ARLA Foods UK revealed that it plans to carry out significant investment at two sites in Yorkshire as it reported a rise in full year revenues. Arla said the UK, which is its largest market, recorded retail and foods service revenue of £1.94bn last year, up from £1.79bn in 2016.
By: Greg Wright
Source: The Yorkshire Post
A spokesman said: “This growth, along with the company’s recent £72m 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 co-operative 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.”
Arla plans to invest £1.3m during 2018 at its site in Stourton, in Leeds, which employs 460 staff. Part of this investment will be spent on upgrading milk production lines at the site.
In recent years, Arla has invested more than £5.5m to improve the facilities at Stourton. Arla also employs 400 staff at its head office in Leeds. Arla plans to invest around £300,000 on general upgrades at its facility in Settle, North Yorkshire, which employs around 100 staff. Settle produces UHT (ultra-high temperature processing) milk for UK retailers.
It also provides products for export to China, Middle East, and Falklands. Tomas Pietrangeli, managing director, Arla Foods UK, commented: “Arla was both the fastest growing FMCG (fast-moving consumer goods) brand in the UK and the only leading dairy company delivering branded growth.”
Mr Pietrangeli added: “We also saw significant wins in both food service 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 strategy.”
“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”, Mr Pietrangeli said.
The brands delivering the greatest revenue growth in 2017 included Lurpak, which recorded a nine per cent rise and Anchor, which posted a 16 per cent increase.
The Arla brand grew by 18 per cent, the company said.
A spokesman said: “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 Happy Meal milk.
“As the UK’s number one butter brand Lurpak’s popularity in food service is also increasing, having seen revenue grow by 25 per cent in 2017.
Mr 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.”
More than 10 per cent of Arla’s branded net revenue has come from products launched in the last three years, the company said.
Arla Foods is a global dairy company and co-operative owned by 11,200 dairy farmers, including 2,500 from Britain.
It has production facilities in 11 countries and sales offices in a further 30.
Arla is the world’s fifth largest dairy company and the largest supplier of organic dairy products. It is also the UK’s largest cheese manufacturer.
It has built the world’s largest fresh milk facility, based in Aylesbury, which later this year is set to become the first “net zero” carbon site of its kind.
The UK business has a team of around 3,500 staff based in its dairies, creameries and distribution centres.