Lurpak owner Arla Foods to spend nearly £180m to export mozzarella

Arla Foods, the maker of brands including Cravendale, Skyr and B.O.B milk, has announced plans to spend almost £180m to enable the business to export mozzarella across the world in the next three years.

The Leeds-headquartered company is to update its Devon-based creamery, Taw Valley, to include “state-of-the-art technology” and create more than 100 jobs in the region.

The Lurpak owner said it “believes in facilitating the increased demand for dairy products through ambitious exports, as this reflects the cooperative’s commitment to its farmer owners to return the best price for their milk”.

Bas Padberg, managing director of Arla Foods UK, said: “Today is a momentous occasion for our UK business, and we are so proud to be announcing this news to our farmer owners, colleagues and customers.

“As one of the biggest food companies in the UK, it is only natural that we look for further opportunities to grow so we can continue to return a fair price back to our farmer owners.

“We want to continue to increase the value of our farmer owners’ milk, which we believe can be achieved through exploring further export opportunities.”

The announcement comes after Arla Foods confirmed its UK revenue increased by 2.4 per cent to £2.6bn in 2023 following a 17.5 per cent growth in 2022.

The wider group’s total turnover for 2023 dipped slightly from €13.8bn to €13.7bn after being impacted by negative currency effects. Group net profits of €380m were at the bottom end of its target.

Arla Foods UK board director, and Arla farmer, Arthur Fearnall, added: “We are incredibly proud to see the UK business receive this significant investment.

“We’re excited to see how the plans at Taw Valley Creamery progress over the coming years, as we continue to work together to ensure all Arla farmer owners receive the best price for their milk.”

For 2024, the group said it expects its revenue to be between €13.2bn to €13.7bn. Arla said the reduction will be “primarily driven by reduced sales prices compared to the record highs in the beginning of 2023 and adverse currency effects”.

Peter Giortz-Carlsen, COO of Arla Foods Europe, said: “Our mozzarella business has seen double-digit growth over the past five years and we have strong relationships with key customers, particularly in global foodservice, and it’s from that very solid starting point we are announcing the investment today.

“But we also know that we have to work hard to maintain that position amongst the global leaders in the category and deliver on our strategy.

“This investment allows us to stay among the leaders within mozzarella, serve our customers even better and at the same time improve profitability for our farmer owners’ milk.”