Consumer spending on dairy could rise £2.4bn to £10bn per year by 2012 if the industry focused more on what shoppers really wanted, according to new research from Dairy Crest. Its report, Dairy for Life, seen exclusively by The Grocer, says retailers need to merchandise the category better, while manufacturers should focus on convenience, health and taste. "It's all about bringing the consumer to the heart of our business," said Jonathan Ryder, group category development manager at the Cathedral City manufacturer. "Regardless of all the press coverage about dairy products being unhealthy, people still see them as healthy. The sector is well-placed to grow ahead of other major categories." Household penetration for dairy is at 99.9%, so growth has to come from adding value and increasing spend. Much of that comes down to merchandising, says Dairy Crest. The fresh dairy category should be given an extra 10% shelf space in an average store, it argued. The product should also be ranged together in a 'super category', without incursions by products such as juices. Shoppers would be further encouraged to shop the dairy aisle if the offer were simplified, said Dairy Crest. "Our research identified three trends: convenience, health and taste. Hitting all three is the sweetspot," said Ryder. The company's Lighter variant of its Cathedral City Cheddar brand had hit that spot, he said. Since its launch in January, sales had clocked up more than £7m - ahead of forecasts. The report is based on more than 600 hours of consumer research, which found dairy products were a key driver for every type of shopping trip. Dairy Crest's report has been sent to the major multiples and will be briefed to all employees and suppliers. Ryder said he was not concerned that the research would also benefit rivals. "Raising the value of the dairy market will benefit all of us," he said. "We would be disappointed if our market share didn't grow over the next three years."

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