Dairy giant Arla Foods has increased its marketing spend by 30% for 2010 in a bid to “reinforce” its position in the industry after a year when the company faced strong price competition.
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The company plans to build its three key brands – Lurpak, Castello and Arla – and increase its focus on value-added products following a year when cut-price products found favour with cash-strapped consumers.
The Arla board of directors approved the budget this week, which the firm hopes will boost 2010 turnover by 2-3% to around DKK47bn (US$9.16bn).
The group declined to name a figure for the new marketing budget but added that a need for increased capacity in the company’s supply chain has boosted its total budget to DKK1.84bn – twice that of 2009.
”Our focus is to continue to add more value to our milk and to continue to work towards achieving our growth target for 2015 of DKK75bn, and we’ll not achieve this without significantly expanding our capacity,” said Arla Foods’ CEO Peder Tuborgh.
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By GlobalDataInvestment in 2010, the firm said, will be behind its Lurpak, Castello and Arla brands. The concept ‘Closer to Nature’ will also be made more “visible” in 2010.
“A boost in marketing is definitely a key area for 2010, more specifically to build up our three global brands – Lurpak, Castello and also Arla, under which we have the concept ‘Closer to Nature’,” a spokesperson for Arla told just-food.
“One of the key tasks in 2010 will be to build up consumer awareness and to make sure that we front these brands as much as possible,” he added.
Arla said the investment behind the three brands will proceed “at full speed” and will help move more of its raw milk “from industrial to value-added” products.
“We foresee that the markets around the world are again moving in this direction, that consumers are ready for more value-added dairy products. As a company who delivers that, we are definitely going to up our efforts in that segment,” the spokesperson said.
Tuborgh, meanwhile, added that the objective for Arla is to achieve “the highest possible milk price” for its farmers in a “very price conscious market with substantial and rapid fluctuations”.
“During the past year, we have put considerable effort into the savings programme and have been dealing with the implications of the global economic situation. During 2010, we will again show our customers, and consumers, across the world what Arla stands for and what we can and want to achieve,” Tuborgh insisted.
