Arla Foods UK annual results unveil increasing revenues
- Arla’s branded products show greatest revenue growth
- Food service business, Arla Pro, delivered substantial growth
Arla Foods amba has today announced its Group 2017 results1 with the UK, its largest market, growing retail and foodservice revenue to £1.94 billion (€2.21 billion), up from £1.79 billion (2.19 billion) in 2016.
This growth, along with the company’s recent £72 million investment in the UK business shows Arla’s commitment to continue to further build the UK dairy industry. It also signals the strength of Arla’s farmer-owned cooperative model as growth is driven while balancing the challenges facing the dairy industry such as volatility in the global milk market, a weak British pound and Brexit uncertainties.
Tomas Pietrangeli, Managing Director, Arla Foods UK, comments: “Arla was both the fastest growing FMCG brand in the UK2 and the only leading dairy company delivering branded growth.We also saw significant wins in both foodservice and own label offering in 2017 such as the Morrisons’ fresh milk tender win. I believe that we are in a strong position to deliver on our 2020 Good Growth strategy3.”
“Our commitment to our ambitious plans are certainly driving financial returns and we will be focused on this again during this year.Making innovative and inherently natural dairy products, produced responsibly and sustainably, enables us to continue to deliver in an ever-increasing consumer driven grocery market”, continues Pietrangeli.
Arla’s brands delivering the greatest revenue growth in 2017 included Lurpak growing by nine per cent4; Anchor by 16 per cent and the Arla brand growing by 18 per cent.
Within the Arla brand range, Arla Skyr (+45per cent), Arla Protein (+69 per cent) and Arla B.O.B. (+ 45 per cent) have driven growth by creating genuine product innovation, launching products which meet new lifestyle and nutritional demands. For Arla Protein, 2017 saw a focus on providing products which appealed to consumers in a performance mindset such as the Arla Protein Pouch and new yogurt flavours such as mango, kale and lime.
Investment and expansion of Arla’s sales channels is also driving growth in the UK. This carried through into its foodservice division which rebranded as Arla Pro during 2017 helping drive revenue growth at 22% versus last year.
The co-branding of Arla Organic into McDonald’s has contributed to a high growth rate on branded volumes and includes the relaunch of the 250mls Happy Meal milk. As the UK’s number one butter brand Lurpak’s popularity in foodservice is also increasing having seen revenue grow by twenty five per cent in 2017.
Pietrangeli added: “General health and food quality continues 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 is resonating with operators, particularly with quick service restaurants, coffee shops, pizza chains and pubs.”
Arla’s 2020 Good Growth strategy also focuses on stepping-up it’s digital and ecommerce efforts to create a distinctive offer targeting younger and more digitally savvy shoppers as well as modernising the perception of dairy.The company has made some significant steps forward in preparing itself online in 2017 with significant investment in its digital marketing communications which saw an increase of 43 per cent compared to the year before and achieved double digit growth in its ecommerce and etailing channels.
More than 10 per cent of Arla’s branded net revenue has come from products launched in the last three years.Looking to 2018, its decision to increase the branded share of its portfolio will continue to provide some mitigation for Arla farmers against the volatility of global milk prices. It’s ambitious investment plan will enable Arla in the UK to meet growing demand for its products and its investments and will lay the foundations for future growth.
1 Arla Foods amba results: www.arla.com
2 The Grocer: Britain’s biggest brands 2017
3 www.arla.com/company/strategy/strategy-2020/
4 All growth figures are based on Arla Foods UK net revenue 2017
- 2016 figures have been calculated at the 2016 average exchange rate of one pound sterling to 0.8175 Euro
- 2017 figures have been calculated at the 2017 average exchange rate of one pound sterling to 0.8765 Euro
Arla Foods is a global dairy company and co-operative owned by 11,200 dairy farmers with circa 2,500 of whom are British.
Dating back to 1881, Arla’s purpose is to secure the highest value for its farmers’ milk, while creating opportunities for their growth. With production facilities in 11 countries and sales offices in a further 30, Arla is the world’s fifth largest dairy company and largest supplier of organic dairy products. Arla has a total of more than 18,000 colleagues and its products are sold under the well-known brands Arla®, Lurpak® and Castello® in more than 100 countries.
Arla Foods UK is the largest dairy company in the country and is home to leading dairy brands Anchor®, Arla Cravendale®, and Arla Lactofree® with a turnover of €2.9 billion. The UK is largest market within the Europe Zone, contributing 35% of the zone’s turnover and also comprises 25% of the Group revenue.
As well as being a leading supplier of fresh milk, number one in butter, spreads and cream, Arla is the UK’s largest cheese manufacturer. It has also built the world’s largest fresh milk facility located at Aylesbury that later this year will become the first net zero carbon site of its kind. The UK business has a team of approximately 3,500 colleagues located at its dairies, creameries, distribution centres and head office.