Manufacturing & Supply Chain

2013 marked another year of unprecedented activity for Arla Foods’ UK business. Now the largest dairy company in the country with leading positions in milk, cheese, butter and spreads, the focus has been on maximising and extending these leads.

Revenue rose 22 per cent to £2.2 billion (DKr19.2 billion) primarily due to the Milk Link merger in 2012. The business completed this and its integration during the year is already seeing significant benefits. A key objective is now to grow its core cheddar and speciality cheese business and in 2013 Arla UK negotiated the biggest cheese contract in its history. From April 2014, the business will supply 30,000 tonnes of cheddar to its retail customer Asda, increasing cheese production by 50 per cent.

It also signed an exclusive partnership with Starbucks to supply 30 million litres of Cravendale to all its 700 stores in the UK and Northern Ireland on an annual basis. Arla’s cooperative status was cited as one of the key reasons for gaining the contract.

“The UK business is performing well. Arla UK has a compelling dairy offer and we are very much focused on growing our business and building on our No 1 position in fresh milk, butter and spreads as well as cheese. We focused on integrating the Milk Link business into Arla during 2013 and we are already seeing good commercial progress as a result of this,” says Peter Lauritzen, chief executive of Arla Foods UK.

A landmark decision was made last year when Arla Foods’ Board of Representatives voted for Arla Foods Milk Partnership (AFMP) farmers to become co-owners of of Arla Foods amba. This decision has meant that Arla has increased its British farmer owners to circa 2,800.

Arla Foods UK has commenced production at its new fresh milk dairy in Aylesbury, near London. Built to schedule and budget, it will be the world’s largest and most environmentally advanced dairy of its kind and a significant operational ramp-up is expected this year.