Arla Foods, a Denmark-based dairy cooperative, forecasts a decline in its branded volume-driven revenue growth for 2025 despite strong financial performance in 2024. The company, which owns brands like Lurpak, expects revenue to range between €14.5 billion and €15.3 billion, citing high dairy prices and consumer uncertainty as key challenges.
Arla Foods, a leading dairy cooperative based in Denmark, anticipates a decline in its branded volume-driven revenue growth for 2025 despite achieving robust financial performance in 2024. The company, known for brands like Lurpak and Castello, reported an increase in total revenue and profits last year but expects consumer uncertainty and high dairy prices to impact growth in the coming months.
Revenue and Profit Growth in 2024
In 2024, Arla Foods recorded a rise in revenues, reaching €13.8 billion ($14.39 billion), up from €13.7 billion in the previous year. The cooperative also reported a net profit increase from €380 million in 2023 to €401 million in 2024. However, while overall revenues grew, the company’s strategic branded volume-driven revenue growth stood at 3.7% for the year.
Looking ahead, Arla expects its 2025 revenue to range between €14.5 billion and €15.3 billion, driven by continued high dairy prices. However, the company projects a 1-2% decline in branded volume-driven revenue growth, attributing it to shifting supply and demand dynamics.
Cost Efficiency and Operational Adjustments
Arla aims to achieve cost efficiencies between €90 million and €110 million in 2025, following €131 million in efficiencies in 2024. Addressing concerns about potential job cuts or factory closures, an Arla spokesperson confirmed that there are no such plans, stating that efficiency measures do not necessarily involve workforce reductions.
In July 2024, Arla announced the closure of a UK-based creamery after failing to secure a buyer. However, the company continues to invest in the UK market, raising its 2024 total expenditure in the region to over £300 million ($377.6 million).
Expansion Plans and Global Presence
Beyond Europe, Arla Foods is eyeing global expansion. In October 2024, the company expressed interest in growing its presence in Egypt by making a non-binding offer for a majority stake in Arabian Food Industries (Domty), a key player in Egypt’s dairy and juice sector.
As Arla navigates economic pressures and shifting consumer demand, the company remains focused on maintaining profitability while expanding its footprint in strategic markets.
