A range of branded Atkins milk, yogurts and sauces will go on sale in supermarkets in the new year and Arla is also looking to develop a range of Atkins cheeses.
The Atkins Diet, which promotes cutting out stodgy carbohydrates such as pasta, bread and potatoes, has found huge success in the US and Britain following endorsements from celebrities such as Friends actress Jennifer Aniston.
Leeds-based Arla said yesterday the Atkins diet had proved to be more than a fad and it has high hopes for the new range which removes lactose through filtration and enzyme activity. Lactose, or milk sugar, is the main carbohydrate in dairy products. At a time when the supermarkets are squeezing every penny they can out of dairies and farmers on standard milk, Arla is looking to develop niche areas that will provide greater profits.
It has already extended butter brands such as Lurpak and Anchor into Spreadable and Lighter Spreadable versions, which are seeing double figure sales growth. It is now keen to do a similar thing with milk.
The Atkins range will stand alongside the group's Cravendale milk brand, which uses special filtration methods to purify the milk which improves the taste and makes it last longer. The brand saw a 33 per cent increase in year on year growth.
Arla chief executive Neil Davidson said the group is investing a further £20m in its new plant in Stourton, Leeds, to expand the Cravendale range.
Arla predicted yesterday that milk sales to the leading supermarkets will remain highly competitive.
Arla lost its milk contract with J Sainsbury in August, but it won Leeds-based Asda's entire milk supply contract earlier in the year which more than offsets the Sainsbury loss.
Asda went back to its Yorkshire dairy farming roots by choosing Arla, which was once part of the same company, Associated Dairies.
About 250 of Arla's nationwide network of 1,300 milk-producer farmers are in Yorkshire including Wesley Abbey of Easingwold, near York.
Mr Davidson was speaking yesterday as the group announced preliminary results to September 30.
The figures cannot be compared as this is the first year since the merger with Express Dairies last October.
However, analysts said the maiden results were in line with expectations. Underlying pre-tax profits came in at £42m for the 12 months to September 30.
The group said yesterday that it was nearing the end of the job cutting and factory closure programme that followed the merger.
Some 800 jobs have gone and a further 700 employees will leave by the middle of next year.
The final disposal will be the wholesale cheese business HT Webb in Gravesend which will be sold or closed early next year.
The merger of the two companies is now nearly complete and the synergy benefits from the deal – some £20m a year – are expected to come through a year ahead of plan.
ros.snowdon@ypn.co.uk