Competition in the fiercely fought-over dairy middle ground is set to intensify as Medina Dairy extends its Watsons brand to cheese and butter and ramps up its non-dairy offering.

Last year, sales of Watsons branded products soared 77.1% to £64.1m [Nielsen MAT 25 December 2010], placing it just outside The Grocer Britain's 100 Biggest Brands survey.

Until now, only milk, cream, yoghurt and eggs have been sold under the brand. But buoyed by its sales success and positive coverage in The Grocer Medina launched Watsons butter into foodservice last week and will shortly roll it into retail. Mild and mature Cheddar as well as Red Leicester cheese will follow in mid-July.

The heritage of the brand and quality of the products made Watsons ripe for expansion, said trading director Steve Carter. "With the recognition The Grocer has given the brand in the past six months or so, with reference to it being the fastest-growing brand in convenience, we feel it's time to develop the brand and move it into ­other key dairy categories," he added.

Medina has pulled its Simply Milk brand, launched in May 2010, and will instead sell all its milk under the Watsons brand.

It also plans to ­increase the number of high-volume non-dairy grocery lines such as soft drinks it offers its 7,000 independent retail customers to lessen their dependence on cash & carry stores. "Medina has always been known as a dairy company. We're developing that offer but developing it around the retailer, wholesaler and foodservice ­customers," said Carter.

Broadening the Watsons portfolio is likely to give Medina added strength in the highly competitive ­convenience ­sector against other dairy players such as Robert Wiseman Dairies' Black & White milk brand, which grew 19.1%, to £156.5m [Nielsen] last year.

In May, another middle-ground player, JN Dairies, embarked on a major advertising push for its milk brand Goodness From Eden as it extended distribution to central England.