Arla Foods has forecast a potential uplift in branded sales in 2025 with expectations of improving growth in the second half of the year.

The dairy giant generated half-year revenue €7.5bn ($8.75bn), up from €6.6bn in the opening six months of 2024.

Arla saw a 1.5% decline in its branded revenue compared to the first half of last year, as consumers became “more cautious in response to higher prices and economic uncertainty”.

The firm cited geopolitical uncertainty and “higher dairy commodity prices” which created a “more challenging market environment in the first half of 2025”.

Nonetheless, the Lurpak owner has issued a new forecast for its annual growth in branded sales this year.

In February, the co-op had forecast a decline of 1-2%. Arla now sees this metric landing in a range of 0.5% down to 0.5% up. It said it sees "an improvement for branded volume-driven revenue growth in the second half of 2025".

Arla has narrowed its forecast for annual revenue to a range of €14.7bn to €15.2bn. It had forecast revenue would be €14.5bn to €15.3bn this year.

CFO Torben Dahl Nyholm said: “Although we saw a slight decline in branded sales volumes in the first half of the year, we expect the situation to improve as we move into the second half.

“With continued focus and the strength of our brands, we are well positioned to respond to changing market conditions, and we anticipate that branded growth will be close to neutral for the full year.”

In April, Arla announced a deal to merge with German dairy cooperative DMK Group, forming an entity of more than 12,000 farmers across seven countries. The plan was approved by the boards of the two companies in June.

Arla said today the transaction will proceed to regulatory review, which is expected to conclude in the first half of 2026.