Arla increases focus on beverage market, eying up opportunity for milk-based drinks

By Rachel Arthur contact

- Last updated on GMT

Dairy beverages offer a healthier alternative to soda, says Arla. Pic: istock/Lilechka75
Dairy beverages offer a healthier alternative to soda, says Arla. Pic: istock/Lilechka75

Related tags: Kefir, Coffee

Global dairy company Arla has announced it will triple its business in the beverage market, saying it can challenge the soft drinks market with healthier milk-based alternatives.

It wants to see revenue of milk-based beverages triple from €230m ($256m) in 2015.

By 2020, it aims to be the leading provider of milk-based beverages in North Europe, as well as one of the leading European companies in Asia, the Middle East and North Africa.

The UK, UAE and Singapore have been chosen as test markets, and the distribution, sales and marketing models established in these countries will be rolled out in the respective regions.  

New sales opportunities in train stations, workplaces and bars

The worldwide market for milk-based drinks is around €100bn ($112bn) in annual retail sales value: the size of the global standard white milk category. However, it is growing much faster, especially in markets outside of Europe, according to Arla.

A sparkling milk and fruit drink; a milk and tea drink; and a protein rich energy drink are part of the plans for the enlarged business.

Hanne Søndergaard, executive vice president for global marketing & innovation, Arla, says that by addressing the beverage market in a strategic manner, it can double the size of its playing field for liquid milk products.

“This will create new sales opportunities for us in places such as convenience stores, petrol and train stations, cafes, gyms, workplaces, bars -  places where we are hardly present today.”

The milk-based beverages unit will focus on developing:

  • Products and packaging: for example the development of ambient milk yogurt or whey beverages; which can be flavored, carbonated or fortified with protein, fibre or grains. Milk, yogurt or whey could also be used as an ingredient in beverages such as sports drinks, water, coffee and tea.
  • Channels and distribution: Extending sales and distribution outside traditional retail.
  • Markets: develop models in the UK, UAE and Singapore to roll out to the wider regions. 

Arla is a dairy company owned by 12,700 farmers in Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands. It already has its Cocio subsidiary and a cooperation with Starbucks ​coffee drinks.

arla infographic
Global beverage sales by category, 2015

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