How to Make Bread Without Butter
Nothing truly substitutes for butter. When creamed, butter develops air bubbles -- especially when creamed with sugar -- which provide lift to breads during baking -- oil and shortening do not. You can substitute butter with a different fat and create a similar texture, but you can't create a similar taste. Rich bread doughs, such as those used for brioche and milk rolls, and flavored breads, such as banana, respond best to butter substitutions. Many plain bread types don't use any butter or fat.
Oil
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Neutral oils -- canola, grapeseed and sunflower, for example -- give bread a moist texture without added taste or aroma. Use 3/4 cup of oil for every 1 cup of butter used in a bread recipe. If you're making a savory bread or one with little sugar, try olive oil. Olive oil lends its pronounced taste and character to anything it touches, and you can complement it by adding freshly chopped herbs to the dough.
Margarine
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You can usually get by with using margarine or shortening in a bread recipe, but expect a tougher crust. Brioche, for example, isn't brioche without butter -- it requires a tender crust and buttery taste -- but you probably won't notice the change if you're making flavored baked goods, such as raising bread. Substitute an equal amount of margarine for butter.
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