DAIRY GIANT Arla has revealed its growth ambitions in the UK for the next five years – and hinted that it might soon be recruiting more milk producers.

For the first time, as part of its expansion strategy, Arla is to explore export opportunities out of the UK, raising the prospect that it will need more milk, from both existing and potentially new farmer owners in the UK.

As previously announced, Arla also targets more than 50% growth across its UK organic retail and foodservice business in the next five years.

“The milk that goes into products like Cravendale, B.O.B and Lactofree dairy products comes from Arla’s farms, where our owners are already among the most climate efficient dairy farmers in the world, producing milk with around 50% fewer emissions than the global average," said UK MD, Ash Amirahmadi. "But with an ambition to reduce on-farm emissions by an additional 30% by 2030, big investments are still needed on farms.

"Therefore, in the UK, our Future26 strategy will ruthlessly focus on creating the maximum value of all our milk that enables dairy farmers to invest more in on-farm long-term sustainability measures.”

Arla stressed that liquid milk would be its 'flagship' category in developing sustainability from farm to store – and that would mean improving profitability so that its farmers could cover their increased costs and invest in sustainability.

“For a number of years, we have indicated that the lack of profit in own label liquid milk in the UK is not sustainable," said Mr Amirahmadi. "It delivers little to no profitability for farmers and is a category of the UK dairy sector where the market is failing to deliver value for farmers. It is unsustainable. This is made even more critical by the fact that the costs of producing milk is increasing like never before and our farmers are continuing to experience significant inflation."

One solution to this domestic price stagnation might be to look outwards to overseas markets where high quality dairy might be more valued. As part of its Future26 strategy, Arla plans to explore opportunities to export raw milk from the UK to supply its global supply chain, and has begun trials to move milk to its European processing sites.

Executive vice president of Arla Foods Europe, Peter Giørtz-Carlsen, added: “With farmer owners and production sites across Europe we have the opportunity to use the scale of our cooperative to create the most value from the milk produced on our farms. Demand for Arla dairy products is growing in Southeast Asia, the Middle East and West Africa, and so it is natural for us to explore how we can best utilise our European milk pool to meet that demand. This includes the milk from our British farmer owners.”

Such is Arla's faith in this strategy, it is now contemplating recruiting new farmers to meet increasing milk demand: “To meet these future demands and maintain the cost effectiveness of our supply chain, we will welcome and continue to support members who wish to help us grow our milk pool by increasing their supply and growing their businesses sustainably," said Mr Amirahmadi. "While we are not recruiting as of now, we will also investigate opportunities to gradually open up for new members or contracted milk who share our farmers’ commitment to producing high quality milk more sustainably."

Continuing its stated intention to become a household name, Arla Foods is also planning long-term investments in its leading brands, like Arla Cravendale, Arla B.O.B, Arla Lactofree, Lurpak, Starbucks and Anchor, with an ambition to grow the branded share of the revenue to 45% from 38%.

Over the next five years, the Arla Group will increase its investments by more than 40% to over €4 billion in sustainability actions, product innovations, capacity expansions and digitalization. As the single biggest market in Arla’s global business, this will also mean increased investments for Arla’s UK operations, with a focus on efficient and sustainable production and opportunities in added-value milks, foodservice and ecommerce.