Sanitarium’s exit from peanut butter will lift the duopoly, Pics, and Nut Brothers the most
Grinding to a halt
To the dismay of many kiwis, Sanitarium recently announced that their hundred plus years of grinding peanuts had ground to a halt in July, citing “declining customer demand”.
In a category that seems to have entered a golden era in the last 20 years – from maybe three brands in the 1970s to at least sixteen now - Sanitarium’s explanation probably won’t cut the mustard with the thousands of brand loyalists forced to find a replacement.
In an attempt to shed some light on this culinary calamity, Scale NZ has taken out a long spoon and dug deep into data from our 2024 Brand Essentials survey of peanut butter consumers. We go right down to bottom of the jar for some crunchy-yet-gluey data about what has made Sanitarium appealing, how it lost its mojo, and where its loyal customers will go once their last jar is scraped dry.
A simple recipe
Brands can be complicated things, but Sanitarium peanut butter wasn’t that sort of brand. It was a just brand that was really good at the basics: easy to find and good value for money. For most of their hundred years, sticking to this simple recipe was enough.
In more recent years, home brands (Essentials at Woolworths, Pams at New World) have applied the same recipe across dozens of food and beverage categories. In peanut butter, although Sanitarium performs well for Availability (by being in both chains), home brands have the home advantage: always the favoured player in their own domain, distribution across every store in the network, free access to premium shelf space, and no retailer margins.
Given that Pams and Essentials can both out-do Sanitarium on what Sanitarium does best, and have been doing so for years, the latter’s demise comes as no surprise. Equally unsurprising is that our uplift modelling predicts Pams is due to receive the biggest market share gain of over 5%, with essentials taking home a 2.7% increase, roughly proportional to the number of stores they each have, their current market share and the brand equity that these brands command in the minds of Sanitarium’s abandoned customers.
By competing primarily on Availability and Price (see the spider web charts below), and being inescapably reliant on the duopoly for distribution, it would have been obvious – probably for many years – which side Sanitarium’s bread was buttered on. The real surprise is that they did nothing to adapt to the new competitive reality, even while other competitors embraced it.
Brand image of Sanitarium, Essentials and Pams among recent buyers of peanut butter
Bringing peanut butter to a gun fight
While Sanitarium has sat and watched their lunch get eaten by their retail partners, new peanut butter brands loaded with a pioneering spirit have emerged. Together, but in very different ways, they have driven consumer engagement with the category, and - importantly – prices, to new highs.
Pic's has been particularly prominent, launching creative campaigns that highlight its simplicity and authenticity. For example, its 2022 campaign, “Nutting to It,” used humour and minimalism to convey the natural simplicity of its product, featuring its founder and iconic production processes like a concrete mixer roaster. The campaign extended across digital, social media, out-of-home, and radio channels, ensuring wide consumer reach.
Our modelling suggests Pic’s will pick up over 4% of new market share among Sanitarium refugees.
Fix & Fogg uses experiential marketing to deliver messaging around sustainability. It started with small-scale street-side sales in Wellington and grew through word-of-mouth and collaborations with local communities. The brand emphasizes transparency, recycling initiatives, and premium, unique flavours, which appeal to adventurous consumers and anticipate the need for even loyal customers to curious about new flavours from trusted brands. They even claim to be the first peanut butter in space, moving away from traditional jars, with a squeezable pack innovation.
Fix & Fogg’s estimated market share gain from Sanitarium: over 2%
Nut Brothers, have endeavoured to own the artisanal peanut butter domain, engaging consumers through a crafted, small-batch approach. Its branding emphasizes premium quality and fun, pioneering innovative flavours such as Salted Caramel. The focus is on elevating the eating experience.
Nut Brothers’ estimated market share gain from Sanitarium: nearly 1%. It may not sound like much, but when compared to their current size (just 1/6th of Pams), it represents the best relative share gain for any of the independent brands.
Ceres Organics and other organic brands appeal to health-conscious consumers with transparent sourcing and eco-friendly packaging. These brands highlight their organic certification and ethical supply chains, often marketing through partnerships with wellness influencers and platforms.
Ceres Organics’ estimated market share gain from Sanitarium:0.5%
Mother Earth targets mainstream consumers with convenient packaging and affordability, while also promoting its connection to New Zealand farms and communities through marketing campaigns that blend affordability with quality.
Mother Earth’s estimated market share gain from Sanitarium:0.8%
Sanitarium was there when New Zealand’s peanut butter landscape began shifting away from just the basics, toward storytelling, sustainability, and premium experiences. Sanitarium watched while newer entrants shaped consumer expectations of peanut butter into new and more valuable forms. As each brand carved out its niche, whether through artisanal quality, sustainability, or innovative flavour profiles, Sanitarium doggedly stuck with its old offering, when they could have innovated or doubled-down into a super-authentic OG positioning.
While competition has tightened as more players enter the space, those competitors have also demonstrated there is ample opportunity to succeed for those that can master their craft, produce a delicious product, and position themselves a safe distance from home brands.
For Sanitarium’s leadership, tossing out a hundred years of brand equity and 70% brand awareness may seem like the right thing to do, but after jettisoning most of their cereal brands in June, this is beginning to look like a trend.
A hundred (or even ten) years from now will Sanitarium have any brands left?
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