Arla Foods to invest in on-the-go coffee production

The Danish dairy company that produces and markets beverages for Starbucks stated that it is meeting “increased global demand.”

The factory in the Danish city of Esbjerg is expected to be completed by the end of the following year.

The expansion will increase our capacity by approximately 20%. A spokesperson for Arla stated, “We are investing EUR41m (US$43.1m) in the dairy to expand production, packaging lines, and cooling areas because demand has exceeded the dairy’s capacity.” Just Drinks has asked Arla to quantify the increase in capacity more precisely.

Without providing additional information, the spokesperson stated, “The ready-to-drink coffee beverage category has grown by an average of 20% per year, with a record growth of nearly 34% in 2021.”

In 2010, Arla and Starbucks reached a production and distribution agreement covering Europe. In 2018, the contract was extended for an additional 21 years, encompassing the entire EMEA region.

When Arla released its financial results for 2021 in February, the cooperative reported that volume-based sales of Starbucks-branded products increased by nearly 34%. Compared to the previous year, sales volumes increased by 27.3%.

In 2021, Arla, whose brands include Castello cheese and Lurpak butter, generated group revenue of EUR11.2bn, up 5.6% from the previous year.

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