Arla Foods makes pledge to UK dairy industry
It revealed its strategy as it announced group 2017 results, with the UK its largest market, where retail and foodservice revenue grew to £1.94bn (€2.21bn), up from £1.79bn (€2.19bn) in 2016.
Arla said this increase, along with the company’s recent £72M investment in the UK business, illustrated its commitment to further building its presence in the dairy market.
It added that this signalled the strength of Arla’s farmer-owned cooperative model, as growth was secured despite challenges such as volatility in the global milk market, a weak British pound and Brexit uncertainty.
More than 10% of Arla’s branded net revenue came from products launched in the last three years.
Brands growing
The Arla brand grew revenue by 18%, Anchor by 16% and Lurpak by 9%.
New product innovation also drove growth with Arla Skyr, the Icelandic style yogurt, up by 45%, Arla Protein up 69% and Arla B.O.B, the milk brand, up 45%.
“Arla was both the fastest-growing FMCG [fast-moving consumer goods] brand in the UK and the only leading dairy company delivering branded growth,” said Tomas Pietrangeli, md, Arla Foods UK. “We also saw significant wins in both our foodservice and own-label offering in 2017, such as the Morrisons’ fresh milk tender win.
General health
“General health and food quality continue to grow in importance to the British public, whether eating at home or out and about. The natural simplicity of our product ingredients, their ease of use for chefs and our farmer-owned status are all resonating with operators, particularly with quick-service restaurants, coffee shops, pizza chains and pubs.”
Arla’s 2020 Good Growth strategy is to focus on digital and e-commerce to create an offer targeting younger and more digitally savvy shoppers, as well as modernising the perception of dairy.
The company said that, during 2018, it would increase the branded share of its portfolio, which would continue to provide “some mitigation” for Arla farmers against the volatility of global milk prices.
Arla Foods is owned by 11,200 dairy farmers, around 2,500 of whom are British.
