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Arla Foods reports "strong global growth"

The Arla Foods Group has announced what it describes as strong global growth for 2019, with a slight revenue increase in the UK, driven by continued growth in the company’s branded sales.

In 2019, Arla Foods UK marginally improved its total revenue to €2.28bn (up from €2.27bn in 2018), although a weakened exchange rate converts to £1.95bn (down from £2.01bn in 2018). The UK business accounts for 22% of last year’s €10.5bn revenue for the global dairy cooperative which is owned by farmer owners in seven different countries.

Highlights of the UK performance once again came from its branded products with its foodservice brand Arla Pro delivering a 45% volume driven revenue growth, Castello delivering 7.8%, Anchor 6.4% and Arla 6% branded revenue growth. This growth came predominantly across the cheese, yogurt, butter and spreads categories as well as the chilled milk-based beverages sold through the Starbucks brand license.

A positive year overall for the global business, supported by the UK performance from its brands, enabled Arla to maintain a good milk price for its 9,900 farmer owners, of which 2,400 are British farms, mostly family run.

Arla Foods UK Managing Director Ash Amirahmadi, said: “2019 marks another year of progress on our branded agenda as we continued to improve our branded sales within butter, spreads, cheese and yogurt categories. As peoples eating habits change, they want different things from dairy, and our brands deliver to this. However, we are not immune from the profitability challenges facing the British liquid milk category, which remains a significant part of our business. Performance in this category held back our overall UK results in 2019.”

Group revenue increased to €10.5 billion (compared to €10.4 billion in 2018 and €10.3 billion in 2017) driven mainly by the global brand portfolio which achieved a branded sales volume increase of 5.1%.

Global revenues of the Arla brand grew to €3,033 million compared to €2,875 million in 2018, driven by a series of successful launches across its Lactofree and organic ranges, the introduction of new flexitarian options as well as the rapid growth of Skyr in core European markets.

CFO of Arla Foods Group, Natalie Knight, said: “Arla’s global brands continue to be at the heart of our business and in 2019 we have clearly strengthened consumer trust in our brands. We delivered a range of popular dairy products that capitalized on increasing consumer demand for healthy and sustainable food choices, which helped us exceed our expectations for branded growth and outgrow competitors in 2019”.