Press release -
Farmer-owned Arla Foods and Yeo Valley announce partnership on liquid milk, butter and cheese
Arla Foods Limited will acquire Yeo Valley Dairies Limited, a subsidiary of the Yeo Valley Group Limited. The transaction will give the farmer-owned dairy cooperative the rights to use the Yeo Valley brand in milk, butter, spreads and cheese under an intellectual property licence with Yeo Valley.
The Yeo Valley yogurt, ice cream, cream and desserts business will continue to be run independently through Yeo Valley Group, which remains under the ownership of the Mead family.
Commenting on the deal, Tomas Pietrangeli, Managing Director, Arla Foods Limited said: "The potential for future investment in range through this licensing agreement with Yeo Valley provides a significant opportunity to offer a greater choice to consumers at attractive prices.Our ambition is to encourage customers to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across dairy categories.”
With one in four households now purchasing organic products, there is opportunity for the dairy sector to convert more of its customers from standard to organic dairy. To fuel this growth and meet the growing needs of consumers requires investment in innovation and range and under both the Yeo Valley brand and Arla brand.
Pietrangeli continues: “Arla Organic Free Range milk has driven 60 per cent¹ of all the growth within the organic milk category in the last 12 months, with 70 per cent¹ of all Arla Organic Free Range milk sales attributable to customers who would have not previously purchased organic milk.Through the licence to use the Yeo Valley brand, we believe that we can further drive organic penetration of the milk market.”
The announcement is a milestone in the journey of Yeo Valley and organic dairy in the UK. Tim Mead, organic farmer and custodian of the family business comments: “Arla’s farmer-owned credentials are aligned to the values and ethos that the Yeo Valley brand is based on – “Supporting British Family Farms”.We have a long-held ambition to grow organic dairy in the UK, because at Yeo Valley, we believe that organic dairy is better for the planet, for the cows and for health.”
Currently in the UK, only four per cent2 of milk sold in the UK fresh milk market is organic, which compares with far greater shares of organic in the milk market in Germany (10 per cent3), Sweden (16 per cent3) and Denmark (29 per cent3). “This is a great chance for us to catch up with our European neighbours” said Tim.Pietrangeli continues: “Organic milk has a key role to play as consumers increasingly look for ways to make their diets healthier. Its production without the use of artificial or manufactured herbicides and fertilisers and with high standards of animal welfare are key reasons it is in growth, especially with younger consumers. Arla is working with industry bodies to continue to help consumers understand the additional benefits that come with organic milk."
The agreement means that Yeo Valley will be well placed to continue its focus on strengthening its core business of yogurt, desserts and ice cream whilst remaining independent and family-owned.
Completion of the transaction will take place following merger approval by the UK Competition and Markets Authority.
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Arla Foods is a global dairy company and co-operative owned by 11,200 dairy farmers with circa 2,500 of whom are British.
Dating back to 1881, Arla’s purpose is to secure the highest value for its farmers’ milk, while creating opportunities for their growth. With production facilities in 11 countries and sales offices in a further 30, Arla is the world’s fifth largest dairy company and largest supplier of organic dairy products. Arla has a total of more than 18,000 colleagues and its products are sold under the well-known brands Arla®, Lurpak® and Castello® in more than 100 countries.
Arla Foods UK is the largest dairy company in the country and is home to leading dairy brands Anchor®, Arla Cravendale®, and Arla Lactofree® with a turnover of €2.9 billion. The UK is largest market within the Europe Zone, contributing 35% of the zone’s turnover and also comprises 25% of the Group revenue.
As well as being a leading supplier of fresh milk, number one in butter, spreads and cream, Arla is the UK’s largest cheese manufacturer. It has also built the world’s largest fresh milk facility located at Aylesbury that later this year will become the first net zero carbon site of its kind. The UK business has a team of approximately 3,500 colleagues located at its dairies, creameries, distribution centres and head office.
ABOUT YEO VALLEY
We’ve been farming in the beautiful Yeo Valley since 1961, when the Mead family first bought the farm here in Blagdon. Today we are the largest family-owned dairy business in the UK, with 1200 acres of farmland and 420 award-winning British Friesian cows.
We’re 100% Yeoganic which means we go the extra country mile to look after our land and livestock and we always strive to do the right thing. Supporting British Family Farms is at the heart of everything we do, which includes buying British produce where we can.
We make everything from yogurts, butter and cream to compote, ice-cream and children’s products and we’re the UK’s largest organic brand.
