FDBusiness.com

Strong First Half By Arla Foods But Milk Prices Set to Fall

 Breaking News
  • Pernod Ricard to Acquire Super-premium Italian Gin Brand Pernod Ricard is acquiring Italian super-premium gin brand Malfy from Biggar & Leith for an undisclosed price. Malfy is a range of super-premium gins distilled by the Vergnano family in the Italian region of Moncalieri, and already present in several international markets such as the United States, United Kingdom and Germany. Each gin in the [...]...
  • Nestlé and Carrefour Give Consumers Access to Blockchain Platform Nestlé and Carrefour, the French retail group, have announced that they are giving consumers access to blockchain data for Mousline purée in France. This is the first time that Nestlé is sharing information on its products with consumers via a blockchain platform. Consumers can use their smartphone or other device to scan a QR code on [...]...
  • Plastics Action Alliance Sets Targets to Achieve Sustainable Reduction in Use of Plastic in Ireland Plastics Action Alliance, the recently formed group that comprises of 11 leading agricultural processing and food businesses in Ireland, has set out its key objectives. The industry leading group aims to significantly reducing the use of plastic packaging across its members’ operations. Formed at the end of 2018, the Plastics Action Alliance is a collaboration that [...]...
  • Carlsberg UK Gets Honest About Its Beer Carlsberg UK has launched its most ambitious and honest consumer facing campaign ever in a bid to drive reappraisal of its flagship beer brand. Expected to reach 97% of the UK, the £20 million campaign conceived in collaboration with agency partners Fold7, Clifford French and Initiative – trades on the equity of the brand’s renowned [...]...
  • Alternative Proteins Challenge Dairy Dominance The value of the sports nutrition market is set to grow by around 8% per year to reach over US$17 billion globally in 2021, according to Innova Market Insights’ forecasts. The mainstreaming of the market has led to a surge in interest in plant-based alternatives with the traditional dominance of whey and other dairy proteins [...]...

Strong First Half By Arla Foods But Milk Prices Set to Fall

Strong First Half By Arla Foods But Milk Prices Set to Fall
August 29
10:03 2014

Arla Foods increased revenue grew by 11% to DKr39.8 billion (Eur5.3 billion) in the first half of 2014 due to strong organic growth in core markets and global price increases. This meant that the farmer-owned dairy group delivered a record performance price of 3.30 DKr/kilo milk to farmer owners during the period compared to DKr2.87 per kilo milk in the first half of 2013. However, a significant negative development in the world market on price will force down the price paid to farmers for the remaining part of 2014.

Arla has lowered its expectations for the performance price for the full year. Expectations are that 2014 will still be a better year than 2013 which already was a record year.

Frederik Lotz, CFO of Arla Foods, says: “We are pleased to see that our strategy for creating more growth outside Europe is working and we have accelerated growth outside our European core markets. Our overall organic growth is satisfactory – we are however facing a difficult period and tough market challenges ahead.”

During the first half year Arla secured significant sales increases in target growth markets. The Middle East and Africa grew by 17%. Revenue was doubled in China and in Russia the market showed significant progress. However, Russia’s import ban on foods from countries that imposed sanctions on it will be a challenge going forward. Sales in Russia amount to about 1% of Arla’s total revenue.

Arla-owned brands such as Arla®, Lurpak® and Castello® have shown good growth. During the first half year of 2014 they grew 7% by revenue compared to the same period last year. Arla Foods’ ingredients business plays an important part in its strategy of being the leading global player in milk proteins and sales of value added ingredients such as functional milk proteins grew by 8% to DKr1.3 billion in first half of 2014 compared to same period last year. Arla Foods Ingredients’ sales are expected to accelerate significantly in the coming year.

Arla expects full year revenue of DKr79 billion, a net result of approximately DKr.3 billion and a performance price to its farmers above the 2013 level. This is below the previous year end expectations. High milk prices have boosted a higher milk production and the world market supply has been at an all time high.

Peder Tuborgh.

Arla Foods’ CEO, Peder Tuborgh, comments: “Arla has the right long-term strategy for meeting an increase in both raw milk supply and global demand for dairy products. Despite this, though, I believe that the market is looking at an 18-24 month period of unpredictability and consequently prices are under severe strain.”

Peder Tuborgh, continues: “The increased milk volumes that we expected to see after the abolition of the milk quota system at the beginning of 2015, are already coming through, not just from Arla farmers but for those across the EU who are taking the opportunity to grow their business. The extra milk is flowing into our production sites and putting us under positive pressure to deliver a long-term competitive milk price for growing volumes. The current challenges must be seen in the perspective of a bigger and promising long-term outlook for dairy companies. The world’s middle classes are growing, more consumers can afford dairy products, and they create a stable demand for healthy, nutritious and safe milk products.”

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • June 18, 2019Multimodal 2019
  • June 25, 2019BevExpo 2019
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber

Subscribe Here



Advertisements