Dairy co-op Arla Foods UK has acquired a subsidiary of the Yeo Valley Group in a move designed to expand its organic dairy offer.
The deal will enable the farmer-owned co-op to use the Yeo Valley brand in milk, butter, spreads, and cheese under an intellectual property license with Yeo Valley. The Yeo Valley Group will remain a family-owned business run by the Mead family, and will continue to independently run the Yeo Valley yogurt, ice cream, cream and desserts business.
The largest dairy co-op in the country, Arla Foods UK is a subsidiary of the Swedish-Danish Arla Foods Group.
Commenting on the deal, Tomas Pietrangeli, managing director of Arla Foods Limited, believes the licensing agreement with Yeo Valley will provide a “significant opportunity” to offer a greater organic 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.”
Only 4% of the milk currently sold in the UK is organic, below the ratio of countries such as Germany (10%), Sweden (16%) and Denmark (29%).
“Arla Organic Free Range milk has driven 60% of all the growth within the organic milk category in the last 12 months, with 70% of all Arla Organic Free Range milk sales attributable to customers who would have not previously purchased organic milk,” said Mr Pietrangeli. “Through the licence to use the Yeo Valley brand, we believe that we can further drive organic penetration of the milk market.”
He said the deal was a great chance for the UK to catch up with European neighbours as consumers were looking to make diets healthier.
Tim Mead, organic farmer and custodian of the Yeo Valley family business, added: “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.”
