In 2019, Arla Foods UK marginally improved its total revenue to €2.28bn (up from €2.27bn in 2018), although a weakened exchange rate converts to £1.95bn (down from £2.01bn in 2018). The UK business accounts for 22 per cent of last year’s €10.5bn revenue for the global dairy cooperative which is owned by farmer owners in seven different countries.
Highlights of the UK performance once again came from its branded products with its foodservice brand Arla Pro® delivering a 45 per cent volume driven revenue growth, Castello® delivering 7.8 per cent, Anchor® 6.4 per cent and Arla® 6 per cent branded revenue growth. This growth came predominantly across the cheese, yogurt, butter and spreads categories as well as the chilled milk-based beverages sold through the Starbucks brand license.
A positive year overall for the global business, supported by the UK performance from our brands, enabled Arla to maintain a good milk price for its 9,900 farmer owners, of which 2,400 are British farms, mostly family run.
Arla Foods UK Managing Director Ash Amirahmadi comments, “2019 marks another year of progress on our branded agenda as we continued to improve our branded sales within butter, spreads, cheese and yogurt categories. As peoples eating habits change, they want different things from dairy, and our brands deliver to this. However, we are not immune from the profitability challenges facing the British liquid milk category, which remains a significant part of our business. Performance in this category held back our overall UK results in 2019.”
Because Arla is owned by farmers, all profits from the business go directly back to the farmer, or are reinvested into the business. A company-wide efficiency programme across all the countries Arla Foods operates in delivered €110 million of savings back to the Group business in 2019. Arla has also led the way in identifying a carbon net zero future for dairy. Collectively, Arla farmers already produce milk with less than half the global average but creating a carbon net zero company by 2050 and increasing transparency for consumers into how dairy is made requires investment on farms and across the business’ supply chain.
Arla Group performance
Group revenue increased to €10.5 billion (compared to €10.4 billion in 2018 and €10.3 billion in 2017) driven mainly by the global brand portfolio which achieved a branded sales volume increase of 5.1 per cent.
Global revenues of the Arla® brand grew to €3,033 million compared to €2,875 million in 2018, driven by a series of successful launches across its Lactofree and organic ranges, the introduction of new flexitarian options as well as the rapid growth of Skyr in core European markets.
CFO of Arla Foods Group, Natalie Knight, comments, “Arla’s global brands continue to be at the heart of our business and in 2019 we have clearly strengthened consumer trust in our brands. We delivered a range of popular dairy products that capitalized on increasing consumer demand for healthy and sustainable food choices, which helped us exceed our expectations for branded growth and outgrow competitors in 2019”.
The full Group results are available at www.arlafoods.com