Arla Foods Ingredients (AFI) is making changes to allow for “a great growth journey” in its ingredients business, which is projected to outstrip capacity at its two Danish sites, Danmark Protein and Arinco.
The farmer-owned dairy co-op has decided to change the strategic role of Arinco in Videbæk, making investments that will transform it into a dedicated ingredients production site.
AFI, a subsidiary of the co-op, is serving the global food industry with ingredients used in early life nutrition, clinical nutrition, sports nutrition and other food and beverage products.
“We see a very bright future for ingredients and a world of opportunities,” said Luis Cubel, group vice president and managing director, Arla Foods Ingredients. “This new strategic direction will accelerate our ambitious growth plans for our ingredients production and enable Arla Foods Ingredients to further strengthen our position as a leading global player in the ingredients market.”
Besides ingredients, Arinco produces milk powder for AFI’s B2B sales of Early Life Nutrition (ELN) and Arla’s branded Early Life Nutrition business.
While it has been decided that the AFI B2B business of ELN will discontinue in about 19 months, Arla will continue to expand the branded ELN business.
New strategic partnership
To further drive ingredients growth, Arla has entered a partnership with French co-op and ELN producer, Sodiaal. Arla and Sodiaal will work closely together to accelerate the China ELN business of the two businesses, and Sodiaal will produce all of Arla’s future needs for ELN products in China and other markets.
Arla says its branded ELN business will benefit from Sodiaal’s strong production capabilities “to continue the current positive momentum”.
Both companies are farmer-owned, it adds, and both have integrated supply chains, with similar production technologies. The new strategic direction will create more capacity at Arinco for Arla’s growing ingredients production.
Related: Arla Foods announces plans to become major UK exporter of mozzarella
But it will also have an impact on approximately 170 job positions at Arinco and AFI’s HQ in Aarhus.
“It goes without saying that this is a difficult situation and a tough day for our employees,” said Cubel. “The changes will not be fully implemented for another 19 months, and until then, we will do everything we can to retrain and find internal job opportunities for those affected. The employees are highly skilled, and it is our clear ambition to retain as many of them as possible in Arla. However, redundancies will be unavoidable.”
During the 19-month transition, Arla said it will work closely with customers to meet their demands before discontinuing the ELN production at Arinco by the end of Q1 2026.
Plant-based butter launch
Elsewhere in the co-op’s family of businesses, Arla Foods has launched a plant-based brand of Lurpak into the UK and Danish markets. The move is part of Arla’s new product investment as it continues its growth strategy.
“As a farmer owned co-operative, dairy is and always will be, at the heart of Arla,” said Peter Giørtz-Carlsen, executive vice president and COO of Arla Foods. “But in order to strengthen the position of our brands and attract new consumers, we have to innovate.
“We believe there is room for both dairy and non-dairy in a healthy, sustainable diet and our new innovation in plant based allows us to offer our shoppers that choice within our brand portfolio. The launch of Lurpak Plant Based gives us the opportunity to bring the quality and taste of Lurpa® to consumers.
“This ultimately ensures we continue driving growth across our portfolio and creating value that goes back to our farmer owners.”
Lurpak Plant Based launches into stores in the UK today (21 August) and in Denmark from 26 August.
