Arla Foods UK Delivers Strong Revenue Growth as H1 Results Reveal

 The announcement comes as the farmer-owned dairy company also announces a rise in the monthly milk price paid to farmers equating to an upward movement of 0.81 pence taking the UK standard litre price for conventional milk to 30.79 pence.This has contributed to a total increase of 42 per cent over the last 12 months.

Underpinning the UK growth was a 10 per cent increase in net revenue from its category-leading brands including Lurpak and Castello, with the Arla brand seeing particularly strong revenue growth of 15 per cent.This was driven by high performance in the yogurt category, with consumer-favourites Arla Protein and Arla skyr seeing revenue rises of 59 per cent and 82 per cent respectively.

These results reflect an exciting year so far for Arla in the UK where it has pursued its plan to invest £37.5m in sites during the year, launched Arla Organic Free Range Milk, extended its popular 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.

A combination of investment and innovation helped to ensure Arla branded products recorded the largest growth of any UK brand on a list of 100 compiled by The Grocer in March.

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

Peder Tuborgh, CEO, Arla Foods, 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 twelve 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, Managing Director, Arla Foods UK, said: "We've seen a significant increase in our milk price over the last 12 months – a welcome boost for our farmer owners – and our mission remains to secure the highest possible value for their milk, predominantly through the development of our branded portfolio.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."

Key growth highlights for the first half of 2017 include (all refer to net revenue unless otherwise stated):

• The UK market as a whole grew four per cent in the first half of 2017, driven by strong growth from each of Arla’s strategic brands;

• Arla’s focus on its three strategic brands has generated a 10 per cent increase.The Arla brand (+15 per cent) has been the stand-out performer, Castello (+six per cent) and Lurpak (+four per cent) continue to see growth;

• A strategic focus on the Lurpak brand, as well as a rebrand for Anchor butter and continued work with retailers on our own-label offering, saw revenues from the BSM category increase by 19 per cent;

• Driven once again by the success of the Castello brand, Arla saw overall growth in the cheese category of 10 per cent in the UK; and

• Arla’s entry into the yogurt category continued its success, with Arla Protein growing by 59 per cent and Arla skyr by 82 per cent.

You can view the 2017 half year results for Arla Foods amba by clicking here.

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