Dairy giant Arla saw revenue in its UK operation grow by 2.6% to £2.17bn last year and branded volumes increase 3.8% despite labour shortages and accelerating inflationary cost pressures dampening performance.
The company highlighted that its first-half performance was underpinned by continued heightened in-home consumption due to Covid restrictions, whilst the latter half of 2021 was boosted by the reopening of the foodservice sector.
After a record-breaking branded growth in 2020 due to the increase in home cooking during the lockdown phases of the pandemic, several of Arla’s key brands continued to see robust sales growth in 2021, including Arla Cravendale (+6.7%), Arla Skyr (+12.5%), and Arla Protein (+38.0%). The total Arla brand grew 9.6% across its full range of products.
Arla UK also grew its licensed sales of the Starbucks brand by more than 30%. However, the growth of brands like Lurpak and Anchor was affected by the butter and spreads category readjusting itself after the sales spike in 2020. Branded revenue sales of Lurpak decreased by 4.1% in 2021 (after 14.9% growth in 2020), while Anchor fell by 6.3% (after 9.7% growth in 2020).
“2021 was a tough year where we had to navigate through several external challenges to deliver much-needed returns for farmer-owners,” said Ash Amirahmadi, Managing Director for Arla Foods UK.
“Like many others in the industry we faced disruption from Covid and from labour shortages, but the biggest disruption has come from the unprecedented inflation, which is driving up the cost of operations across the supply chain. Against this challenging backdrop, we have performed well.”
