The Arla Foods Fonterra joint venture has been working hard to differentiate the two brands. Anchor has had a major relaunch with pack revamps and the traditional yellow colours toned down.
Senior brand manager Mikael Horsboll says the £7.2m promotional campaign is already having an effect, with recall of the new television adverts up 10%. "Although it's early, we've already seen a positive impact on sales."
And Lurpak is receiving a similar investment with a marketing spend of £10m.
The merger has given the company greater clout in the category. Marketing director Hanne Sondergaard says: "We have virtually an open door to the retailers now." And she says this is challenging Unilever Bestfoods' grip.
The market is still digesting the second biggest deal in yellow fats in the last 18 months ­ Dairy Crest's acquisition of St Ivel's branded spreads. The logic underpinning it was pretty clear, however, with St Ivel finally throwing in the towel as the fourth player in a mature sector with limited growth, letting the big three ­ Arla, Unilever Bestfoods and Dairy Crest ­ slug it out.
Dairy Crest is now in a more respectable third place in branded butters and spreads, says ING Baring's Nicola Mallard. "Take out Dairy Crest's £22m own label business, and you have Unilever Bestfoods at £217m, Arla Foods Fonterra at £199m and Dairy Crest at £174m [ACNielsen]. It also rebalances Dairy Crest's portfolio back towards the value added market. "Dairy Crest has a good track record of managing brands and this gives it an entrance in the low fat sector," says Mallard.
Dairy Crest boss Drummond Hall says its new strength across the major categories will give it real competitive edge, plus more opportunities to work with retailers on category management. "We have complementary products and brands with distinctive trade and consumer propositions."