Arla Foods Germany reports successful results
Despite the pandemic, the Arla Foods dairy group was last year able to continue its successful course of recent years on the German market.
“We were able to successfully implement our strategy in 2020 with a clear focus on high-quality business and brand growth. Due to the coronavirus situation, we have benefited from the increased demand in retail for products for cooking and baking at home. In these difficult times, established brands in particular convey stability and security, so that we were able to expand our branded business with all major retailers. And thanks to our extensive pandemic plans, we have maintained production in our dairy plants and milk collection from our 1,700 German farmers at all times. At the same time, we pushed our ambitious sustainability agenda on the farms, in our factories and in packaging. Here we are leading the way with our farmers and offer the most comprehensive sustainability program in the industry,” says Arla Germany boss Markus Mühleisen.
In the past year 90% of Arla farmers in Germany successfully participated in a new climate check programme in order to further reduce their greenhouse gas emissions in milk production. In addition, the revised ‘Arlagården quality program’ was successfully introduced, which places an even stronger focus on sustainability and animal welfare.
With the help of both programmes, milk production will be even more sustainable and fit for the future.
Arla Foods has also switched numerous packaging in Germany to more environmentally friendly variants, for example by using less plastic, more easily recyclable materials or by omitting a layer of packaging, such as with fresh Arla organic pasture milk.
In addition, since the beginning of 2020, Arla has been taking a stand against food waste in private households with its participation in the ‘Often good for longer’ campaign by the social impact company ‘Too Good To Go’. Over the course of the year, a large number of Arla products were printed with the label ‘Often longer good’ alongside the best before date. For example, it is printed on all Arla Skyr products as well as Arla Buko fresh cheeses and Arla organic fresh products. More products will follow shortly.
As in previous years, Arla Foods was able to increase its branded business in Germany in 2020. Sales of Arla brands increased 7.1% (based on volume).
Arla Finello grated cheese showed the strongest growth with a sales increase of 49.4%, followed by Arla Bio with 19.3%, Arla Kærgården with 15.2% and Arla Buko and Castello brand cheese, each with around 14% increase in sales.
After a delay in introducing new products in the first half of the year due to the coronavirus situation, strong innovations came onto the market again in the second half of the year, such as the new Arla organic natural yogurt made from 100% organic pasture milk with a ‘touch of taste’ in vanilla or lemon varieties. With this new product concept, Arla is further expanding its successful organic brand, it says.
The Arla Skyr portfolio has also been expanded: ‘The Creamy One’, offers consumers a new variant on the refrigerated shelf. This means that for a few months now there has been a very creamy Skyr with 5% fat on offer, which, in addition to classic Skyr consumers, appeals to other consumer groups with a focus on more enjoyment.
The regional Hansano brand was also able to increase its sales by 2.7% and launched an innovation in the second half of the year: the natural yogurt ‘Cremig & Pur’ with 10% fat from northern German pasture milk. It is the first yogurt on the market to carry the Pro Weideland seal.
The year 2020 has shown that the situation for farmers in Germany remains difficult, Arla notes. They are under increasing pressure due to increased production costs and the increasing demands for ecological, more sustainable production and more animal welfare.
“As a dairy cooperative owned by farmers, our job is to generate the highest possible value for our farmers’ milk. That is, why we work continuously on the best possible marketing of the milk of our cooperative members, for example through strong brands and product innovations while maintaining cost discipline and the highest possible efficiency. We want to consistently continue on this path”, says Markus Mühleisen.
At the same time the dairy group must work together with the other players on the German milk market on solutions in order to move from a market, which is mainly defined by price, to one, which focuses on quality and added value for the milk category. This is the only way to achieve a higher price level for milk overall, is the message from Arla Deutschland.
Looking at the current year, Markus Mühleisen states: “Due to the corona situation, 2021 will again be challenging for us. Nevertheless, we see numerous opportunities and want to further expand our branded and private label business. The topic of sustainability remains at the top of our agenda with new packaging initiatives as well as climate checks and measures on our farmers’ farms”.
