News

Arla Foods, Starbucks sign 21-year agreement

14 Jun 2018

After seven years of what is said to be a successful business partnership, Starbucks has a new strategic licensing agreement with the farmer-owned dairy cooperative Arla Foods.

After seven years of what is said to be a successful business partnership, Starbucks has a new strategic licensing agreement with the farmer-owned dairy cooperative Arla Foods. The two companies have signed a long-term 21-year strategic agreement, giving Arla Foods license to continue to manufacture, distribute and market Starbucks premium milk-based ready-to-drink (RTD) coffee beverages for the EMEA region (Europe, Middle East and Africa.)

Duncan Moir, vice president channel development and foodservice, Starbucks EMEA, said: “The strength of our relationship with Arla Foods over the past seven years has seen our RTD business grow by an average of 40% per year across EMEA. This new licensing agreement signals our commitment to continue to work together to grow the business within the ready-to-drink sector, and we are proud to be working alongside Arla Foods.”

Commenting on the agreement, Hanne Søndergaard, Executive Vice President and CMO at Arla Foods, said: “We are proud to take another step in our partnership with Starbucks, bringing great tasting Starbucks ready-to-drink coffee beverages to consumers across Europe and the Middle East while adding value to our farmers’ milk. The partnership combines Arla’s extensive experience in manufacturing dairy beverages and our widespread distribution network with Starbucks unique coffee expertise. Consumers in the EMEA region have welcomed the great taste and premium nature of the beverages, and we remain committed to working closely with Starbucks on developing and growing the category in the future.”

Opportunities within milk-based beverages is an important focus area in Arla’s Good Growth 2020 strategy, the company says.

“It is our ambition to be a leading provider of milk-based beverages in Northern Europe, The Middle East, Asia and Northern Africa in 2020 and the new strategic licensing agreement makes the Starbucks partnership a vital part of delivering on this target and we believe that innovation is the key to future success. Our recent launches of new Starbucks Double Shot products are a great example of our joint commitment to innovation and to consumers,” Søndergaard said.

In 2010 Starbucks chose Arla Foods as its license partner to manufacture, distribute and market its milk-based ready-to-drink coffee beverages for supermarkets and convenience stores across the EMEA region. Arla said it expects to continue to further extend its reach to meet consumer needs. Since Starbucks chose Arla Foods as its licensed partner in 2010 the business has grown by an average of 40% each year.

By 2018 Arla launched Starbucks beverages in 38 countries across EMEA and expects to sell over 110 million units per year. The products are produced at Arla Foods’ sites in Esbjerg, Denmark and are made from milk from Arla Foods’ 11,200 farmer-owners and 100% arabica, ethically sourced coffee from Starbucks Coffee Company.