February 10, 2022
(press release)
–
The European dairy cooperative delivered a solid performance throughout 2021 despite continued disruptions from the pandemic and renewed market volatility created by high inflation. The company delivered branded growth and returns to its farmer owners at the top end of expectations.
Arla’s farmer owners were again challenged throughout 2021 due to rising costs and additional requirements on their farms. Arla maintained a competitive pre-paid milk price that increased by 23% throughout the year. To support the investment levels that will be required by both Arla and its farmer owners to deliver on the company’s new five-year strategy, Future26, in 2021, the
“2021 was a tough year on farms as both our members and company were impacted by the continued effects of the pandemic and rapidly rising production costs. As such, I am proud that our company has been able to deliver a performance price that puts Arla among the market leaders in
Dairy products popular in both physical and virtual shopping baskets Retail sales in 2021 again reached the top end of expectations and Arla’s strategic brands delivered 4.5 per cent branded volume growth. Arla met the continued high consumer demand for in-home dairy products seeing Arla®, Castello® and Starbucks® exceeding their unprecedented branded growth in 2020 and Lurpak® gaining market shares in both
"Our strategic brands performed exceptionally well in 2021 as consumer appetite for high quality, natural nutritious dairy products remained strong around the world. Month on month, we managed sales and operations firmly to maintain product availability amidst fluctuating demand between in-home consumption, dining out and on-the-go as lockdowns eased and we returned to the workplace,” says
Growth in commercial segments Arla divides its business into 4 commercial segments. Arla Europe increased revenue to
Due to strong global demand and price increases, especially in the second half of 2021, Global Industry Sales increased revenue of
“2021 was another year defined by Covid-19 and although the global economy recovered much faster than expected, the volatility of the dairy market and high inflation put pressure on us and our farmer owners. With strong operational execution we successfully navigated the global challenges, strengthened our financial position, and grew our brands, while delivering savings across our supply chain,” says Arla Foods CFO,
Arla’s transformation and cost savings programme Calcium concluded in 2021 and delivered sustainable operational efficiencies across the organization, such as optimizing supply chain and in-sourcing marketing activities. Excluding inflation, the programme delivered
In 2021, Arla continued its ambitious sustainability journey and received approval from the Science Based Target Initiative for its new emissions reductions target of 63 per cent by 2030 for scope 1 and 2 as consistent with reductions required to keep global warming to 1.5 degrees. The existing 30 per cent target for scope 3 continues to meet the SBTi’s criteria for ambitious value chain goals in line with current best practice. Arla conducted the second round of Climate Checks on farm and stepped up its efforts to utilize farm data, advisory services and ongoing research and pilot farm trials to make more knowledge and solutions available for its farmer owners. Farmer owners that produce green electricity were also given the opportunity to help power their own cooperative by selling their Guarantees of Origins to Arla at a competitive price. From a 2015 baseline year, Arla has reduced its climate impact for scope 1 and 2 by 25 per cent. Arla’s farmer owners continue to be among the most climate efficient dairy farmers in the world, producing milk with an average of 1.15 kg CO2e per kilo of milk, keeping scope 3 on par at 7 per cent. Arla expects inflation and volatility to continue to impact the business and other sectors well into 2022. Commenting on the effects of this,
“The impact on consumer behavior of on-going market volatility and high inflation will be multifaceted and difficult to predict. It is likely that we will see a slowdown in our branded growth as the market resettles at a new level. Our cooperative stands on a strong foundation and as we have demonstrated in 2020 and 2021, we will continue our strong operational execution throughout our supply chain to meet any new demands and requirements in this uncertain environment.” Arla plans to invest
Group revenue outlook for 2022 is expected to be
Arla will publish its Annual report, ESG report and CSR report on
Disclaimer: The table has been omitted (The document can be viewed at https://www.arla.com/company/news-and-press/2022/pressrelease/arla-foods-growth-stays-on-track-despite-volatile-market-conditions/).
[Category: Agriculture, Dairy Farming, Fast Moving Consumer Goods (FMCG), New/ Renewable Energy, Food & Beverages, Financial Results] Source:
Arla’s performance price – which measures the value
Arla’s European Foodservice business captured the opportunities with strong delivery, key account management and agility as the hospitality sector re-opened in many countries and delivered 7.8 per cent branded volume growth.
Sustainability actions embedded across the value chain
Outlook for 2022
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