef shows. It has become a natural food darling.

Butter owes much of its comeback to its simplicity. Consumers have become increasingly picky about processed foods with lists of indecipherable ingredients.

“There has been a complete resurgence of butter since at least 2008, and it really has everything to do with ‘real food,’ ” said Melissa Abbott, culinary insights director at the Hartman Group, a market researcher. “There’s been a backlash against margarine and other processed spreads.”

Those non-butter spreads have less fat and calories than butter, but fat has lost some of its stigma, at least in moderate doses.

“As a butter maker, I’d like you to eat as much as you can,” said Victor Mrotz, owner of Hope Creamery in Hope, Minn. “Just don’t put a whole pound on your baked potato. Moderation is the key.”

Minnesota has long been a butter hub, once dotted with dozens of small creameries. Most of those are gone now, with Hope being an exception.

New Ulm, Minn., is home to one of the nation’s largest “private label” butter makers, Associated Milk Producers Inc., or AMPI. AMPI’s butter is found in all sorts of supermarkets under different names, and the co-op is a huge producer of little foil-wrapped butter pats for restaurants.

Arden Hills, Minn.-based Land O’Lakes, while it has no creameries here, is synonymous with butter, owner of the only truly national butter brand. Big margarine makers have seen sales slip, but Land O’Lakes butter has experienced the opposite, according to a 2013 report from market researcher Mintel.

“Margarine has a reputation for being less natural with more artificial ingredients,” according to Mintel.

Overall, U.S. butter sales by volume increased 5 percent last year, and Land O’Lakes grew even faster, the company says. Meanwhile at AMPI, 155 million pounds of butter will be churned out this year, up from 100 million pounds eight years ago.

On the demand side, per capita annual butter consumption hit 5 pounds in 2008, the first time it’s reached that threshold since at least 1975, according to the U.S. Department of Agriculture. In 2012, the latest year for which data is available, per capita consumption had climbed to 5.6 pounds, a 12 percent increase.

Part of butter’s renaissance stems from the rise of TV programing about food and chefs, particularly on the Food Network, said Heather Anfang, vice president of U.S. dairy food marketing at Land O’Lakes. “The vast majority of those chefs use butter, so there’s a lot of talk about butter,” she said.

Consumers listen to chefs. “They are the leading food educators of our time,” said Hartman’s Abbott.

The foodie focus on TV and certain Internet sites has consumers paying more attention to details, educating themselves on ingredients and reading labels. “They have a strong desire to know what’s in their food,” Anfang said. “And they want a simple label.”

A product can’t get much less complex than butter. It’s made from two basic ingredients: sweet cream and salt, or just cream, of course, if it’s unsalted butter.

Land O’Lakes has innovated over the past decade, adding butters made with canola oil and olive oil, both of which make the product more spreadable. The company has even launched garlic herb and honey butter spreads. Still, the new products’ ingredient lists are quite short, and that’s what consumers increasingly want.

Land O’Lakes is a giant co-op with interests in everything from animal feed to herbicides. But it started back in the early 1920s as a butter producer, and today makes by far the nation’s leading butter, its Indian maiden logo a marketing icon.

Hope Creamery also started in the early 1920s, in the small town of Hope. By 2001, the little co-op was on its last legs when Victor Mrotz purchased it.

He bought Hope Creamery to supplement his income. At the time, it was churning out only 30,000 pounds of butter a year. Today, it’s doing more than 300,000 pounds.

Mrotz tapped into another big food trend — the local phenomenon. Increasingly, restaurants and grocery stores have been searching out locally produced or grown products.

Hope made its way into Lucia’s restaurant in Minneapolis and more eateries followed. Kowalski’s supermarkets picked up Hope’s butter, and Lunds and Byerly’s followed. Minnesota food co-ops are also big customers.

All of them are following consumer demand for more butter, be it the higher-end — and higher-priced — stuff that Hope makes or the classic sticks from Land O’Lakes.

One quarter of consumers indicated in a Mintel survey that they’re eating more butter this year than last, compared to 13 percent who said they were eating more margarine. And margarine usually costs less than butter.

Mrotz said he has the demand to produce more butter at Hope. But he still farms, which also demands his time.

Hope Creamery is in a small brick building where it turns out butter by the batch, not through continuous production like the big players. Still, the process is similar, just on a smaller scale.

Cream is trucked in from Plainview Milk Products Cooperative about 70 miles away from Hope. It gets pasteurized in stainless steel tanks. Buttermilk is skimmed off. What’s left goes into the churn — a big rotating drum — where it clumps into curds and eventually morphs into a big blob.

It’s not really complicated. “Butter is kind of a throwback product,” Mrotz said.

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