Arla Foods UK increases revenue to £2.6bn in 2023

The UK’s largest dairy co-operative, Arla Foods, increased its total revenue by 2.4% last year to £2.6bn, despite a challenging year for farmgate milk prices.

Profits at the wider group totalled €380m (£326m) in 2023, which represented 2.8% of the group’s total €13.7bn (£11.7bn) revenue.

A strong uplift and recovery during the second half of the year was welcomed by the processor, after a poorer first half, when profits were down by 46% compared with the first half of 2022.

See also: Arla to sell on-farm environmental gains to retailers

The unexpected improvement has resulted in a larger supplementary payment than anticipated of €270m (£231m) to Arla’s farmer members.

Bas Padberg, Arla Foods UK managing director, said: “As we saw in the first half of 2023, inflationary pressure continued to dominate; however, thanks to the strong execution by our farmer owners, employees and management, Arla has demonstrated its ability to adapt to challenging market conditions.”

Mr Padberg added: “Arla’s brand portfolio demonstrated its robustness in volatile conditions, and we made strong recovery in the second half of 2023 with a strategic branded volume growth.”

Outlook

The processor has recently noted an improvement in some of its branded sales, but expects that volatile market conditions will continue to play a role in the coming months and that the business will still feel some of the impact.

Group chief executive Peder Tuborgh said: “Uncertainty remains as growing unrest around the world and related economic slowdown can potentially impact our business negatively.

“However, Arla is in a robust financial position; global demand for dairy remains strong.

“Through our climate strategy, including the incentive model and the latest building block CSP, we will further accelerate our efforts to reduce our climate impact and reach our 2030 emission targets on scope 1, 2 and 3.

“We remain committed to delivering our Future26 ambitions and continuing our efforts to be a leading role model for sustainable dairy.”