European dairy cooperative Arla Foods has unveiled a new five-year strategy to cement its commitment to sustainable dairy production.
In the next five years, the group will increase investments in sustainability, digitalisation, new production technologies, and product development by more than 40%, to over €4 billion.
The cooperative is also increasing its dividend to support its farmers on their sustainability journey to over €1 billion.
Arla Foods Future26
Globally, demand for dairy products is growing, and consumers are becoming more conscientious and expect the food they eat to be healthy, affordable, and produced sustainably.
The global dairy market is expected to grow by 2% in each of the next five years.
This will be driven by growing populations in the Middle East, Africa, and the Asia Pacific countries, which will lead to an increased demand for dairy nutrition.
In Europe, where dairy has been a more integral part of daily meals for many years, consumers now search for products that meet their needs within health and wellness, convenience, and sustainable production.
Arla Foods is building on its successful Good Growth 2020 strategy with its new strategy, Future26, where it plans to increase investments across its operations.
The group also introduced a new retainment policy allocating a higher supplementary payment of over €1 billion over the next strategy period to support its farmers on their sustainability journey.
Arla Foods CEO Peder Tuborgh, said, "With our Good Growth 2020 strategy we created the right recipe to grow our brands, deliver efficiencies and invest in sustainable actions across our value chain, while securing a competitive milk price to our farmer owners.
"Standing on this successful platform, our new strategy Future26 will move our cooperative to the next level, grow our global business responsibly to meet the fast-changing eating habits among consumers and their increasing demand for sustainably produced dairy products and improve returns to our farmer owners."
Arla Foods Sustainable Efforts
In the next five years, Arla Foods plans to take industry lead on data-driven sustainable dairy production throughout its value chain and raise its commitments to meet the 1.5-degree goal set by the Paris Agreement.
Over the last decades, Arla’s farmers have steadily worked towards sustainable farming and today they are among the most climate efficient dairy farmers in the world producing milk with an average of 1.15 kg CO2 per kilogram of milk.
Across its operations, Arla has raised its target to a 63% reduction of greenhouse gas emissions by 2030, which it will deliver by accelerating its conversion to green electricity, fossil-free fleets, making all packaging recyclable, and having zero virgin plastics in branded packaging by 2030.