European dairy cooperative Arla Foods has unveiled plans to grow revenue in the UK by nearly a third and make the firm a GBP400m (US$529m) household brand by 2020, in what it said is its “most ambitious business strategy to date”.
Arla said it will position itself as “the champion of British dairy” – and plans to invest more than GBP100m in promoting a series of “new healthier dairy products and campaigns, to encourage more nutritious eating habits and challenge some of the current myths about dairy”.
Arla’s UK managing director Tomas Pietrangeli, who joined the business earlier this year, said: “Our overall objective will be to add value to our milk and in turn allow us to return the best possible price to our farmer owners.”
He said the new strategy will involve much greater investment in the firm’s Arla and Lurpak brands, with the aim of seeing them in the top ten FMCG brands by 2020.
Arla also plans to grow its Castello cheese line to “become the best known premium cheddar and speciality cheese” –and a GBP40m brand – by 2020.
“We want Arla to be the name that people know, love and trust for dairy,” Pietrangeli said. “We have developed a strategy that delivers clear consumer benefits by re-engaging them in the most innovative, unexpected, responsible and efficient way.”
Commitments made under the new strategy include sourcing at least 10% of net revenue from new product development across Arla’s branded portfolio and investing a minimum of 25% of its marketing spend in digital.
Arla has also pledged to increase the availability of dairy products for breakfast, snacking on the go, convenience and hospitality “with an overall ambition to increase dairy consumption”. In addition, the dairy said it will extend its pipeline of healthier dairy products “with at least 30 new dairy concepts and 50 new range extensions”.
The dairy said it will publish a set of major health and nutrition commitments on Arla products and “the development of an enhanced foodservice offering, to become a supplier of choice outside the retail environment”.
Arla Foods UK revenue in 2015 stood at GBP2bn excluding commodity trading and the dairy aims to grow to GBP2.6bn by 2020.
Following the launch of the Arla brand to UK consumers last year, the company has already launched a wide range of innovative and healthier dairy products including Arla Best of Both skimmed milk, Arla skyr and Arla Protein into categories including drinks, yogurts and cottage cheese.
Earlier this month, Arla announced the launch of a new product in the UK – Arla Farmers Milk – to give consumers the opportunity “to pay a little extra on each bottle to help Arla farmers”. The firm said the launch was based on research that almost two thirds of consumers (63%) said they would pay more for dairy products if they knew the extra money would go to farmers.