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A milestone for UK organic dairy

Farmer-owned Arla Foods and Yeo Valley announce partnership on liquid milk, butter and cheese
Katie Hill - Editor-in-Chief, My Green Pod
A milestone for UK organic dairy

It’s just been announced that 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 yoghurt, 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.

More consumer choice

Tomas Pietrangeli, managing director of Arla Foods Limited, said the licensing agreement creates the potential for future investment in range, which in turn presents 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’, Tomas explains, ‘driving overall growth for organic across dairy categories.’

‘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. Through the licence to use the Yeo Valley brand, we believe that we can further drive organic penetration of the milk market.’

Managing director, Arla Foods Limited

Converting customers to organic

With one in four households now buying organic products, there is opportunity for the dairy sector to convert more of its customers from standard to organic dairy.

In order to fuel this growth and meet the growing needs of consumers, investment is required in innovation and range under both the Yeo Valley and Arla brands.

Click here to find out why Yeo Valley’s semi-skimmed milk is a Hero

‘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.’

Managing director, Arla Foods Limited

Organic dairy in the UK

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, said that Arla’s farmer-owned credentials are aligned with 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’, Tim said, ‘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 4% 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%), Sweden (16%) and Denmark (29%). ‘This is a great chance for us to catch up with our European neighbours’, said Tim.

The agreement means that Yeo Valley will be well placed to continue its focus on strengthening its core business of yoghurt, 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.

Click here for more on how Yeo Valley and the Mead family are supporting British family farming.

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