While the co-op has no plans to invest in milk plants, chief executive Peder Tuborgh says it will be pushing Lurpak butter and Castello cheese brands, which have seen good growth in the two countries.
For the first time, an on-air campaign will be launched, Tuborgh told Rural News, last week, at the World Dairy Summit in Yokohama, Japan.
“We have for quite a few years through our partners and distributors seen Lurpak butter and Castello cheese markets grow fantastically,” he says. “It is something we are keen to focus more on, but I cannot go into details at this stage.”
But Tuborgh ruled out investments in stainless steel. “No investment in processing – there are others in Australia and New Zealand who are better in doing that. We will invest and expand in the marketplace, in logistics and distribution network.”
Speaking at the summit earlier, Tuborgh noted a shift in Arla’s investment strategy – creating growth outside the EU.
While it is developing core markets within EU, for the first time more than 50% of the co-op’s capital investment is either going outside the bloc or in facilities within EU but targeting foreign markets. “I can tell you crossing the 50% mark was unthinkable five years ago.”
Arla, owned by 12,000 farmers in Denmark, Sweden, Germany, Luxembourg, Belgium and the UK, processes 12.5 billion kg of milk from its farmer owners. It also sources contract milk.
Having a footprint outside EU is important to the co-op, Tuborgh says. “It’s important to be present outside of the EU and growing rapidly outside is one of core strategies.
“The reason is population growth is happening outside the EU, the US and Oceania where everything is standing still, demand-wise.”
Tuborgh noted that a growing middle class in Asia, Middle East and Africa were driving growth.
But he cautioned that growing outside Europe had challenges. Dairy companies have to adapt to changing trends and new consumer tastes.
Arla, with a proud 100-year tradition of developing dairy knowledge, cannot dump its products on consumers outside EU. “I must admit these new consumer trends are not the same as we are seeing inside Europe,” Tuborgh says.
• Sudesh Kissun attended the 2013 World Dairy Summit in Yokohama, Japan with the assistance of the Asia New Zealand Foundation.
