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.