Arla unveils UK five-year growth strategy, calls for higher milk prices to help farmers offset costs  

UK – Arla Foods has announced a new five-year growth strategy for its UK business which will see the dairy processor explore the possibility of exporting products out of the UK for the first time in history.  

The major highlight of the growth strategy includes increased investments in sustainability, innovation and capacity. 

The dairy manufacturer said that it is planning long-term investments in its UK supply chain and key sales channels and brands. 

Arla UK owns and markets brands such as Arla Cravendale, Arla B.O.B, Arla Lactofree, Lurpak, Starbucks and Anchor. 

Over the next five years, the company is seeking to grow its UK business through innovation in categories like liquid milk, yogurts, butter and spreads, milk-based beverages and cheese.  

Over the next 5 years, Arla’s ambition is to grow the branded share of revenue from 38% to 45%. 

Arla Foods UK’s managing director, Ash Amirahmadi, said: “This growth and value-up ambition is about improving the value of dairy for our consumers through high-quality products that meet their demands”. 

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Additionally, as part of this initiative, the co-op hopes to recruit new farmers to meet the growing demand for milk with global demand for dairy expected to increase by 2% year on year over the next five years. 

Amirahmadi added: “While we are not recruiting as of now, we will also investigate opportunities to gradually open up for new members or contracted milk who share our farmers’ commitment to producing high-quality milk more sustainably”. 

Milk supplies under threat 

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Meanwhile, Arla is warning that milk supplies are under threat if farmers are not adequately compensated for their produce.  

The dairy giant noted that there has been a decrease in milk production due to rising costs and shortages are on the horizon if farmers are not paid more to cover for the higher cost of production. 

Raw material costs have increased in leaps and bounds, and farmers are struggling to cover their overhead costs.  

With cost increases as high as 36%, Arla warned that farmers need confidence to carry on producing while making hard decisions as a result of the economic climate. 

Arla Foods has 2,100 dairy farmers in the UK and 8,950 across Europe, making it the fifth biggest dairy company in the world and the largest supplier of fresh milk and cream in the UK.  

“As a cooperative, everything the business side of Arla does is to ensure our farmer owners have the best return for the milk they produce on-farm,” explains Amirahmadi. 

“We are acutely aware of the inflation challenges our farmers are facing and we have a laser sharp focus on recouping the increasing costs of production on their behalf.” 

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