Arla Foods has identified the US as offering potential for growth through a combination of local production and food imports.
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“Our imported business has increased in an environment where imports from Europe have dropped 10% this year,” explained Andrew Simpson, president of Arla Foods. “Domestic production has enabled us to sell more imported products because we’re seen as relevant.”
Arla said that significant developments in its increased US business were acquisitions of US food companies. Following the acquisitions of White Clover Dairy in Wisconsin and the Danish Tholstrup Cheese, which owns a dairy in Michigan, earlier this year, sales have risen across the board, the company said. To date, imports of cheese and butter from Scandinavia are up by 5% while havarti alone accounts for an 8.5% increase.
“I believe that this is only the start. We have huge opportunities in front of us,” Simpson said.
During 2006, Arla’s US subsidiary has increased staffing levels from 20 to 150 people. At the start of the year, imports from Scandinavia accounted for 80% of Arla’s US volume. Since the acquisition of White Clover and Tholstrup Cheese, local production has more than doubled – from 20% to 45% of Arla’s total volume in the US. This Arla views as particularly significant, as US-produced products dominate the market.
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By GlobalData“Imported on its own is not sustainable. If we want to be the category captain and be regarded as the specialist, we must offer both,” Simpson emphasised. “Otherwise we end up being in the smaller part of the market, which makes our influence less. Therefore, the success of our imported business is really dependent on our ability to offer domestic products.”
