Arla Foods: Lurpak Maker Faces Challenges with Rising Prices

Arla Foods, the company behind popular dairy brands such as Lurpak and Cravendale, has announced its plan to implement cuts of up to €110 million in 2025. This decision comes as the company grapples with rising prices and significant consumer uncertainty.

The Danish-Swedish multinational cooperative, which holds a significant presence in the UK, has projected its revenue for this year to fall between €14.5 billion and €15.3 billion. This forecast results from the elevated dairy prices that have characterized the market.

Despite the projected revenue, Arla Foods anticipates that the combination of high pricing and consumer uncertainty will adversely affect its branded volume-driven revenue growth, potentially reducing it to a scant one to two percent.

In its forward-looking statements, Arla emphasized its expectation to achieve economic efficiencies ranging from €90 million to €110 million in 2025.

The forecast comes on the heels of Arla reporting a group revenue of €13.8 billion for 2024, a modest uptick from €13.7 billion in 2023.

Within the UK market, the company saw branded revenue rise by £89 million. However, total revenue within the UK declined by 2.9% year-over-year.

Commenting on the scenario, Arla UK Managing Director Bas Padberg noted, “2024 was clearly a year of substantial branded growth, underscoring the strength of our portfolio and product array as consumers continue seeking high-quality, nutritious products.”

Padberg further emphasized the cooperative’s role in ensuring quality returns for its farmer-owners, ensuring that both farmers and consumers benefit from the business's comprehensive operations.

On a closing note, Padberg reiterated Arla’s commitment to providing quality dairy products and supporting consumer health through nutritious food options well into 2025.