Own brand yoghurt boosts Arla revenue

REVENUE at dairy company Arla rose in the first half of the year, boosted by sales of its own-brand yoghurts.

The bottling plant at Arla Foods, Stourton, Leeds.
The bottling plant at Arla Foods, Stourton, Leeds.

Arla Foods amba, which has a processing plant at Stourton, on the outskirts of Leeds, said the UK growth was underpinned by a 15 per cent rise in the Arla brand, driven by high performance in the yogurt category, with Arla Protein and Arla skyr seeing revenue rises of 59 per cent and 82 per cent respectively.

Its leading brands Lurpak and Castello saw a 10 per cent increase in net revenues.

The announcement came as the farmer-owned dairy company also revealed a rise in the monthly milk price paid to farmers, increasing the UK standard litre price for milk by 0.81p to 30.79p. This contributed to a rise of 42 per cent over the last 12 months.

Arla is currently investing £37.5m across its 13 UK production, packing and distribution sites as well its logistics operation.

The investment includes £5m in projects, such as a new packing facility, at the Stourton dairy, allowing it to increase production of own-label flavoured milk.

Meanwhile, the company also launched Arla Organic Free Range Milk, extended its Arla Protein range with the launch of Arla Protein Pouches and, in the milk aisle, enjoyed success in its grocery retailer own-label business, agreeing a new three-year exclusive contract with Morrisons, set to begin in March 2018.

Volume driven revenue has decreased in the UK by four-and-a-half per cent, the company said, as it took steps to drive its profitable growth, partnering with its customers to drive long term strategic plans and boost its product portfolio.

Chief executive Peder Tuborgh said: “As the global dairy market improved, we have responded to the sustained rally in global dairy prices while continually improving our product mix across key markets.

“As a result, we have increased the on-account milk price to the farmers who own our company by 42 per cent over the last 12 months. They needed that, as the past two-and-a half years have been tough for most dairy farmers around the world.

“Yet despite that tough backdrop, we have continued to invest, innovate and grow and that growth is making an important contribution not just to our farmer owners, but to the overall resilience of the industry.”

Tomas Pietrangeli, UK managing director, added: “ The strong growth of the Arla, Lurpak and Castello brands shows that we were right to focus on these as part of our UK Strategy 2020.

“This success is likely to be welcomed given the wider turbulence of the last six months.

“We are entering a defining time for British dairy as the UK finds its place outside the EU. Arla will continue to work in the coming months and years on generating greater returns for our farmer owners and being a champion of British dairy at a time when it needs one the most.”