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Value creation and sustainability

Highlighting Arla Foods – the largest dairy products producer in Scandinavia.

Photographs: Arla FB Page

Text: Mariano Anthony Davies

Arla Foods is the leading Danish multinational cooperative based in Viby, close to Aarhus, the second-largest city in Denmark and Scandinavia's largest dairy product producer. The Group was formed due to a merger between the Swedish dairy cooperative Arla and the Danish dairy company MD Foods in 2000.

Globally, the demand for dairy products is still growing, and at the same time, consumers are becoming more conscientious - expecting the food they eat to be healthy and affordable and be produced responsibly and sustainably.

The global dairy market is expected to grow by approximately 2% annually. In the Middle East, Africa and the Asia Pacific countries, a growing population drives increased demand for dairy nutrition. In Europe, where dairy products have been a more integral part of daily meals for many years, consumers now search for products that meet their needs within health and wellness, convenience and sustainable production.

Arla's farmers are committed to accelerating their reduction of greenhouse gas emissions towards a science-based 30% goal in 2030.

Over the last decades, Arla's farmer-owners have steadily worked towards sustainable farming, and today they are among the most climate-efficient dairy farmers in the world producing milk with an average of 1.15 kg CO2 per kilo of milk. Moreover, Arla's farmers are committed to accelerating their reduction of greenhouse gas emissions towards a science-based 30% goal in 2030. Across its operations, Arla has raised its target to a 63% reduction of greenhouse gas emissions by 2030, which it will deliver by accelerating its conversion to green electricity, fossil-free transportation fleets, making all packaging recyclable and having zero virgin plastics in branded packaging by 2030.

In recent years, Arla has strengthened its position as a market leader in Northern Europe, the UK and the Middle East with its global brands Arla®, Lurpak®, Castello®, Puck® and Starbucks®, which are strong and trusted household names. In the next five years, Arla will utilise its key competitive advantage and grow its branded business by 3-4% year on year by investing in category innovation and development, new production technologies and supply chain scale.

Arla will also invest in its global specialised, high-quality milk and whey ingredients business, Arla Foods Ingredients (AFI), to secure world-class innovation and collaboration and develop new solutions for its partners. The newly opened Innovation Centre in Western Jutland in Denmark aims to be the powerhouse to bring about change, develop future opportunities and introduce innovation efforts in AFI.

Arla has successfully built its export business to markets such as China, West Africa, the Rest of the World and Southeast Asia, where consumer demand for affordable dairy nutrition exceeds local production and supply. Arla will strengthen and expand its presence in these markets within dairy categories such as butter and cheese, organic, affordable dairy nutrition, and early life nutrition through its future strategy.

Furthermore, as urbanisation and higher average incomes change consumer food habits towards more convenience and dining out, Arla will fast track its e-commerce capability to support its customer online channels and invest in foodservice innovation and technologies within categories such as mozzarella.

Arla Foods is a global brand that employs close to 20.000 employees with annual revenue of well over EUR 10 billion. It is a listed company that prides itself on benchmarking standards for sustainable dairy production.

It is co-owned by 12,600 dairy farmers across Sweden, Denmark, Germany, Belgium, Luxembourg, and the UK within its present structure. However, this is expected to change soon, as a planned merger with the European Co-op Walhorn EGM Group will take its dairy farmer membership to 13,500 and bring in the first Dutch farmers if the merger is approved by national competition authorities.

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