Arla Foods is tapping into growing consumer concerns around sustainability and animal welfare by launching an initiative to boost sales of organic dairy products in the UK.
The UK’s largest dairy company has set a target to achieve more than 50% growth across its UK organic retail and foodservice business in the next five years. This will see the size of Arla’s annual organic dairy business in the UK grow from 180 to 270 million litres.
The move is being announced as the organic food category emerges as one of the strongest grocery sectors during the last 12 months, with sales growing by 9.4%, compared to just 5.6% for its non-organic counterparts.
Arla’s new Organic 2.0 standards set out the specific criteria its organic farmers must meet from January. This is being introduced to add more value to the organic dairy products and to give consumers a “relevant and forward-thinking offering in an increasingly competitive category”.
Arla is taking a clear stance in four key areas: climate impact, soil health, biodiversity and animal welfare, which it says resonate with organic consumers who express a particularly strong interest in how products are produced from an ethical point of view.
As part of the new Organic 2.0 standards, Arla’s organic farmers will now be required to convert to 100% green electricity from renewable sources, such as wind, solar, biogas and hydropower. The new standards also require that organic Arla farmers achieve a 30% reduction in CO2e emissions per KG of milk by 2028, two years before the cooperative’s wider 2030 target for conventional farms.
Arla highlighted that the UK continues to fall behind other European countries when it comes to the consumption of organic produce. For example, in Denmark, 12% of the national diet is made up of organic produce, compared to just 1.2% in the UK. This is less than in neighbouring France, where 6.1% of the national diet is organic and in the USA, where 5.8% is organic.
However, the organic dairy category in the UK grew by 4% last year, and Arla has seen double-digit growth in its UK organic dairy business year-on-year for the last five years.
Arla Foods’ UK Managing Director, Ash Amirahmadi, said: “We believe there is a big potential for organic dairy here in the UK as more and more British consumers are turning to organic food. Just like in other parts of Europe, we believe the trend of organic dairy will continue to grow in the UK, and with our new and improved organic standards we want to make it even more attractive for British consumers to choose organic when they are shopping in the dairy aisle.
“Across the board, Arla farmers have significantly increased work on farms around biodiversity, reducing carbon emissions and improving animal welfare. Historically, Organic farmers have often been the ones to establish new practices in these areas, and with these revised standards, they are once again forging new paths.”
NAM Implications:
- A 50% growth in the organic dairy business (2x non-organic) is worth watching…
- Meeting new standards by January could prove challenging for Arla’s organic farmers.
- But given organic progress in EU countries…
- …the key is to keep up.
