Starbucks extends strategic partnership with Arla Foods to grow ready-to-drink across EMEA
After seven years of a successful business partnership, Starbucks has a new strategic licensing agreement with the farmer-owned dairy cooperative Arla Foods. The two companies have signed a long-term 21-year strategic agreement, giving Arla Foods license to continue to manufacture, distribute and market Starbucks premium milk-based ready-to-drink (RTD) coffee beverages for the EMEA region (Europe, Middle East and Africa.)
Duncan Moir, vice president channel development and foodservice, Starbucks EMEA, says: “The strength of our relationship with Arla Foods over the past seven years has seen our RTD business grow by an average of 40% per year across EMEA. This new licensing agreement signals our commitment to continue to work together to grow the business within the ready-to-drink sector, and we are proud to be working alongside Arla Foods.”
Commenting on the agreement, Hanne Søndergaard, Executive Vice President and CMO at Arla Foods, says: “We are proud to take another step in our partnership with Starbucks, bringing great tasting Starbucks ready-to-drink coffee beverages to consumers across Europe and the Middle East while adding value to our farmers’ milk. The partnership combines Arla’s extensive experience in manufacturing dairy beverages and our widespread distribution network with Starbucks unique coffee expertise. Consumers in the EMEA region have welcomed the great taste and premium nature of the beverages, and we remain committed to working closely with Starbucks on developing and growing the category in the future.”
Opportunities within milk-based beverages is an important focus area in Arla’s Good Growth 2020 strategy.
“It is our ambition to be a leading provider of milk-based beverages in Northern Europe, The Middle East, Asia and Northern Africa in 2020 and the new strategic licensing agreement makes the Starbucks partnership a vital part of delivering on this target and we believe that innovation is the key to future success. Our recent launches of new Starbucks Double Shot products are a great example of our joint commitment to innovation and to consumers,” Hanne Søndergaard says.
In 2010 Starbucks chose Arla Foods as its license partner to manufacture, distribute and market its milk-based ready-to-drink coffee beverages for supermarkets and convenience stores across the EMEA region. Arla expects to continue to further extend its reach to meet consumer needs. Since Starbucks chose Arla Foods as its licensed partner in 2010 the business has grown by an average of 40% each year.
By 2018 Arla launched Starbucks beverages in 38 countries across EMEA and expects to sell over 110 million units per year. The products are produced at Arla Foods’ sites in Esbjerg, Denmark and are made from milk from Arla Foods’ 11,200 farmer-owners and 100% arabica, ethically sourced coffee from Starbucks Coffee Company.
Arla Foods is a global dairy company and co-operative owned by 11,200 dairy farmers with circa 2,400 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.