Arla Foods UK Makes Progress in a Challenging Market
2014 was a year of growth for Arla Foods UK, the UK’s number one dairy company, despite challenging global conditions. At Eur 2.8 billion (£2.3 billion) the UK continued to be the largest market for Arla Foods amba representing 27% of the group’s revenue.
In line with group performance a strong first half of the year was impacted in the second half by downward pressure on worldwide prices for commodity products, driven by increased global supply and weakening demand, predominantly as a result of the Russian trade embargo on dairy products and weakening growth in China. In response, Arla implemented a number of key measures to maximise revenue and minimise costs in order to continue delivering a leading milk price despite challenging times for its 13,500 owners, including its 3,000 British farmer owners.
Significant UK developments during the year included the official opening of the world’s largest fresh milk facility at Aylesbury, Buckinghamshire, the roll out of the biggest cheddar cheese contract in the company’s history and further measures to pave the way for the increased presence of the Arla brand in the UK market. Arla launched a number of new products during the year including Anchor Cheddar, Lurpak Cook’s Range, and Cocio Chocolate Milk. Against a backdrop of declining category sales, key Arla brands Lurpak, Anchor and Lactofree delivered growth and Cravendale was able to hold its share in an extremely competitive fresh milk category.
To support business growth and strengthen its position as the number one dairy company, last year Arla continued to invest significantly in the UK, not only at its state-of-the art dairy at Aylesbury but also in new technology across several sites, such as its packing operation at Oswestry, Shropshire, where it has created new packing facilities for Anchor Cheddar and own label cheese. These investments will enable the business to create new and exciting product ranges in 2015 particularly for the Arla brand where the business will focus on the inherent naturalness of dairy. This investment will continue in 2015 with almost £40 million being spent by Arla across its UK sites
