Dairy group Arla Foods has revealed a new strategy for its Swedish operations, including plans to restructure its operations and build brand awareness across the country.
A spokesperson told just-food that one of the first “cornerstones” of the restructuring in what is one of Arla’s key markets would be to increase the capacity of its Gothenburg dairy, through either modernising the existing plant or building a new site.
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Arla also plans to close fresh food terminals in Örebro and Linköping, with their activities moved to other existing dairies. “We want to connect the storage facilities with the main-flow of fresh milk,” the spokesperson said today (11 October). He added that Arla is not reducing capacity but “tying them in better”. Arla is also looking for further savings in its supply chain, as the amount of milk being produced is decreasing.
The restructuring comes amid comments from deputy chairman Knud Erik Jensen, who said last week that Arla would be open to discussing a merger in Sweden with rival dairy group Milko.
The Arla spokesperson said it was “too early to say” whether the restructuring would lead to job losses, explaining that the company is “in talks with unions”, although he added that the company would look to redeploy workers at other plants.
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On Wednesday, some 7,300 Arla farmers from Sweden and Denmark are set to meet to decide whether to keep more money within the co-operative to help it to achieve its restructuring plans. “We have a lot of support from our farmers right now,” he said.
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By GlobalDataAside from cost savings, Arla is also working on building its presence in parts of Sweden where it is not the “household brand”. The company is using a marketing programme that provides recipe ideas, competitions with top Swedish chefs and work to educate customers on food and help it to become more of a “social event”.
It is also looking to add value for consumers through the programme, which the spokesperson said the company hopes will “open consumers’ eyes to more Arla products”. The ambition is to increase the amount an average shopper spends on Arla products each year, which stands at SEK100 (US$15.02).
Last week, Arla revealed plans to streamline its sliced cheese production in Denmark and Sweden.
