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Arla Foods

Coordinates: 56°07′17″N 10°09′38″E / 56.12145°N 10.16054°E / 56.12145; 10.16054
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Arla Foods
Company typeCo-operative with limited liability (Danish: Andelsselskab med begrænset ansvar)
IndustryDairy
PredecessorArla Oy
MD Foods
Founded17 April 2000 (2000-04-17), 1881 (original Arla company), 1970 (MD Foods)
Headquarters
Viby
,
Denmark
Area served
Worldwide
Key people
Peder Tuborgh (CEO)
Jan Toft Nørgaard (Chairman)
Jonathan Evans (UK milk)[citation needed]
Revenue13.8 billion EUR (2022)[1]
400 million EUR (2022)[1]
Number of employees
20,907 (2022)[1]
SubsidiariesArla Foods Finland
Arla Foods UK
Websitearla.com

Arla Foods Group is a Danish-Swedish[2][3] multinational co-operative based in Viby, Denmark. It is the fifth biggest dairy company in the world and the largest producer of dairy products in Scandinavia and United Kingdom.[4][5]

Arla Foods was formed as the result of a merger between the Swedish dairy co-operative Arla and the Danish dairy company MD Foods on 17 April 2000. The name Arla derives from the same word as the English word 'early' and is an archaic Swedish term for 'early (in the morning)'.

History

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Origins

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In the 1880s, dairy farmers in Sweden and Denmark formed small co-operatives to invest in common dairy production facilities. The first dairy co-operative was established in Sweden at Stora Arla Gård in Västmanland in 1881 under the name of Arla Mejeriförening,[6] and the first Danish cooperative dairy was established in Hjedding, outside Ølgod, Southern Jutland in 1882.[7]

On 26 April 1915, dairy farmers in Stockholm and adjoining counties created Sweden's largest co-operative dairy organisation, Lantmännens mjölkförsäljningsförening (the Farmers' Milk Retail Association), which operated dairies as well as a chain of shops selling dairy products.[8]

In 1927, the company registered the name Mjölkcentralen (The Milk Centre, shortened MC) and from the 1950s a growing number of cooperative dairies in other parts of Sweden began joining MC.[9] In 1975, MC changed its name to Arla, a name previously used not only by Sweden's first co-operative dairy, but also by the largest dairy retailer in Gothenburg between 1909 and 1965.[6]

By the end of the 20th century, Arla had a 65% market share in Sweden.[10]

On 1 October 1970, Mejeriselskabet Danmark (MD) was established by four dairy companies and three individual dairies.[11] In 1988, the company changed name to MD Foods. In 1992, MD Foods and Denmark's second largest dairy company, Kløver Mælk, signed a financially binding co-operation agreement, and in 1999, the two companies merged to become MD Foods, gaining 90% of the Danish milk production.[11]

In April 2000, MD Foods merged with Swedish Arla and formed Arla Foods A.m.b.A with headquarters in Aarhus, Denmark,[10] and became Arla Foods as it is known today.

Current operations

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Arla Foods is the fourth largest dairy company in the world with respect to milk volume, seventh with respect to turnover.[12] At the start of 2022, 8,492 farmers across Denmark, Sweden, Germany, the UK, Belgium, the Netherlands and Luxembourg owned the cooperative.[1]

Arla Foods has many brands;[13] several minor brands and four strategic brands. The major and strategic brands are: Arla, Lurpak, Puck and Castello cheeses that are sold worldwide. The Arla Brand is both a co-operative brand and a brand across all product categories.[14] The Lurpak brand of butter and spreads is owned by the Danish Dairy Board, Puck is Arla brand equivalent in the MENA region, and Castello is a cheese brand including blue cheese and yellow cheeses.[15][16]

Next to the four major brands, Arla also has a long-term strategic partnership with Starbucks to manufacture, distribute and market their RTD (ready to drink) coffee products for the EMEA region (Europe, the Middle East and Africa).[17]

In 2011 Arla Foods incorporated Arla Foods Ingredients (AFI), a former division, as an independent subsidiary. The company develops and manufactures milk based ingredients, primarily functional and nutritional milk proteins, bioactive phospholipids, minerals, permeate and lactose for the food industry.

The head office is located in Denmark. Arla Foods Ingredients has one wholly owned production plant in Denmark, with joint venture production at facilities in Argentina and Germany. In March 2011, Arla Foods and DMK formed the joint venture company ArNoCo GmbH & Co. KG, to produce whey proteins for the food industry. In February 2018, Arla Foods announced its plans to invest £70 million in the UK, as part of its strategy to secure long-term opportunities for its farmers across Europe.[18] In October 2019, Arla Foods has invested an estimated €50 million (US$55 million) in a cheese production site in Bahrain. By 2025, Arla expects to increase annual production in Bahrain to more than 100,000 tons under its Puck, Arla, Dano, Kraft and Private Label brands.[19]

2006 boycott

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Main article: Jyllands-Posten Muhammad cartoons controversy
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Arla's sales were seriously affected by a two-month long boycott of Danish products in the Middle East in 2006.[20] Anger among Muslims over satirical cartoons of Prophet Muhammad published in Denmark was the initial cause.

When the Danish government refused to condemn the cartoons or meet with eleven ambassadors from Muslim nations, a boycott of Danish products was organised, starting in Saudi Arabia and spreading across the Middle East. The Middle East is Arla's largest market outside of Europe.

On 3 February 2006, the company said that sales in the Middle East dried up completely, costing the company US$2 million a day.[21] Soon after the boycott hit Arla's sales, the Danish government met with Muslim ambassadors and the newspaper issued an apology. Despite this, the boycott continued unabated for two months.

In March 2006, Arla took out full page advertising in Saudi Arabia, apologising for the cartoons and indicating Arla's respect for Islam in the country. This caused controversy in Denmark, where women's organisations and some politicians criticised Arla, and called on Danish women to boycott Arla's products in Denmark. In April 2006, the company said that its products were being placed back in shops in the Middle East.[citation needed]

Before the boycott, it supplied 50,000 shops in the area. It announced that many of its largest clients in Saudi Arabia would start selling its butter and cheese on 8 April 2006. At that time, Arla began sponsoring humanitarian causes in the Middle East to foster good public relations with the region.[22]

Don’t Cancel the Cow campaign

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In 2022, Arla launched an advertising campaign called Don't Cancel the Cow claiming the rise of veganism among young people was the reason the dairy industry's future is uncertain.[23] The campaign targets young people over their concern about the environmental impact of cows milk.[24]

International distribution

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Indonesia

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In Indonesia, Arla is distributed by Indofood, Pandurasa Kharisma, & Prambanan Kencana as joint venture and import company.[25]

Malaysia

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In Malaysia, Arla is distributed by Lamsoon[26] who also distribute Lion Corporation products.

Bangladesh

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In Bangladesh, Arla sells its milk powder and milk products under Dano brand. for over 40 years, Dano is the most popular milk brand in Bangladesh.

China

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In China, Arla is distributed by Mengniu.[27]

Japan

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In Japan, Arla was once distributed by Morinaga Milk Industry. However, it is now distributed by various small companies.[28]

Korea

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In Korea, Arla is distributed by Maeil Dairies.[29]

Egypt

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In Egypt, Arla is distributed by Juhayna.[30]

West Africa

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In West Africa, Arla is distributed by Tolaram Group who also distribute Indomie, Nestle, and Colgate.[31]

United States

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In US, Arla is distributed by Dairy Farmers of America who also distribute Fromageries Bel.[32][33]

Germany

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In Germany, Arla is distributed by DMK Group.[34]

United Kingdom

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In the United Kingdom, Arla is distributed by Volac who also distribute Nestle, First Milk and Wilmar.[35][36]

See also

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References

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  1. ^ a b c d Arla Foods (2023), "Annual Report 2022" (PDF), Arla Foods, retrieved 4 September 2023
  2. ^ "Arla – a household name in the Nordic countries". www.arla.com. Retrieved 23 March 2022.
  3. ^ Box, Marcus; Lönnborg, Mikael; Rytkönen, Paulina (2021), Both a Co-operative and Multinational – International Market Strategies of Danish-Swedish Arla MD, Södertörns högskola, pp. 323–344, retrieved 23 March 2022
  4. ^ "Tesco vows to rein in prices as profits treble". BBC News. 13 April 2022. Retrieved 13 April 2022. However, the UK's largest dairy Arla recently warned that with cost increases of some 36%, farmers faced tough cost challenges.
  5. ^ "Dairy giant Arla warns of supply issues unless farmers paid more". BBC News. 25 March 2022. Retrieved 25 October 2023.
  6. ^ a b Qviberg, Lisa. "Arla: ett namn med anor". Arla (in Swedish). Retrieved 17 January 2018.
  7. ^ Jarka Chloupková. "European Cooperative Movement – Background and common denominators" (PDF). Department of Economics and Natural Resources, Unit of Economics, The Royal Veterinary and Agricultural University. Archived from the original (PDF) on 27 January 2018. Retrieved 21 August 2017.
  8. ^ Qviberg, Lisa. "Från mjölkbolaget till mjölkcentralen". Arla (in Swedish). Retrieved 17 January 2018.
  9. ^ Leidenborg, David. "Arlas mjölkpaket: Arlas historia". Arla (in Swedish). Retrieved 17 January 2018.
  10. ^ a b "MD Foods/Arla Merger Speeds Dairy Globalisation". Just Food. 31 January 2000. Archived from the original on 1 August 2018. Retrieved 21 August 2017.
  11. ^ a b Christensen, Jens (8 October 2012). "Fra andelsmejerier til Arla Foods 1882-2012". Danmarks Historien (in Danish). Aarhus University, Institut for Kultur og Samfund. Retrieved 17 July 2017.
  12. ^ Groholt-Pedersen, Jacob (22 February 2017), "Arla CEO says rising milk supply to keep prices in check", Reuters, retrieved 20 March 2017
  13. ^ "Arla Brands". Arla.
  14. ^ Brandt, Charlotte; Carugati, Andrea (2012). "Deliberately by design, or? Enterprise Architecture transformation at Arla Foods". Advances in Enterprise Information Systems II. pp. 91–104. doi:10.1201/b12295-12 (inactive 11 November 2024). ISBN 978-0-415-63131-0.{{cite book}}: CS1 maint: DOI inactive as of November 2024 (link)
  15. ^ "Arla genom åren" (in Swedish). Arla Foods. Archived from the original on 2 July 2007. Retrieved 19 July 2007.
  16. ^ "Historien bakom namnet Arla Foods" (in Swedish). Arla Foods. Archived from the original on 2 July 2007. Retrieved 19 July 2007.
  17. ^ "Starbucks extends strategic partnership with Arla Foods to grow ready-to-drink across EMEA". Arla. 7 June 2018.
  18. ^ Williamson, Johnny (1 February 2018). "Arla to pour £72m in UK diary sites in 2018". The Manufacturer. Retrieved 24 February 2020.
  19. ^ Ferrer, Benjamin (28 October 2019). "Arla inaugurates US$55m cheese production site in Bahrain as dairy demand jumps in MENA region". foodingredientsfirst.com.
  20. ^ Abosag, Ibrahim (11 May 2010). "Dancing with macro-boycotters: the case of Arla Foods" (PDF). Marketing Intelligence & Planning. 28 (3): 365–373. doi:10.1108/02634501011041471. ISSN 0263-4503.
  21. ^ "Arla cheesed off over Middle East boycott". The Daily Telegraph. London. 4 February 2006. Archived from the original on 27 April 2006.
  22. ^ "Arla returns to the Middle East". BBC News. 7 April 2006.
  23. ^ Jani-Friend, Isabelle (29 June 2022). "Has vegan culture cancelled the cow?". The Big Issue. Retrieved 4 July 2022.
  24. ^ Rees, Tom (25 April 2022). "Vegan 'cancel culture' hits dairy farmers". The Telegraph. ISSN 0307-1235. Retrieved 17 August 2022.
  25. ^ "Gandeng Produsen Denmark, Indofood Perkuat Bisnis Susu". Agrifood (in Indonesian). 26 December 2017.
  26. ^ "Arla Foods". Lam Soon. 1 November 2016.
  27. ^ "Arla's Investment In Chinese Dairy Delivers Huge Gains". Scandasia. 28 March 2014.
  28. ^ Cotterill, Ronald W. (13 March 2019). Competitive Strategy Analysis In The Food System. CRC Press. ISBN 9780429723087.
  29. ^ "Brands". Maeil.
  30. ^ "BRICs and beyond: Why Arla's Egyptian JV with Juhayna is shrewd". Just Food. 28 May 2015.
  31. ^ "Arla Signs Construction Agreement With Tolaram On Kaduna Commercial dairy Farm". Premium Times. 7 April 2006.
  32. ^ "New Cheddar Cheese Joint Venture With Dairy Farmers Of America". Arla. 23 March 2016.
  33. ^ "Bel Brands USA Partners With DFA On Sustainable Milk Cooling Program". Dairy Reporter. 5 August 2021.
  34. ^ "DMK Group & Arla Foods Sign Mozzarella Contract Manufacturing Agreement". Arla. 20 December 2017.
  35. ^ "Partnerships". Volac.
  36. ^ "Our Partners". First Milk.
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56°07′17″N 10°09′38″E / 56.12145°N 10.16054°E / 56.12145; 10.16054

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