FDBusiness.com

New Cost-saving Programme to Transform Arla Foods

 Breaking News
  • Valeo Foods Acquires Tangerine Confectionery For £100 Million Valeo Foods Group, the acquisitive Irish and international food business, is reported to have purchased Tangerine Confectionery of the UK for £100 million (€112 million) from Blackstone Group. The deal adds popular UK confectionery brands such as Dip Dab, Fruit Salad and Blackjack to Valeo Foods Group’s growing portfolio, and will increase annual turnover to [...]...
  • Constellation Brands to Invest $4 Billion to Develop Canabis Market Constellation Brands, the North American and international alcoholic drinks group, is investing US$4 billion (C$5 billion) to increase its stake in Canopy Growth Corporation, a leading diversified cannabis company, to 38%. The significantly expanded strategic partnership will position Canopy Growth as the global leader in cannabis production, branding, intellectual property and retailing. As a result of [...]...
  • Brewing Up Authenticity, Vibrancy, and Sol With the hot summer months in full swing, beer lovers are reaching for their favorite cold brews to beat the heat. But as consumers venture down their grocer’s beer aisle, they are met with an onslaught of brands vying for attention in a sea of packaging. When MillerCoors recently relaunched the Mexican import brand Sol, they [...]...
  • Carlsberg Group Delivers Strong First Half Carlsberg Group has increased operating profit organically by 14.2% in the first half of 2018 with all three of its regions – Western Europe, Asia and Eastern Europe – delivering very solid performances. Organic net revenue growth was 5.1%. Reported operating profit rose by 6.0% to DKr4.373 billion (€586.5 million), impacted by negative currency factors [...]...
  • Levi Roots Caribbean Snack Pots Launched by Aimia Foods Aimia Foods is introducing to the market ‘Levi Roots Caribbean Snack Pots’, a range of On the Go Instant Snack Pots, that consumers simply add hot water to and stir for ease of preparation. Using natural, clean ingredients, the products have an authentic, home cooked taste and incorporate the Levi Roots Caribbean vibe, flavours and recipes. Michelle [...]...

New Cost-saving Programme to Transform Arla Foods

New Cost-saving Programme to Transform Arla Foods
April 25
11:58 2018

European dairy co-operative Arla Foods has launched an internal transformation programme called ‘Calcium’, which is set to deliver more than €400 million of savings by the end of 2020 through improved efficiency in all areas of the company. The programme looks to boost Arla’s performance to the benefit of its farmer-owners and further strengthen the company’s investment capability.

With Good Growth 2020 Arla has a strong strategy in place that has been growing the company’s business successfully and remains right for the trends that are driving the global food and dairy market.

Ongoing cost savings and efficiencies are a vital part of Good Growth 2020 strategy, and consequently Arla has initiated a three-year transformation programme called ‘Calcium’ which will change the company by creating significant efficiencies with two main purposes in mind:

* To improve returns to its farmer-owners and maintain a competitive milk price

* To reinvest into business areas that fuel growth.

The internal Calcium programme, which is already underway, will deliver a run-rate of at least €400 million of savings by the end of 2020, and the profit impact will build throughout the life of the programme.

While the transformational aspirations of Calcium have been carefully planned since the end of last year, the scope of the cost-savings ambition has been increased by Arla’s management in recent months in light of unique external challenges facing Arla as a result of the extent of the company’s exposure to the British pound and unfavourable developments in commodity markets.

“At Arla Foods we have always had a culture and strong track record of creating efficiencies and removing costs for the benefit of our farmer owners, customers and consumers, so in that sense nothing is new,” explains Peder Tuborgh, chief executive of Arla Foods.

“What is new, however, are two unexpected developments that have hit us, both of which are outside of our control. These are the currency impact of Brexit on our actual performance and the impact of the reversal in commodity prices on fat and protein on our relative performance against our international peers. These developments have negatively impacted our profitability, and as a responsible business we have to act to remove the impact of these new developments, and the action we are taking is a three-year transformation programme which cuts across our whole business and sets out to restore our profitability,” he adds.

Increasing returns to farmers

The Calcium programme will cover activities throughout Arla, covering production, products, procurement, promotional marketing and people. It aims at unleashing the full potential in Arla’s organisation by transforming ways of working, reducing bureaucracy and complexities, and cutting costs.

Of the total cost reduction of more than €400 million, Arla expects to return approximately €300 million to the farmers through the farmgate milk price with the additional savings being reinvested in the company’s Good Growth 2020 strategy to fuel further growth and improve profitability.

“Calcium has a high level of involvement amongst our employees and is galvanising and energising our people to deliver better returns for our farmers, and I am incredible proud of them,” says Peder Tuborgh.

Whilst the Calcium programme is already underway, it is too early to disclose publicly what the specific consequences will be within specific areas of the company, including what number of jobs that will be affected by the ongoing work. Arla expects to communicate openly about the process over the course of the programme.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 5, 2018Int'l Food Products and Processing Technologies Exhibition (WorldFood Istanbul)
  • September 12, 2018Packaging Innovations & Luxury Packaging London 2018
  • September 15, 2018iba
  • September 25, 2018PPMA Show 2018
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements