Arla Foods has hailed a continuation of the “positive momentum” it saw towards the end of last year after posting “robust” global half-year results.
The dairy co-op registered total global revenues of €6.6bn in the first half of 2024, according to its half-year update, published today.
This represented a 7% fall on the same period in 2023, which was heavily influenced by inflation. However, Arla stressed the group had performed strongly, driven by an encouraging performance for its global strategic brands – which saw volume-driven revenue growth of 4.1% in the first half of 2024 compared with a decrease of 6.0% in the first half of 2023.
The growth was spearheaded by the Lurpak, Puck and Arla brands, which respectively grew volumes by 7.9%, 4.4% and 3.8%.
Arla’s UK brand portfolio, which saw total volume growth of 11% and branded revenues increasing by 5.4%, also performed strongly.
The standout performers were Lurpak, Arla Protein and foodservice brand Arla Pro, the dairy giant said, citing the latter’s performance in particular: total foodservice volume growth was up over 13% and branded revenue rose 5.6%, driven by new business wins.
Total UK net revenue saw a decline by 11% to £1.2bn vs the same period last year, as a result of falling commodity and commercial prices.
But against the backdrop of strong volume-driven revenue growth, purely driven by incremental volume increases, rather than price hikes, Arla UK MD Bas Padberg said he was pleased with the supplier’s “very impressive” underlying performance.
“Following the high levels of inflation that we saw back in 2023, Arla has continuously reinvested back into our brands, to deliver value for our shoppers and ensure the necessary growth needed to return the highest possible milk price to our farmer owners,” Padberg said.
“This, combined with increased consumer buying power in the first half of the year, has led to a strong performance across our branded range.”
While Arla expected consumer confidence to remain into the second half of the year, trading conditions would be more challenging than in recent months “as commodity markets rise again and we balance reduced global supply with the increasing demand for dairy”, he added.
But he stressed Arla’s £300m investment in its UK manufacturing estate, announced earlier this year, including a big push into mozzarella production at its Taw Valley creamery, meant the business was “futureproofed”.
Based on its positive results globally, the dairy co-op has increased its milk price by 5 euro cents/kg milk compared with the second half of 2023, and said it was also possible to pay a half-year supplementary payment to farmer owners of 1 euro cents/kg milk based on the half-year volumes.
No comments yet