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Arla discloses its Strategy 2020

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Arla discloses its Strategy 2020

Arla discloses its Strategy 2020
December 16
12:39 2015

Arla has more raw milk in its care than ever before and more expected over the next five years. This provides the business with opportunities for global growth to create value for its 12,700 farmer owners.

Unveiling its new Strategy 2020, Arla is setting out to grow its business in eight global dairy categories and six market regions around the world, as the company moves towards 2020 as one effective and unified cooperative.

Since 2007 Arla’s milk volume has grown from eight billion kilos to 14 billion kilos through mergers and, since April 2015, through organic growth in the milk production of Arla’s farmer owners as EU milk quotas no longer exist. It is anticipated that Arla’s farmers will grow their milk production by another 2.5 billion kilos by 2020, giving Arla more growth opportunities than ever before.

In the new group strategy Good Growth 2020, Arla’s board of directors and executive management is laying out the direction for Arla’s business in the coming five years to create maximum value for the increased volume of milk by excelling in eight dairy categories; by focusing on six regions; and by winning as one efficient Arla.

“We are launching a new strategy,” said CEO of Arla Foods, Peder Tuborgh. “However it is not a radical change of direction for Arla. Over the past years we have prepared for this moment by expanding our size and our competencies. In Strategy 2020 we will focus even more on organic growth and growing our brands through innovation that focuses on what consumers and customers want and need. This will help us create the most profitable growth with our farmer owners’ milk.”

Consumers around the world are looking for ways to make their everyday lives healthier, Arla believes. The company has now identified eight product categories that will be the central focus for its efforts to shape the dairy market by offering new products with natural ingredients, great taste and good nutrients that make it easier to live a healthy life.

“The global dairy industry has developed by a speed seldom seen before, with millions of consumers changing their daily habits and preferences,” said Tuborgh. “We have analysed consumer needs and trends across dairy categories worldwide and have matched this with our own biggest strengths. This has led us to pursue eight specific categories where we feel Arla can grow a leading position globally or regionally. Our strategic innovation and best resources will be poured into these categories.”

The eight prioritised product categories are:

  • Butter and spreads: Be global leader in butter and spreads with world class products made from natural ingredients
  • Spreadable Cheese:Lead in cream cheese made from natural ingredients and high quality processed cream cheese
  • Speciality Cheese: Be leading player in speciality cheese with creatively crafted products and concepts
  • Milk-based beverages:Shape market for nutritious milk-based beverages made from natural ingredients for people on the go
  • Yogurt: Innovate to build a strong ‘natural goodness’ position for yogurts
  • Milk and powder: Lead and shape the milk and powder market with nutritious value-added and cost-competitive products.
  • Mozzarella: Build global mozzarella position with high quality and cost-competitive products
  • Ingredients: Be the global leader in value-added whey

Arla said it will pursue growth in these eight categories primarily through its three global brands of Arla (natural goodness), Lurpak (good food deserves Lurpak) and Castello (creatively crafted).

Arla Foods is an international cooperative based in Århus, Denmark, and was formed in 2000 as the result of a merger between the Swedish dairy cooperative Arla and the Danish dairy company MD Foods. The company employs over 18,100 people and is the seventh largest dairy company in the world measured by turnover.

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