Arla Foods is investing $2.9 million in its Esbjerg factory to boost production of Starbucks and Cocio milk drinks. The upgrade will include new buildings, equipment, and maintenance, supporting growth in the EMEA region.
Arla Foods, a leading dairy group, is ramping up its investment in the production of milk-based beverages, focusing on its popular Starbucks and Cocio brands. The company is committing DKr20 million ($2.9 million) to enhance its factory in Esbjerg, Denmark. This investment reflects Arla’s strategic push to meet growing demand for these products across Europe, the Middle East, and Africa (EMEA).
Investment Details
- Funding Allocation: Arla Foods is channelling DKr20 million into its Esbjerg facility. The investment will cover a range of improvements, including the construction of new buildings, the acquisition of advanced processing equipment, and necessary maintenance upgrades.
- Purpose: The primary goal of this investment is to accommodate the rising demand for Arla’s milk-based drinks, specifically Starbucks Ready-to-Drink (RTD) coffee products and Cocio Chokolademælk. This expansion is crucial to support the brands’ growth in the EMEA region.
Starbucks and Cocio Brands
- Starbucks RTD Coffee: Arla Foods has held the licence to manufacture and distribute Starbucks RTD coffee products in the EMEA region since 2010. In 2018, Arla and Starbucks extended their partnership with a new 21-year agreement, reinforcing their long-term commitment to this product line.
- Cocio Chokolademælk: Arla initially acquired a 50% stake in Cocio Chokolademælk in 2002 and took full ownership six years later. The brand has been a key part of Arla’s portfolio, offering a range of popular chocolate milk drinks.
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Growth and Performance
- Sales Growth: According to Arla’s 2023 annual report, the company experienced a notable 15.7% increase in sales volumes for Starbucks RTDs over the past year. Revenue from these products rose by 13.7%. This growth underscores the increasing popularity of Arla’s milk-based beverages and the need for expanded production capacity.
Strategic Importance
The investment in Esbjerg aligns with Arla’s broader strategy to strengthen its position in the dairy beverages market. By upgrading its production capabilities, Arla aims to better meet the demands of its growing consumer base while enhancing operational efficiency. This move not only supports the company’s growth ambitions but also reinforces its role as a leading player in the dairy industry.
Arla Foods’ investment in its Esbjerg factory represents a significant step towards supporting the expansion of its Starbucks and Cocio milk drinks. With the allocation of DKr20 million for infrastructure and equipment improvements, Arla is well-positioned to continue its growth trajectory and cater to the increasing demand for its products in the EMEA region. This initiative highlights Arla’s commitment to maintaining its competitive edge in the dairy beverage sector.
