Spreadable butter seems able to do no wrong as it continues to tap into the hunger for natural yet convenient products. Almost all the big brands have launched spreadable versions in recent years followed by light, lighter, organic and unsalted versions, much to the delight of consumers who spent £257m in the category last year [TNS].

Keen to grab a share of the market and in a perfect position to tap into both of the key trends, Dale Farm recently launched its premium dairy brand Loseley into the sector.

It believes the newcomer could be worth £2m within three years, which could see it muscle its way into The Grocer's Top 20 butters and spreads within the same timespan. "The demand for dairy has never been higher and this has been particularly noticeable for naturally spreadable butters. Consumers aren't prepared to settle for anything less than the real deal," says Brian Beattie, head of marketing for Loseley.

Even at £2m, Loseley would have a long way to rub shoulders with the big boys in the spreadable category, however. Arla claims Lurpak Spreadable Unsalted, which hit shelves in January 2006, is the most successful launch in the total butter and spreads category in the past two years. It has clocked up sales of £8.8m so far, according to Nielsen [52w/e 19 April 2008]. Kerrygold says the introduction of its Lighter Softer Butter helped the total brand grow 19% in the past year.

Where there are winners, there often have to be losers. The money would have been on dairy spreads to have struggled against the increasing popularity of spreadable butter.

Not so. As a whole they are bearing up remarkably well, with value sales up 5.2% in the past 12 months [TNS]. Of note was the performance of Flora Buttery, which Unilever relaunched last September. It says the brand was up 70.5% to £18.9m in the 12 weeks ending 30 April.

It was a different story for Dairy Crest's St Ivel Gold brand, which failed to stand up to the competition and was ditched in April (see p47).

Still, it was not all bad news for the dairy giant as its Utterly Butterly brand managed to up its market share to command 35% in terms of value and 39% in volume [Nielsen 52w/e 17 May, 2008]. This helped it become the fourth-bestselling spreadable product, as well as increase its lead over arch rival I Can't Believe It's Not Butter from Unilever.

Competition within dairy spreads is likely to get even tougher this year with Clover poised to extend its portfolio later in the summer with a lighter ­version.n