Arla takes advantage of strong global markets

With fat prices reaching the highest ever levels, Arla had the opportunity to concentrate on increasing the prices it received for products in 2017.

Chief financial officer Natalie Knight said: “What you see is a focus on us really taking advantage of increasing milk prices by driving up our sales price.

“In addition, what we had was volume growth.”

Brand

Its Arla brand grew by 18 per cent in the UK, Lurpak by 9 per cent and Anchor by 16 per cent.

Ms Knight said the Arla brand increase had been led by innovation with the Skyr, Protein and B.O.B products driving growth.

“We are really moving up and gaining shelf space and consumer mind space. With our B.O.B we had a real innovative milk product. We are really driving a strong reputation for innovation.”

She added overall costs had gone up, but put it down to the increased complexity of its products.

“Obviously, as long as we are able to deliver improved margins those are good decisions for us to make.”

Opportunity

The cooperative had also taken took an opportunistic approach to the trading side of its business, seizing the opportunity to sell while the markets were high.

Internationally, Arla highlighted the strong performance of its Puck brand in the Middle East, its Dano brand in sub-Saharan Africa and Baby and Me infant formula in China.

Ake Hantoft, chairman of the Arla foods amba board, said they were the biggest seller in the world of organic baby powder, both branded and as a supplier.

“Our market share in organic infant formula is around 80 per cent.”

Mr Hantoft added they were currently working in challenging markets with Brexit and a difficult German market.

“We are going to continue to do it because we have members in those countries.”

Looking forward to 2018, revenue was expected to be at a similar level between €10bn and €10.5bn.

Markets such as Middle East and North Africa, China, SouthEast Asia, Sub-Saharan Africa, and the US also remained a focus this year.