Arla Foods is an international agricultural cooperative with headquarters in Viby, Denmark. It is
and was created as the result of a merger between the Swedish dairy cooperative Arla and the Danish dairy company MD Foods in 2000. Agricultural cooperatives were developed as a way to alleviate deficiencies in the structure of farms when operating as small independent entities; they are both associations of individual people and economic enterprises. They ensure efficiency in the whole supply chain by pooling resources and addressing each stage of the production and manufacturing process.
Business segments
Currently, Arla Foods employs some
21 thousand people worldwide and is divided into three main business segments: Arla Europe, Arla International and Arla Foods Ingredients. Arla Europe serves the European market, while Arla International serves other regions around the world. The
Arla Foods Ingredients division produces functional milk proteins, which are used in a range of bakery and dairy products, as well as whey-derived bioactive ingredients with uses in infant and sports nutrition and functional foods.
Brand and product growth
Arla Foods consists of three major strategic brands: Arla, Lurpak, and Castello. The Arla brand as a whole supplies a range of dairy products, including a recently introduced lactose-free range for those with dietary sensitivities, while Lurpak is a butter product and Castello covers various cheese products. The company has experienced year on year increases in
global net profit, along with fluctuating
net profit margins. The amount of milk processed by
Arla Foods worldwide has also experienced considerable increases in volume since 2010, resulting in the capacity for the company to continue expanding their brand and products globally. Arla Foods reached a
global net revenue of about 13.7 billion euros in 2023.
Fluctuating dairy prices
Milk prices have had a significant effect on dairy cooperatives around the world, particularly in Europe, as overproduction of milk has resulted in both unstable and
lower farm-gate prices for raw milk. Compared to private dairies, cooperatives are unable to compensate for such variability and can threaten farmers' livelihoods by being unable to supply with them with a secure and sustainable income, given such a volatile market.
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