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June 20, 2022

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

The dairy group, which makes and markets drinks for Starbucks, says it’s meeting “increased global demand”.

By Dean Best

Arla Foods is planning to up the production capacity at a plant making on-the-go, chilled coffee.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
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The Denmark-based dairy group, which makes and markets drinks for Starbucks, said it is meeting “increased global demand”.

Work at the factory, based in the Danish town of Esbjerg, is expected to be finalised by the end of next year.

“The expansion will increase our capacity by around 20%. We are investing EUR41m (US$43.1m) in the dairy to expand production, packaging lines and cooling areas as the demand has outgrown the dairy’s capacity,” an Arla spokesperson said. Just Drinks has asked Arla to more precisely quantify the rise in capacity.

The spokesperson, without providing further details, said “the ready-to-drink coffee beverage category has grown with an average of 20% every year and with a record growth of almost 34% in 2021”.

Arla struck a production and distribution deal with Starbucks, covering Europe, in 2010. The contract was extended for 21 years in 2018, taking in the wider EMEA region.

When Arla announced its 2021 financial results in February, the co-operative said its Starbucks-branded sales rose almost 34% in volume terms. A year earlier, sales volumes increased 27.3%.

Arla, which owns brands including Castello cheese and Lurpak butter, generated group revenue of EUR11.2bn in 2021, up 5.6% on a year earlier.

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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