Mondo was never shown eating butter or talking about it in canon. Nevertheless, after killing Chihiro Fujisaki in a moment of rage caused by some sort of jealousy, he got executed by Monokuma. At the end of the execution, he turned into a butter which was stored inside a container in which Mondo is seen "promoting" the product.
The process in which Mondo became a butter, was that in his execution it would show Mondo being strapped to motorcycle, spinning round and round inside a cage, which was named The Cage of Death. At the end of the execution, a machine pops. A moment later, it appears Mondo already turned into a butter inside a container, for then being eaten later by Monokuma along with some pancakes accompanied with honey and coffee (which it's revealed at the end of Chapter 2).
During the Class Trial in chapter 3, Monokuma it's shown again eating pancakes with Mondo Butter which it's seen for a few moments.
In eleventh episode of Future Arc, Mondo is seen resembling liquid butter, with his coat lying upon it, while accompanied with all the deceased of Class 78 morphed into how they looked when they died in the Killing School Life, shown inside Makoto's hallucination.
It is one of the most popular cargo ships around the Danganronpa franchise, though not as popular as other cargo ships like Hinata x Orange Juice or Korekiyo x Seesaw. It became popular after Mondo's execution, in which it revealed him in a butter container. People then started making memes about it, in some of which Kiyotaka Ishimaru could be included, like in this image which shows Ishimaru being "fed" by the spectator with Mondo's butter while crying over his death. The image immediately became popular amongst fans which made similar versions of it like this other image. People would name this ship "Mondo Butter", since that after his execution, his butter container was called like that.