Arla sees revenue increase

Arla Foods amba, the farmer-owned dairy company, today released its half-year results for 2017, announcing rising revenue driven by strong growth amongst its flagship brands, especially its range of Arla branded products.

Today’s announcement comes as the farmer-owned dairy company also announces a rise in the monthly milk price paid to farmers equating to an upward movement of 0.81 pence taking the UK standard litre price for conventional milk to 30.79 pence. This has contributed to a total increase of 42 per cent over the last 12 months.

Underpinning the UK growth was a 10 per cent increase in net revenue from its category-leading brands including Lurpak and Castello, with the Arla brand seeing particularly strong revenue growth of 15%. This was driven by high performance in the yogurt category, with consumer-favourites Arla Protein and Arla skyr seeing revenue rises of 59 per cent and 82 per cent respectively.

These results reflect an exciting year so far for Arla in the UK where it has pursued its plan to invest £37.5m in sites during the year, launched Arla Organic Free Range Milk, extended its popular Arla Protein range with the launch of Arla Protein Pouches and, in the milk aisle, enjoyed success in its grocery retailer own-label business, agreeing a new three-year exclusive contract with Morrisons, set to begin in March 2018.

A combination of investment and innovation helped to ensure Arla branded products recorded the largest growth of any UK brand on a list of 100 compiled by The Grocer in March.

Volume driven revenue has decreased in the UK by four-and-a-half per cent as the company took significant steps to drive its profitable growth, partnering with its customers to drive long term strategic plans and optimise its product portfolio.

Peder Tuborgh, CEO, Arla Foods, said: “As the global dairy market improved, we have responded to the sustained rally in global dairy prices while continually improving our product mix across key markets. As a result, we have increased the on-account milk price to the farmers who own our company by 42 per cent over the last twelve months.They needed that, as the past two-and-a half years have been tough for most dairy farmers around the world. Yet despite that tough backdrop, we have continued to invest, innovate and grow and that growth is making an important contribution not just to our farmer owners, but to the overall resilience of the industry.”

Tomas Pietrangeli, Managing Director, Arla Foods UK, said: “We’ve seen a significant increase in our milk price over the last 12 months – a welcome boost for our farmer owners – and our mission remains to secure the highest possible value for their milk, predominantly through the development of our branded portfolio.The strong growth of the Arla, Lurpak and Castello brands shows that we were right to focus on these as part of our UK Strategy 2020.

“This success is likely to be welcomed given the wider turbulence of the last six months. We are entering a defining time for British dairy as the UK finds its place outside the EU. Arla will continue to work in the coming months and years on generating greater returns for our farmer owners and being a champion of British dairy at a time when it needs one the most.”

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.