Challenge is the best selling brand of butter in the West.

Butter demand has been strong over the past two years, but the business has a distinct seasonality, according to an industry insider.

With people baking, cooking and entertaining for the holidays, butter sales in the fourth quarter represent about 35% of annual sales for Challenge Dairy Products, said John P. Hvizda, senior vice president of retail and private brands for Challenge.

There is a two-fold approach to preparing for the holiday season. Challenge starts planning for fourth-quarter demand in the first quarter of the year, getting forecasts and planning production and inventory accordingly, he said during the latest “Dairy Download” podcast.

“But ultimately when it comes to fourth quarter, it’s about having product available when and where it needs to be, shelves full,” he said.

Challenge focuses on helping consumers save time and bring some inspiration to their holidays. That could be tips and tricks, recipes and engaging them through social media, he said.

The pandemic is in the rear view mirror, and people value getting together. The holidays are a special time that really hasn’t been normal for the past couple of years, and Challenge expects butter demand to be “really strong” as people cherish that time together, he said.

“Overall, butter ranks really high from importance to shoppers in the holiday period,” he said.

You can’t have cookies for Santa and fill baking needs without butter, he said.

“So we expect demand to be very strong,” he said.

There was very strong demand in October, and that’s coming off two-year highs. Demand is noticeably bigger that prepandemic levels, he said.

“Those trends around getting together, saving time, simple ingredients … butter ticks all those boxes and is a staple during that holiday period,” he said.

But like everyone else, Challenge is dealing with inflation, with higher energy, labor and on-farm costs for its farmer owners. Keeping product affordable for customers comes down to smart planning and finding any and all efficiencies, he said.

That involves such things as logistics, making sure the company is sending out full truckloads, leveraging its scale to production runs and procurement efforts, he said.

“We’re doing everything we possibly can to mitigate these costs so consumers can still have butter be a key staple of their holiday meal planning,” he said.

Despite higher retail butter prices, demand is strong. As inflation is hitting other aspects of consumers’ lives, they might be eating out less but they’re trying to have a more elevated experience at home, he said.

“So they’re really investing in things, premium products. You know butter makes everything taste better, so lots of butter usage, lots of baking at home,” he said.

“So we don’t see them sort of shortchanging butter just based on the importance it has in sort of their lifestyles at home,” he said.